Office Hours: Peak CRNA Locums? Is MD Supervision a Convenience? 1099 vs W2, Hospital Execs Who Shrug

Joe: [00:00:00] You know, the general thinking is when you come out of your training, that's when you're... People say that's when you're the smartest, because you're, you've just taken your test, right? But in my view, that's the most, one of the most dangerous times of your career

All right, everybody, we're back for a very special episode of About the Rest because we've, we've gotten off to a really good start. People are listening. We're getting good feedback. We're getting good data. We're preparing for season two, and let me share my screen because I wanna share some of that feedback.

All right, so a, a USAP executive was listening to the show and, and I, I guess I feel a little bad 'cause we've been, uh, talking about USAP a lot and all the lawsuits that are going on. But last episode, we talked about the CAA problem, uh, debacle with their testing issue, and a USAP executive wrote in, his name's Neil, said, "I was expecting this podcast to use the cheating scandal to punch down on CAAs," and I appreciate that wasn't the case, and you're very welcome, Neil.

It's not [00:01:00] our pro-- I don't think it's anyone's, uh, agenda on here to be punching down on anyone. It is our goal to have really productive discussions from people who are actually credible in the industry. So it was-- Somebody asked me, "Why are you doing this?" And I just said, like, "Look, anybody with a camera or a phone and a camera can talk about anesthesia now, can talk about CRNAs, anesthesiologists, CAs, anything," right?

But not all of them, the vast majority of them, in fact, don't really know how this business works. And I want to learn from people who are smarter or have different experience from me. I don't just want to be subjected to this constant bombardment of people who don't know anything about these things. So I started the show, and I got, you know, made a few phone calls, said, "Hey, would you be willing to do this?"

Even though this is a little bit of exposure, it's a little bit of risk. But our only rule is, you know, number one, if it's public, it's fair game. We don't talk about confidential things. And number two, we want real opinions from real operators. And I think generally speaking, even though there's a lot of, [00:02:00] let's say, controversy or a lot of discussion, to put it lightly, around CAAs as a policy, right?

That's different from them as people, and it's important to be able to differentiate those things. And that's not done very well in our society right now, Neil, and that's really why we got this going. So with that said, let me, uh, get our first question going. So today, uh, a lot of us have, uh, pretty busy schedules outside this show, which we don't get paid for, right?

We actually have day jobs. And so what we wanted to do here is make sure that we're still getting in touch with you, and we want to pull in questions directly from our audience. So I went to a few different social websites and said, "Guys, we're gonna host an office hours episode, and we're gonna answer your questions directly," which is exactly what we're gonna do for the next hour.

And w- obviously, these are gonna be broken up, um, on YouTube and whatnot. You can skip directly to your question or the questions that interest you. Let's start with number one. Grant Morgan: "I've been seeing CRNA listings where the anesthesia team model may [00:03:00] change during call or weekends from ACT to independent.

The pessimist in me says this is simply supervision when convenient." That's probably right, Grant. Are there more layers to the anesthesia care model that change after the nine to five? So let's approach this first in, in a way, if you were a hospital executive or a surgery center asking me this question, this is the answer I would give you, right?

So a couple layers here. First of all, what does your delineation of privileges say? A lot of people say bylaws. Bylaw-- It's very rare that CRNA issues are in the bylaws. It's in the delineation of privileges where the real influence is, right? So that's number one. What can you do, right? Number two, is there some difference, and I'm giving a lot of leeway here, is there some difference between the clinical requirements of the facility, the patient, the surgeons From Monday through Friday, 7 AM to 5 PM versus the weekend, right?

And you hear a little bit of hesitation in my voice, and the truth is, that's probably not the case, right? It's probably not meaningfully different clinical, [00:04:00] um, acuity during the week versus the weekend. In fact, you can probably say the weekend and nights, lots of bad things, unexpected things can happen.

They're obviously not scheduled surgeries, so probably not, right? And then the third part of it is why is this occurring? And this is occurring, I think if-- look, if there's a-- I don't think this would happen if generally speaking, if a CRNA is running this department. This is more of an anesthesiologist CRNA dynamic.

I definitely know this exists. Look, if this is happening, that person is making two bets, in my view. The first is that I can do this as the anesthesiologist. I can do this and get away with it even though it's, it's clinically inconsistent, it's principally inconsistent. No one's gonna check me on it. No one's gonna put this department, this contract, this service line at risk, and I'm gonna do it 'cause I don't wanna work on the weekends, right?

I mean, that's probably what's going on here. I think the second part of it is if you're a CRNA in this environment, look, I-- people feel different ways about this 'cause some people feel like, "Hey, this is a time for me to [00:05:00] exercise my autonomy, right? And use my judgment, and this, I've demonstrated to my colleagues that I'm competent to handle these things."

That's not a bad thing either, right? But it does say, "Hey, why am I being so tightly controlled?" 'Cause that's gonna be the problem. If I'm so tightly controlled Monday through Friday when it's just happens to be convenient and all of the decision-makers are around, and then on the weekend I'm doing the grunt work that when no one wants to be here, that sets up, sets up a pretty negative cultural environment.

And I can tell you in my group that would-- that's not going to happen. Like that's un-- that's, that's... No, that's just not gonna happen, right? Um, at, at least not like this. I mean, there's, there's always a little bit of nuance, but it's like, come on, this is not a good look. So your pessimist voice, Grant, is probably correct.

All right. All right. Let's go to, uh, let's go to the next question here. Uh, this was submitted by Michael Moreau. I may have texted Michael. I know Michael. He's a leader in our group. I may have texted Michael and said, "Hey, uh, send me a, send me a question." I may have made this suggestion. How does one go about [00:06:00] getting a raise in this business?

