KK: Was this negotiation in 2016 different?
Explore This IssueACEP Now: Vol 36 – No 02 – February 2017
JW: We had dealt with similar administrations for multiple years. Some members of the new team have been here for one to three years. The negotiations didn’t get started, unfortunately, until mid to late November. We saw the first contract on Nov. 26. It was about an 80-page contract. The biggest issue was that it was never about quality, timeliness of service, or meeting any metrics. We do fantastic on the metrics. The residency does very well on the medical education side. When we won the RFP three years ago, we picked up three new emergency departments within Summa. All three are underperforming either financially and/or by volume.
Two weeks before we took over the Wadsworth contract, the hospital decided to get rid of inpatient beds; it took out 36 percent of the volume within that ER. The groups that were in there before us had asked for stipends or assistance. We did those contracts for three years and lost between $8 million and $9 million. It cost us more to staff them, bill them, and malpractice them than we were receiving in revenue. There was nothing to cut from our end. We offset the losses with other departments that we run.
Five senior residents this year wanted to stay with the group. All five had to sign with competitors because I could not offer them the type of package needed for them to pay back the $350,000 in medical student loans.
KK: So the math is simple. You can’t compensate people and pay your bills if they’re more than you can bring in in revenue.
JW: Correct. I’ve been head of our group for 15 years, and even before I was president of the group, we never had any financial assistance from the hospital, but those in residency roles got graduate medical education money. In our counterproposal to Summa, we didn’t even ask for financial assistance. We said, “Can we get out of two of these three ERs? Can we close them? Can we make them urgent cares?”
KK: Was there anything extraordinary beyond meeting your losses with the stipend you were looking for?
JW: No. Initially, we didn’t even want a stipend, but when it was discussed, it was actually significantly less than what we were losing. Basically, our group, doctors, and corporation were giving [Summa] a stipend the last three years, and my doctors were taking less.