Jun 9, 2022
Editor's Note: Vituity is a large Contract Management Group (CMG) that provides staffing for emergency departments including emergency physicians, physician assistants, and nurse practitioners. It is unique among many of the large staffing groups in that it is not owned by private equity, provides transparency in what is billed and paid in a physician's name. There is a path to partnership, albeit long. There is (a form) of democracy, though it is representative. But it is still a "big" group that must play the game to keep contracts at hospitals, which means a loss of local control, and may be subject to the "Curse of Bigness". Is Vituity just another exploitative CMG, commoditizing physicians for profit? It it just the least of all evils? Or does it deserve accolades for bucking private equity ownership and being the pinnacle of democracy? Discuss in the comments.
"John Basilone MD, FAAEM" - Emergency Physician
I am writing this at the request of several physicians.
I was working in a single facility democratic group that was taken over by Vituity, known at that time as CEP. The CEO of the hospital had been hired 2 years previously, and was charged with turning the hospital around financially. We had a great contract with the hospital, and we were one of the low hanging fruit that was knocked off the branch. Other departments/services were eliminated. The CEO had come from a hospital where he had CEP as the ER group, and the director there was a friend of his. He had his friend come in with a CEP crew which did a deep dive on our practice (data analysis on exactly what they could do with the finances), and they gave the CEO a deal which saved him a lot of money. The CEO was happy with all of our medical care-- there was no demand that anyone be fired, but rather they wanted us to all stay-- they just didn't want to pay us.
Facts about Vituity:
1. While they bill it as everyone is a pit doc, this is not true. In the past, it was required that everyone of the physicians work a certain number of shifts in the ER. This rule, however, has been changed. Anyone on the executive team now is not required to work these shifts, so the qualifier of us all “working together in the pit” doesn’t exist anymore. Incidentally, the preponderance of the senior leadership comes from the Bay Area, while the Board of Directors is more diverse.
2. Sign on bonuses are up to $150,000. For this, you have to stay 5 years. Leave early, and it’s prorated. However, if you’ve spent the money— you still owe it to them, and they will get it. They are, at this time, signing on residents who still have a year and a half before graduation. The temptation to spend the signing bonus can be overwhelming, living on a residents salary and facing a heavy debt load, driving an old car. Spending the money— makes it very tough to back out.
3. Year end bonus— this is lucrative, once you get to be a full partner (48 months). Basically, profit at the end of the year is split up based on how much you have earned over the course of the year. If you are a full partner, made $300,000 this year, and the bonus is 20% (bonuses go up and down, and 20% is a good bonus), you get $60,000 at the end of the year, usually deposited on 12/24— Merry Christmas!! Now the bitter news— There is a multiplier which is basically on a logarithmic scale for the first 4 years of the partnership. The first year— the multiplier is .03. So, same numbers, but you’re a first year partner. Take the $60,000 and multiply by .03— and you get a bonus of $1800. Year end bonuses for full partners and senior partners are supported by two phenomena— a steady recruitment of new sites which have either all or predominantly new partners, and having a steady turnover of partners so that there are always a lot of 1-3 year partners in the mix. It’s not until you get to year 4 that the multiple is about .5, and then you hit the gravy train after you have been there 48 months.
4. The ED director at your site is selected by Vituity, and is not elected/chosen by your group. The ED director has absolute control over the schedule. He/she can, at their discretion, take you off the schedule— effectively eliminating your income stream. And— there is no “due process” when they do this. This does not affect your partnership, and can be appealed to the chain of command. Personally, I know of this occurring several times, and the appeals have never been successful. There is no due process. If you live in a remote area, you’re hosed. Other decisions which are commonly made as a group, such as hiring decisions for new partners/ALPs, are now strictly the purview of the ED director. Your work life— changes dramatically with unilateral decisions which had no input from the partners at the site.