Thank you for the question, Michael. Look, there's two ways, really, if you're an individual, right? And I spend a lot of time on the individual side. If you're an individual looking to make more money, there's really two ways to do it. Number one, you can just quit and try to find something better. And that comes with risks and rewards.

Now, the risks are you're not really gonna know what you're getting yourself into. And there's lots of data around, hey, if you like what you do, if you like the relationships you have, and you're paid reasonably, you're probably gonna be pretty happy at work. So if you cut off that relationship and you go to the next higher paying shop, there's some relational, uh, damage that you may have to work with.

And also, you're gonna be the new guy, right? And new guys aren't generally treated as well as folks who are senior in the organization, just get a lot of credibility, right? The other way, and this is the way I would recommend, is similarly to go to your leadership, to go to the group leadership and say-- make your case.

Make it so compelling that they cannot deny it, right? And if you wanna go one step further, say, "Here's the case," right? "I know this is financially difficult for the group because of the [00:07:00] contract or XYZ else. How can I make this business, this organization better, stronger? How can we change things on the ground to make this financial case even better?"

And that's the better way to do it, and that's what results in a really strong long-term relationship. And then when things go up and down in this business, as we're gonna get to during this office hours segment, they will go up and down. And when things go down and we're looking to make changes, invariably an organization is gonna be like, "Who are the highest value members of the group?

We wanna make sure those people are taken care of. We wanna adjust to make sure they are happy and protected and all these sorts of things." So that's how you get a raise. Either you quit and go to the next highest paying job, right? And there's people who do that. They switch jobs every two years or so.

That comes with a lot of, you know, you be kinda become known for that guy, right? And people kinda look at you with a little bit of a squinty eye eventually. Uh, or you go to your group now, make the case, and help the organization get to that business case so they can pay everyone as competitively as [00:08:00] possible.

Let's go to the next question. Uh, I did post this on Reddit. So Texas Tomatillo, these names are pretty funny, seventy-nine. Uh, I would love to hear about a practical way to move from W2 to 1099. I know it's difficult to compare. What should you look for in a salary to be sure you're not leaving money on the table?

All right, there's two factors here, and everyone gets the first, everybody misses the second. Okay? So the conversion factor is number one, and the conversion factor is gonna be anywhere from, I'm just gonna give you the range that I've seen put into place, anywhere from sixteen percent to thirty-five percent, right?

That's a pretty dramatic difference when we're talking about CRNA or even anesthesiologist type money Right? So you take what at $1, you multiply it by 16, you multiply by 35. That-- Your range is gonna be somewhere in there. I've seen most come in around the 20, 25% range, and there's a lot of variation with the benefits package and all that sort of thing.

That's what everybody knows about. Everybody on the internet, the Facebook groups, they're gonna say it's 50% or something crazy like that. Uh, I've, I've worked directly with HR, uh, [00:09:00] hospitals that are converting from them to 1099 to W2. I've, I've worked directly with private groups who are making this change, so I'm a little more familiar than, you know, your average internet comment.

The part that people miss, however, is when you are 1099, it, it comes with everything's a trade-off. The downside is you are generally less protected than being W2, right? As a W2 employee, there's certain employee protections that you are generally able to tap into. I say generally because in our country of 50 different regulatory structures, 50 different definitions of employment law that you're generally able to tap into, which can protect you to protect your employment and your ability to provide for yourself and your family.

When you're 1099, much of those things go away, right? It's just, it is a contract. You're there for a specific purpose. Now let me add another little bit of nuance, okay? In the W2 world, there's this concept of right to work, right? And there's [00:10:00] this also this concept of Fire at will. So both of these things play into the W2 world.

Let me talk about the fire at will aspect. So those W2 protections, even though they do exist in those states, when you can be fired at will, when, you know, if the organization doesn't need that W2 employee and they end that relationship, it doesn't have to be for any specific reason. And that's in place in many states, including in my home state of Arizona.

It's been that way for many years. So W2 is not always as protective as you might think. Okay, that's part one, and then let's go to the final part that you should think about when being 1099. And the part that most people miss is generally your money just goes further. Okay? W2, 1099, different risks and rewards.

These are just labels we place on money. But when you're processing your money, according to the federal government, 1099 in this range specifically, it's generally more tax advantaged. If you talk to a C-- We've had CPAs on this show before. They are always very reluctant to quote [00:11:00] a number, but generally ten percent is very conservative.

So for every dollar you earn, you keep ten percent more of that dollar back in your pocket. And there's some work up front. You know, you have to pay an accountant, but generally it is worth it. My s-- my observations are that most people who go 1099 or begin to process their compensation 1099 rather than W2 do not go back to being W2, because once you do the initial grunt work, so to speak, then your dollars become worth more, and over the course of time you're investing more.

You can invest significantly more as a 1099 in your retirement. If you're a saver like I am, that really mattered. I've been 1099 my whole career. So there's a lot there, right? But I think the real takeaway is, number one, you keep more of your money. Number two, there are some trade-offs, right? There's some work involved.

But number three, there is a reason this is trending upward. Uh, the-- our profess- the CRNA professional association has a course on this, right, to walk you through it. There's also private courses you can go through. [00:12:00] I did this on my own. I probably made some mistakes early on. The biggest factor in your success is gonna be understanding the framework, number one, and then getting connected with a good CPA.

All right. Best way to set up your company, this is gonna be a state-by-state issue. Generally, most of us are using a LLC and then processing a W2 through that LLC, right? So your LLC might make three hundred thousand dollars and you might pay yourself a W2 salary of a hundred and fifty or something like that.

Health insurance is a, is... Look, it's a mess for everybody right now, but there's more options than ever on the private side, right? And then malpractice, paying for your own m- own malpractice. By the way I didn't mention one of the major risks of being 1099 is em- employer misclassification. I know of a group, uh, many years ago, it was based out of Ohio at the time, then it moved eventually to Florida.

They actually had a m- employer misclassification issue, had to pay like forty thousand dollars per CRNA, and my understanding would be that the CRNAs also had to pay into the IRS 'cause you're saving on your taxes. If you were supposed to be a W2, you would've been [00:13:00] paying more on taxes. They go back X number of years.

So that's something to consider. And paying for your malpractice is one way you can say, "Hey, I'm an actual independent contractor. I'm paying for some of my own things." Not paying for the laryngoscopes, that would be inappropriate in our industry. But malpractice. So real quick, the, the real takeaway is, look, you can get a cheap claims-made policy.

You can get a more expensive occurrence policy. There's some things to consider with being admitted or the financial strength, but let me focus on the claims-made and occurrence. Effectively, claims-made, you're gonna have to buy a tail in most circumstances and/or rely on someone else to buy that tail. So you're paying less now, but you're gonna pay more later, and then you really need to look into the details of the protections.

The-- big topic, but the number one thing I would recommend is who controls in the case of a lawsuit? Who has to consent in order to settle the lawsuit? So when bad things happen, and they always do, especially when you're looking at things at scale over the course of your career, it's likely [00:14:00] something bad is gonna happen.

Who is the controlling determination? If your employer is paying for that, right? You have to make sure that you are not sharing coverage or that they are not controlling it. It's not that you're against each other, it's just that your interests may not overlap entirely, and at some point, you may have your own interests you need to defend.

I'm gonna leave it there on malpractice. All right. I don't know this name. Ca-Cava8? I'm not sure. Let's see here. "Would love to hear you address the trending cost burden to the healthcare system generally, and anesthesia groups specifically of an ongoing locum work-- of ongoing locum work as a, quote, career track."

All right, so let's break this down into two parts, broadly and individually. So broadly speaking, we're spending an awful... Everyone knows we're spending an awful lot of money in healthcare, and there is a lot of ways that anesthesia can improve the value proposition of our services. Okay? I don't generally tell individuals that they should take it on the nose to save the American healthcare system.

You have your responsibilities, all that sort of [00:15:00] thing. Like, I don't criticize anyone for doing that, right? That's part one. Part two is locum work is inherently On a curve. And we've been on a big curve, right? And anybody who watches e- economics, usually when you're on a big curve upward, there's usually a correction.

Now, there's gonna be a bunch of people in the comments saying, "Oh, this guy is saying it just 'cause he makes a bunch of money," and all this, and, "You guys make money when people get paid less," and all these sorts of things. So let me share with you the actual way this industry works, because there's another curve, right?

There's actually three curves you should be aware of here. Number one, the educational curve, which is very slow, but will respond and is responding. The locums curves itself, which is very fast, right? Because ultimately, when you're a locum, they're trying to get you off the books as soon as possible, right?

That's their number one goal. And number three is the anesthesia management group curve, okay? So when-- With the anesthesia management group curve, that's what nobody is gonna know about, so let me t-touch on there. When locum costs are there, right, they're usually shared between the [00:16:00] hospital and the group.

There's a lot of variance there But the bottom line is when compensation begins to stabilize, it's not like the anesthesia group is suddenly making more money. Not only are there revenue guarantee contracts where there's only a limited amount of margin that you're allowed to take, you're effectively paid for running the service.

The other thing which will begin to occur as the market stabilizes and subsidies are currently high, other groups are going to come in and underbid, right? And that's like a two, three-year window, depending on the length of the contract, uh, sometimes as short as one year or even a ninety-day out. So as the labor market stabilizes, it's not as though suddenly these AMCs are gonna be making all this, at least non-organizations like ours, are gonna be making all this money because eventually some other group, the contract's gonna come up for renewal, or they're gonna have a good manager that's just checking in on things, and they're gonna come in and say, "You know what?

This other group says they can do it for less." That's gonna be less stipend, less management fee, or less in compensation 'cause they're hiring a lot of new [00:17:00] grads and people are willing to work for less to work in this great city. I've seen this happen before. So all this relates to this ongoing career as a locum, right?

And can you make this work as a locum? Yeah, sure. You definitely can. Is it going to last forever? No one knows. And the takeaway for the individual is that if you're spending less than you earn regularly, you're gonna be in a good place, no matter what the ups and downs of this locum market is and/or, uh, the general market, the general industry.

And I'll say one more thing. I do see some of these new grads going out into locum work, and that's fine. I, I mean, I understand the impetus. Sure, make, make money while the-- make, uh, hay while the sun is shining, right? Here's the problem with that. My view is that professionals generally need two to three years of mentorship, and I don't mean CRNAs and anesthesiologists.

I mean all knowledge workers, all knowledge professionals need that seasoning in order to get better at their job, right? I, I think, uh, you know, the general thinking is when you come out of your training, that's when you're-- people say that's when you're the smartest 'cause you're, you've [00:18:00] just taken your test, right?

But in my view, that's the most... one of the most dangerous times of your career because you're still learning what you don't know. You're still accumulating experience. So when you go from new grad to locum work and you're expected to do everything, that, that's kind of the point of being a locum is you do everything.