5. Vituity will take you off the schedule at the behest of administration. They will do whatever they perceive as necessary to save/enhance a contract. Vituity does not have your back. I have seen them, in order to save a contract, take money from one ER group and give it to another ER group in the same hospital system— supporting the second contract when the hospital system said they weren’t going to support the second group anymore. All of this done— without consulting the group that they were taking the money from. They just took it. Reflect on this— they took your money and gave it to someone else!
6. Labeled as a democratic group, it’s not really. The partners elect the board of directors (BOD), and the board selects the operations officers— CEO, CFO, COO, etc. In reality, there’s not much turnover, and the bulk of the votes are in California. The BOD makes decisions which affect all of the partnership without any input from the partnership. Examples? Expanding lines of care to include hospitalists, critical care, anesthesia, etc. The hospitalist line of business originally had them as employees, and according to leadership, everything was running smoothly, without any problems. And then— they were partners. In some systems, the ER groups support the hospitalist group in terms of finances. The name Vituity? Developed by a PR firm, voted on by the BOD, and then announced to the partnership. THAT got a lot of kickback.
7. Unlike the big CMGs, the leadership of Vituity is paid well, but not great. They are, overall, true believers in Vituity. They are nice group of people. I’ve sat down, broke bread and drank beer with a number of them, with long discussions ongoing. That being said— they are not your friends, they do not have your back, and they will sacrifice you for the greater good of Vituity. This is not the Marine Corps, with the motto “Until they are home, no man left behind.” They will leave you behind if it is in the best interest of Vituity.
8. After being a partner for 1 year, you have to sign up for their health care plan. Even if you are covered by another plan from your partner, etc— you have to sign up. This is a self insured plan administered by Blue Cross. The rates are determined by the total costs of everyone plus administrative costs, divided by the number of members. So, you, as a younger person, are paying for the extensive health care costs of the older partners. Thus, another cost borne by the younger members, in addition to the year-end bonus differential. This insurance is expensive, because there are really no controls on it. Your shoulder still hurting after that fall on the ski slopes 2 weeks ago? Standard insurance would cover x-rays and the office visit, and then off to PT for weeks. An MRI? Standard insurance dictates you go to PT and you will ultimately get your MRI. Vituity insurance? MRI that day. No wait. So, it’s expensive because the controls present in most other plans— aren’t present here. And, there is no reason for any member to decrease their costs to the system, for once you hit the deductible— it’s FREE!.
9. Vituity uses the “fire brigade” to help staff new sites when they don’t have enough physicians to fill the slots. These people are pulled in to work your site. Some are good, some are near the bottom of the barrel. They are “temps” until you are fully staffed. Sometimes, this takes a long time in difficult to recruit to sites.
10. Vituity regards all physicians as being “equal”. Thus, you are all paid the same on an hourly basis. Site distributions (splitting up extra money your site has on the books) can be split up by a number of mechanisms, to include basing it on productivity. Ultimately, the Board of Directors signs off on any payment arrangement. So, when I’m seeing over 2.5 patients/hr and one of my partners is seeing less than 1 patient/hr, they’re taking a half hour lunch break while I’m hungry and getting killed— we all get the same pay. Interestingly enough—when I brought this up to the COO when we were getting taken over, he said, that in his experience, “everything tends to equal out over time—everyone seems to head to a middle zone”. To me, this is just sad. It means that those who are your high performers/achievers— either leave or give up all hope and meld into the morass.
So, why did I stay? Some of my best friends left. My kids were all enrolled in local schools and thriving, my wife and I were deeply involved with the local community, and we had just built the house— that my wife and I wanted to grow old and die in. We moved to this community— to be our last move. This was planned on being my last job before retirement, and I loved the people I worked with. My patients? These were my people, and I took great satisfaction out of taking care of them. It’s great walking into a room and having your patients greet you by your name, smiling to see you. Is Vituity a horrible place to work? No. However, one should understand exactly what they are walking into, and don’t just drink the Kool-Aid (all new partners are required to attend new partner orientation in their first year, affectionately referred to as “drinking the Kool-Aid”). .
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