You fill in the gap. That's not a y- people are not invested in your long-term health there. They're invested in getting you off the schedule. The-- It's conflicting interests. It's not a good look. All right, let's go to the next question here. What's the best way to locate those hidden gem anesthesia practices where CRNAs and anesthesiologists work together harmoniously in a way that allows both to be highly satisfied professionally and financially?

And look, there's a lot of ways to answer this question. Uh, can't pronounce that username. Reddit is a funny place. There's a lot of ways to answer this question. I'll answer it like this. The further away that practices get from ideology, get from, you know, "I need to be in charge because some group told me I need to be in charge that's [00:19:00] based in some faraway city," the more people focus on what's good for the practice, what's good for the patient, what's good for the surgeon, let's work backwards from that, you're gonna find practices like this where the ideology and the politics go down, and the productivity and the collegiality and the communication and the health of the culture all go up, right?

So to locate those, you need to talk to people. I know we're in this hot market, and it's still hot. You know, there's definitely some ups and downs depending on what city you're in, right? But I grew up in a market where you did not hear about jobs. Like, the best jobs were never advertised. You have to go to places and talk to people.

And the upside is we're experiencing an epidemic of loneliness right now, and the best way to cure that loneliness is to get around people and be annoyed by people and suffer through the uncomfortableness of going to a conference with lots and lots of people. But you gotta put yourself out there and meet people.

And when you do, you find these hidden gem practices, and they tend to be very protective of [00:20:00] their practice, very protective of their contract. This is thinking from, you know, 10, 15 years ago now, but that's when I came out, and I would imagine we're already seeing this a little bit. It's like seeing through a mirror dimly faded.

We're seeing it now, and I think we'll see it more in the future as well. So you gotta get out there. You gotta find it, find those non-political practices. They're great places to be. That's where I grew up. All right. What advice would you give to a CRNA at the beginning of their career who wants to build a long, fulfilling, and s- relatively stable life when working in a professional environment known for constant change and volatility?

All right, that's from Kevin Kam. I know Kevin. Kevin, thank you for the question. Let's break this down in two ways, okay? This is an important one Let's break this down in the, the less important way first, which is the professional way. So the professional way to break this down is to go back to-- it's back to the fundamentals.

So you need to spend less than you earn, right? You need to keep your options relatively [00:21:00] open, right? I- if you're isolating yourself in a, you know, ultra niche or ultra small practice early on, you're going to have less options when change comes. Okay? So that's just like basic, that's table stakes advice.

The next phase going from professional to personal, okay, is that you need to ask yourself, "Am I working with good people? Am I working with people that I trust?" Right? Like that I trust to do-- like we have generally the same values. And Kevin, you, you know Ali Pagai. I always use him as an example 'cause Ali and I get along very well on a personal level, right?

We had worked together in m- various ways On advocacy and regulatory reform before we got started, we got this group off the ground that we're, that we're all in. I didn't call Ali, and we didn't get in touch because necessarily we thought we were like these business gurus. I got in touch because I trusted him.

Like, I trusted that he would not lie to me. I trusted that he would tell me the truth on things. And he's a really hard [00:22:00] worker, and he's a great guy and all those things, right? But when we're talk-- So after you get that table stakes done, then it's-- you look around. Ultimately, we are who we surround ourselves with.

And you gotta look around and look at the group leadership and say, "Hey, at a really high level, I don't need to agree with everything, but at a really high level, do I generally agree with the tone and tenor and the direction of this organization?" Because that, at a fundamental level, that is gonna inform every single decision, right?

So personal way, right? The-- or the basic way, I should say, and then the group way, and then the personal way, okay? This is the long, fulfilling, and relatively stable life. And Kevin, I've seen a lot of people with a lot of money who are very unhappy and do not check this box, right? Y- everybody knows that surgeon who's just, like, cranking out fifty, sixty hours a week, and they're, you know, they're not a happy camper, right?

Uh, I think everyone-- That's kind of a, a stereotype of the operating room. And when we think about happiness, when we look at the literature based on happiness, it really comes down [00:23:00] to four things, okay? And if you wanna read more about this, there's a author named Arthur Brooks. He was a, an economist or led a, a, an economic think tank and then did a PhD on social sciences on the science of happiness, so you can read more from Arthur Brooks.

But it's really four things. And the four things are, number one, you know, friends and family, right? Especially the family you choose. If you're building into those relationships, depositing into those relationships, it's a really good thing. So friends, family, faith, some sort of sense of the transcendent.

I'm certainly not, uh, advocating for any specific faith, but some sort of sense of the transcendent, something that you're, you're part of something bigger than yourself. Okay? Those are three. And then the fourth one is meaningful work And what makes work meaningful? And what make works meaningful is I think two things.

It's number one, going a little full circle, it's the people that you're working with. Do you enjoy those relationships? Do you care about one another? Do they care about you, right? Do they [00:24:00] want to see your general advancement in life? And if you feel that, it's a powerful human experience, right? And then the other part of meaningful work is what are we actually doing?

Like, what's the impact we're having at a, a individual, at a patient level? You know, every CRNA, every anesthesiologist should feel that on some level. But then it's like, well, but what are we doing at a bigger level too? Like, how are we improving things? Are we leaving things better than we found them? And if you have those four things, right, friends and family, meaningful work, and some sort of sense of the transcendent, that is what is going to help you live a long, fulfilling, and relatively stable life.

'Cause that will stabilize you internally, and then all this volatility, it'll be fine. It'll be fine, right? You just ride the waves, right? Spend less than you earn, have that sense of inner stability, okay? And go from there. And that's been-- look, and I, I'm-- the reason I took so much time on this question is because I'm a-- I love, I love working.

Working's a lot of fun. I'm a, I'm a, I'm a driven, energetic person. I like to leave things better [00:25:00] than I found them. I like to see how far we can go, right? Same reason I, I used to love weightlifting quite a bit more than I do now, right? I just wanted to see how far I could push myself, and it's a wonderful thing to pursue excellence like that.

But then on the other side of my mind, on the other side of my brain, I realized, you know what? I've got my friends and family. I've got meaningful work. I have more than what I need. Everything is great. No matter what happens over here, everything is great. And to, to be able to carry those two disparate thoughts in your mind at the same time, that is a powerful thing.

And Kevin, that's why I wanted to answer that question. I've thought about that a lot. Great, great question. So there's the practical side, right? But there's also the, the spiritual and the mental side of it as well, and both of them are much more related than people think Would love to hear about your dealings with hospital administration.

Give us a discussion about the different types from toxic to empowering. Okay, so one time we had a contract and, uh, the data was off in the contract, [00:26:00] like by twenty percent. The volume was off by twenty percent, and this was before revenue guarantees became market norm. And, uh, so I remember going back to the executive and I said, 'Hey, man, like we, we gotta talk like we're, we're way off here.

Like we are in big trouble.' Um, and I was pretty new in my role on the business side. I was still figuring things out and like I was just like kinda like sh-shrugging my... I, I was like, 'I don't know what to do here. Like you, you... Something's way off. Like we're covering all these sites of service, but we're not getting a lot of cases.'

And he kinda shrugged and said, 'You signed the contract, man That was it. He-- That was his advice. You sign the contract. Basically, he was like, "Figure it out." Now, to me, that says two things, okay? Uh, number one, you know, one of my rules is, uh, uh, something I picked up from somewhere else, which is just don't take anything personally.

So I imagine that individual was just extremely overwhelmed and not in a position to help. I don't think he was trying to avoid helping. I just don't think he was in the right position to be able to help. So [00:27:00] that's probably one of the most negative experiences I've had, and I try to give people the benefit of the doubt and not-- You know, I take these situations seriously, but I don't take them personally.

I've definitely run into a lot of administrators, some who are very negative on CRNAs or they're ideological about it. Um, you know, not everyone knows I'm a CRNA right away, and I've, I've heard them in, in our business interactions, uh, and I've heard them say negative things about CRNAs, so that's always a little funny when they find out I am a CRNA and I have that certification.

I think on the other side of things, on the empowering side, um, and I, I, I don't name names when I'm s- talking negatively, but I do like to name names when I'm talking positively. And during COVID, uh, we were at Banner University in Phoenix, big hospital. We have, uh, nine sites there, so a substantial footprint.

It's a good-- really good relationship. And, uh, the most-- one of the most effective executives I've ever worked with, her name is Jaylene Cassano. And the reason, not only is she just the ultimate professional, and she's efficient [00:28:00] and, uh, just, just just awesome to work with, right? And I, I'm a pretty, you know, jovial, dynamic, you know, passionate person.

All these words can apply. But Jaylene, she's, you know, she's your quintessential hospital executive. She wastes no time, and I really appreciate that 'cause, you know, there can only be so much of this personality in the room, and you gotta get down to business. So she's a very effective communicator, but I think what made her most effective was the fact that she understood my point of view as well, if not better than I did at that time.

She's a highly experienced executive, right? She knows-- She knew-- She anticipated everything I was going to say. Uh, and that was a really cool experience, and we came up with a really good solution, and that's the best type of negotiation, right? Where, hey, you're leading a hospital. I have, uh, I'm leading an anesthesia group Let's combine those relative strengths and make something good.

Let's be creative. It's not me versus you, it's you and me versus this problem. And that [00:29:00] was, to use your word, no definition 3882, that was empowering. That was a really good thing that built trust, that built rapport. And ultimately, and this is where, you know, the investments come back, right? Ultimately, what that meant was when Jalene reaches out, you know, we are going to be very motivated to solve her problem because we know she has our back and we want to have her back as well.

I did not ask her permission to, uh, share this story, but since it's so positive, I, I think she'd be okay with it. And, uh, so it, it ranges the gamut, my friend. It ranges the gamut. It's as wide as people are wide. That's how you see the different, uh, experience with leadership. I will tell you, assume they know nothing about anesthesia.

Generally speaking, um, they do not know, and you're educating them as you're describing the business case as well. All right. How hard is it to correct bad behaviors of employees, especially when they are CRNAs and you are pro-CRNA? Tips on how you, you approach it, how many strikes would give? This is from Mike Tran.

Mike, thank you for the [00:30:00] question. Uh, you know, this is a really interesting question for me specifically 'cause the first portion of my career was so focused on regulatory reform for CRNAs, right? CRNA advocacy. I, I wanna-- I'm on the side of CRNAs. So when I got into quote management, I had to start leading a surgery center or leading in any way, shape, or form, it was very uncomfortable for me because these...

my natural predisposition is one of, you know, I want to be out there leading the vanguard, making like the-- that's how my brain is wired, right? I wanna make those changes. I wanna have that debate. I'm very comfortable with those things, okay? Management, however, leadership, organizational leadership is a different set of skills, and I had to do two things, okay?

The first thing that I had to do was really improve my communication skills, and there's a big difference between speaking well and communication skills. And one of the most powerful communication skills I've developed over the years is realizing number one's humans assume negative attent-- negative intent, [00:31:00] right?

That's how we're wired. It's survival instinct. They think something bad about you. They think you're doing something about to hurt them, all that sort of thing. So one of the first techniques I have is to say, "Hey, Mike, I'm not here to, to try and criticize you. I am h- tr- here to try and make sure we're all performing at a high level, to make sure patients are getting what they need.

And I wanna make sure that you know I have your back in this situation." Often, when you're a clinical manager, you weren't there on the clinical side of things, right? You don't really know what happened. So you do have to approach it with a genuine, genuine openness like, "I don't know what happened. I've got your back.

I'm here to support you. I'm not trying to attack you," which is how they will feel. "I am trying to make sure that things are going well on our team, so help me understand what happened." That's part one, right? Part two is, you know, especially dealing with clinical judgment decisions, right? Patient selection is often the big one.

I generally approach it as, "Hey, you made a call. I don't necessarily agree or disagree. I just wanna understand." Okay, that's number [00:32:00] one. Number two is, you know, we have a quality committee in our organization made of anesthesiologists and CRNAs. They come up with standards, recommendations, all that sort of thing.

So when there's a difference between what's happening on the ground and those guidelines which are broadly agreed upon across many different scenarios, many different opinions, the question, it's not, "Hey, you did the wrong thing." It's, "Hey, here's our guideline. Here's, uh, where your head is at. Help us understand the difference," right?

And then one of two things will happen The first thing that'll happen, they'll be like, they'll be like, "Oh, I didn't, I didn't know that it was okay that we could-- like it was generally acceptable to proceed in that way, or I should have declined," one or the other. But the key is they didn't know. And then they see their peers making that decision and they're like, "Okay, I have support, so if something goes awry in this case, it's reasonable that I make the decision that I make, so now I'm gonna change my local decision."

So we give them that, that support and we help them see the difference. The other thing which can occur is they say, "Yeah, I'm fully on board with that guideline. However, here are the other factors in [00:33:00] that case, and this is why I had to make the decision." And then we can go back to the facility and say, "Hey, I know surgeon X, Y, and Z was really upset about this canceled case, but look, we've, we've taken a look, we've scrutinized this case, and this was the right call."

And then we can effectively back that person up and it makes it much easier to do that, right? So that said, you know, it's one thing to advocate for, and a lot of people in th-this industry, they confuse the regulatory side of things and the clinical side of things. You can advocate for things on a regulatory basis, right?

We can say, "Hey, everybody should be using all their skills, talents, and abilities and the government should not be infringing upon that." That's my version, all right? Um, but on the other hand we can say, "Look, we're gonna maintain high degrees of quality at the local level. We're gonna make sure there's oversight, appropriate oversight," and that has to do with whether it's an all MD group or an all CRNA group, it doesn't matter, right?

You want oversight, you want s-a certain amount of appropriate professional scrutiny so when something does happen we can say, "Look, no, we're, we're doing our [00:34:00] job. We're making sure everybody is doing their job, making sure people are meeting those standards." So that's how I take it, right? And basically say, "Hey, here's the standard.

Help us understand how we can get there." That's a general good approach and just assume that people are thinking negatively at first and they're gonna be defensive, and if you can defuse that early on it goes a lot better. I'm not a, I'm not a strikes person. Uh, it really depends on the, the degree of the problem you're dealing with, whether it's an error or the, the degree of the complication, you're gonna have to use judgment on how to get there.

All right, Cody Burke, at what point does an independent anesthesia group become the exact thing it used to complain about? And I'll tell you, Cody, it's when that organization, those people lose sight of the reason they started the group in the first place. And I'll tell you, it cannot be money. Everyone wants to make money.

There's nothing wrong with making money. Everyone gets really uncomfortable when we're talking about money . Okay? What I am telling you is that organizations need a [00:35:00] reason to exist beyond making money. It's an organizational imperative. And when you hold onto that over the long term, that is when you do not become the thing you used to complain about.

The thing that many people don't understand is that organizations need to evolve and change. It is no different than an individual who wants-- Look, human beings have this wonderful thing where we strive. We g- we continually improve ourselves. Organizations are no different, right? There's no being stagnant.

There's either getting worse or getting better. There's either seemingly staying still while the market is changing around you, and the way the American system is set up, someone is coming to take your lunch. It's just a matter of time, right? You can hide in the background, but someone is looking, right?

Whether it's private equity or a private group or an individual, someone is looking. So you always have to be changing and improving So when people say things like, "Hey, you guys aren't the group that you used to be," and I've heard that, right? "You guys aren't the group you used to be," right? I hear it in personal [00:36:00] relationships and well, and people say, "Hey, my husband or my wife isn't the same person that I married."

And I say, "What did you expect? Do you really think the person 20 years later is gonna be the same person that you married 20 years ago?" I certainly hope not, right? We need to be growing and changing. The point is, if you do it in the right way, if you're creating pathways for people to grow, if you're expanding the positive impact of the organization and doing it in a financially viable way, that's the winning, right?

That's what independent anesthesia groups should be evolving into, right? So when I hear, at what point does an independent anesthesia group become the thing it used to complain about, right? That usually means, in my experience, they don't have an organizational imperative, right? They don't have a bigger mission other than just a transactional thing of money, right?

And the truth is, our group, we probably focused too much on the organizational imperative in the early years, and we weren't [00:37:00] very good at the business side of things. And I was pretty- I'm speaking only for myself now, not speaking for anyone else. But I think we thought that if we held that organizational imperative deep, deep within us, that everything else would align.

And it kinda did, and then it didn't. And you know, we almost bit the dust in 2021. We had a very difficult time during COVID, and we had to make a lot of changes. And I realized you need both, right? You need to evolve and grow and, you know, have an operating margin because dark times will come. It's only a matter of time, right?

But you also need to maintain that mission, so when people are complaining about change, it's like, no, we, we are changing. We have to change, right? And go from there. So Cody, a general question, but I hope that provides some insight for you, Cody. All right, Israel Coronado. Looks like Antonio Banderas' big brother.

Yeah, I tell him all the time. Handsome guy. Uh, discussion topic: every CRNA needs to understand how important it is to have CRNAs in [00:38:00] charge of anesthesia contracts. Control equals leverage for our profession at large. So Israel, what I would say is twofold, okay? Number one, you are correct. Whoever controls that contract, whether it's private equity or unions or hospital employment or it doesn't matter, right?

Who's ever leading the department has control and influence. That's number one. That goes back to that earlier question about are you generally aligned, right? With the folks running your department, your team. But number two is how important it is to have CRNAs in charge of anesthesia contracts. And I would add on, it's important to have people who are ethical and who are values aligned.

And I say this for a specific reason, because when I got out as a CRNA, my contract, the contract I was part of was not, it was not owned in any way, shape, it was really just run by one guy. Um, it, his name's, uh, I don't know if I should say it on the air. His name starts with an R, and anybody in Phoenix, uh, would know who I'm talking about It was really just one guy, and it didn't matter if you were an anesthesiologist or a CRNA, that the fact that he ruled with an iron fist, right?

So the way [00:39:00] he ran that, and that was great clinically, but the organization was not so good. And the way he ran that had little to do with him being an MD or a CRNA. In fact, my earliest clinical mentor, uh, was a guy named David Vertulo. I'm actually having breakfu- breakfast with him in two hours, and he was an MD, and he was outstanding, right?

So I wanna leave room in this conversation to say it's in my view, right, it's important to have MDs and CRNAs in leadership at these places. I'm not saying it, you know, especially in larger departments, because leadership is not profession-specific, right? There are examples of hospitals or even medical departments being led by nurse practitioners or something like that.

I'm not trying to have a political discussion here. I am trying to say leadership is not profession-specific. So absolutely, it is important for CRNAs to be involved, absolutely on the business side, obviously, right? I mean, look at where I'm at. But I do wanna, again, leave room in this conversation for the idea that leadership is not [00:40:00] profession-specific, and I'd rather work with CRNAs and, and/or MDs who have good character, who have values that say everyone should be using all their skills, talents, and abilities to benefit the patient than work with a CRNA just because.

Because I think that makes the mistake, right, that the, uh, I'm gonna criticize them for just a moment, the, the ASA makes and basically says, "Hey, one profession, and that's the way we should do things all across the country." I just don't think that's, that's realistic, right? I think it's kind of crazy. I think these l- these model decisions should be local, always local decisions for clinical anesthesia models.

So I, I totally pick up what you're laying down here. I just wanted to add that bit of nuance as well. All right. RFP. Uh, Logan, man, Logan asked me a bunch of questions. Well, I think Logan's ambitious. I can tell. Walk us through an RFP through signing a contract, uh, with a new facility. All right, Logan, so I'm gonna start with number one.

There are no rules. I thought there were rules, you know, to over-- And we're in our 13th year [00:41:00] now. I thought there were rules with all this. I was wrong. Um, so it happens many, many ways. Where does a hospital put out an RFP for anesthesia coverage? A press release, a tweet. You're showing your age there, Logan.

Uh, just companies they know or a third-party service? Uh, yes, all of those All of those. The, it can happen any which way. It can happen whisper down the alley. It can happen through a formal, uh, you know, public press release. It can happen very quietly. There may never be an RFP, right? So in Phoenix, some of the most recent contract changes for large hospitals, no one had an RFP.

There was just a, "Hey, I know this guy's gonna do a good job for me. Um, I want you to put a bid in, and if it's reasonably competitive," you can, you can farm out the competitive aspect to a fair market value company like VMG or something like that. They can do the comparison and say, "Yeah, that's a reasonable number," and you can just proceed without ever having an RFP.

So, um, there are no rules here, Logan, all right? All right. Do they make payer mix, coverage needs, staffing models, case types, and other [00:42:00] needs public data, or do you have to apply for this, quote, confidential data to even submit the proposal? It's gonna depend on what the organization needs to know, right?

And there's gonna be overlap, like 80/20, right? There's gonna be an 80% overlap with what every company asks. It's the 20% that makes the difference, right? Pareto's principle, okay? Uh, Italian economist Vilfredo Pareto. Okay, you can look it up, but it, it is always at the edges that makes the difference. That's the difference between winning and losing, and it is very small Very small.

Okay? So yes, you're gonna want an NDA in place, right? That's very normal, and there's gonna be a, a data exchange, and then you're gonna build your proposal if it's that type of RFP. Again, sometimes it can go really fast. Uh, sometimes it can just be like, "Hey, can you guys be here in three months? Let it-- Let me know what you need.

Here's a contract." What other kind of information is needed to make a good proposal? Does the hospital board... Y- Uh, often the board will approve a contract, but usually they're not involved in this sort of thing. Uh, usually expect its outsourced anesthesia group to consult on strategy, attend board of [00:43:00] director meetings.

So let me answer both of these. What other type of information is needed to make a good proposal? Look, I break this down, the really, the, the, the down and dirty, right? It's everybody talks about payer mix and volume, right? That's the numerator. That's revenue, right? You really need to understand the denominator, however.

You need to understand the service level requirements. Who's gonna be providing that service? What's reasonable? What's a good market rate for them to be paid where they feel like they're being treated well? What are the conditions that are gonna-- What are the skills that are going to be needed? You need to flesh out that denominator.

So payer mix and volume, right? And then you need to think about, let's just use the word time for that denominator and everything that goes into that professional service time, and there's a lot of detail that lives there, right? That is why I, I often describe the anesthesia market in a segment of three, right?

You have your mom and pop shops, you got your regional players, and you got your strategics, your big, your big, big shops. Each of them comes with a different value proposition. [00:44:00] Smaller groups come... are high touch, very relational, right? Very responsive, but generally not as capable organizationally, right?

They don't have the revenue generation ability, the negotiation ability, the capital ability. They need a lot of financial support. At the other end, your USAPs, North Stars, NAPAs, Essentials, et cetera, they're big, and they do big pro-- Like, they tend to do big projects quite well, right? Like, you, you know, you have a 40, 50-site hospital, in my view, that's where their value proposition is very high, higher than the other two.

And then you have your regional players, which depending on the details, ex-extract or pull in advantages of both. They can be pretty relational, right? They can... A lot of long-term private relationships. I, I think of Eric Callan out in Tennessee. He's been running that company a long time. He's a known guy.

He-- There's a lot of credibility that goes into that. They're not changing CEOs every three or four years. Right? But they don't necessarily-- and this is not a, a conversation about anyone specific, but they don't generally have the capability of those larger multi-state groups. There's different [00:45:00] value propositions there.

So that's how those, that market breaks up. As far as, you know, consulting on strategy or attending director meetings, no, not really. That's not generally a role. You certainly wanna be engaged however you can to make the, the hospital, the surgery center successful. You're generally not required to be there.

All right, next question. This is all from Logan. This is why I know Logan's ambitious. How would one group present a better offer than the other? Just staffing models and billing efficiency. I love this question. I love this question because there's so much on the internet that says it's just this. It's just-- Like, I remember getting the company off the ground and somebody was like, "Oh, it's just a glorified lemonade stand."

Right? You just gotta make more money than you spend, right? And that's true. That's kinda prima fascia logic. It's, it's true at first glance. Again, 80/20, man. There's so much more detail. There's a reason this industry exists. There's a reason these big organizations are punching at one another for market share.

And yes, it is just staffing models and, and billing efficiency. But when you apply human knowledge and expertise, and you keep going deeper into those things and trying to extract [00:46:00] advantage, do it more efficiently, lower your overhead by two, three more percent, the difference between winning offer and a losing offer is very, very small All right, Logan.

"I really think it would be hard to offer truly differentiated services and proposals." Uh, no, it, it's not hard to offer a truly differentiated service and proposal, and that's for two reasons, okay? Uh, we'll get to this with some of the, uh, financial, uh, aspects later in this Office Hours episode. But there's probably two aspects you really need to think about here.

The first is refers to the aforementioned 80/20 rule, right? The difference is in the 20%. It's in the small things. That's where the differentiation comes from. All anesthesia groups at some level manage anesthesia. Yeah, that's true. That's prima facie logic. But when you get deeper and deeper into the business itself, you realize there's all these little nuances that which can make a big difference, you know, an- a few difference of a few inches here, extrapolated out over the course of a contract or an organization can be a [00:47:00] massive difference over the course of time, and that's where you get those truly differentiated services.

That's number one. Number two is the cultural aspect. Humans-- Look, emotions are biological signals, right? And we tend to... Sometimes we overestimate their value, and sometimes we underestimate their value, but they have them. And when you're making that proposal, the culture tends to leak through, right? Like, people generally show you who you are, who they are.

Character tends to reveal itself over time. And if you have a disposition that says, "Hey, we're the experts, and you're really lucky to have us. And we know that you don't have a lot of options, and that's why we feel like you should pay this price," that's a very different feeling from, "You know what? We know you're in a tough position.

We understand the problem that you're facing. It feels very, you know, powerful and stressful to you right now, but we've done this many times. Here's the specific case examples that we can show you that where we have the expertise to [00:48:00] solve your problem in this new area, in this way, in a way that aligns us as much as possible for the long term financially, uh, where if I'm doing well, you're also doing well, our group members are doing well, the surgeons are doing well That takes an awful lot of effort, and that comes through in the leadership of the organization, which again goes back to earlier in the conversation at a high level, are you aligned with that type of leadership?

Right? And I will tell you there are vast differences in the way those conversations get approached. We've picked up a lot of business over the years just because the other groups are pounding on the table. So I'll leave it there. All right, everyone, so we did something new today, this Office Hours episode.

There were a lot of questions, and we wanted to give you the appropriate depth for these answers and connect all these seemingly crazy concepts and give you something practical. So it took longer, so we're gonna break this up into two. However, if you have questions about this first episode, there are many ways to reach out to us.

You hear me at the end of every show. You can email us at social@abouttherest.com. You can message us on all the socials. Those do get [00:49:00] monitored, and we often incorporate your feedback directly into the show. Uh, you can visit our website abouttherest.com. I'm on the socials as well, not too, too much 'cause, you know, we're doing the podcast, we're working in real life, but feel free to message me.

And of course, the Human Content Podcast family, if you're interested in human content and starting your own, is @humancontentpods. They're a great company to work with. So thank you to everyone who's been supporting the show. We're on all the socials, like I said. We are also on YouTube, which apparently is a place that a lot of people listen to these things, I have learned.

I am your host, Joe Rodriguez. I'm one of the producers as well. The other executive producers are Aaron Korney, Rob Goldman, and Shahnti Brooke. Our editor and engineer is Andrew Sims, and our music is by Omer Ben-Zvi. To learn more about all of our policies, the program disclaimer and ethics policy, the verification and licensing, the HIPAA release, you can go to our website, and you can reach out to us in a more official way at production@abouttherest.com.

About The Rest is a Human content production. Have a great week, everyone. Thank [00:50:00] you.

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