I graduated from my ER residency in 2006.  During the 3-year program, we were told countless times that contract management groups (CMGs) were the Devil.  It was drilled into our heads that small independent democratic groups were the only way to go.  Being the headstrong person I am, I went to work full-time for a CMG directly upon graduation.  Including time spent moonlighting, I worked for CMGs for a total of 4 years before starting my own small independent democratic group with a few partners.  After seeing both sides, were the attendings in my residency program right?  Are CMGs the Devil, and if so, how can any self-respecting doctor work for them?  

Brief History of CMGs

     Contract Management Groups are businesses that act as a middle man between hospitals and doctors.  CMGs are an alternative to hospitals hiring doctors directly or several doctors coming together to form a small group or collective.  CMGs were created in the 1970s for Emergency Room staffing and have grown over the decades to incorporate multiple medical specialties, including Hospitalists, Trauma Surgery, General Surgery, Anesthesiology, OB/GYN, and more.  More recently, these entities became big enough (and profitable enough) to attract Wall Street, and many CMGs have become publicly traded companies or have sold to private equity firms with the ultimate goal of going public.  Today, the two largest players in the space, Envision Healthcare, and TeamHealth, employ 1/3 of all Emergency Room physicians.   

Why Demonize CMGs?

     Contract Management Groups, especially those owned by private equity firms, are designed to make as much money as possible as quickly as possible.  Private equity’s playbook is to buy a company with debt, increase its profitability by any means necessary, and sell at a higher price in about 5 years.  The only ways to increase profits are to increase revenue and decrease expenses, and, unfortunately, since the business they are conducting is medicine, these mechanisms have significant real-world consequences for both doctors and patients.  Revenue is increased by growth, seeing more patients per provider, inflated billing, and aggressive collection tactics.  Expenses are cut by decreasing staffing, paying doctors less, and shifting patient care to lower-cost APPs.  

     Additionally, CMGs have pushed contracts and practices throughout the country that minimize job security for physicians and allow the CMGs to fire anyone at any time for any reason.  These contracts have led to physicians losing their voice and being unwilling or unable to speak out against patient safety issues, ethical concerns, or contract violations.  This corporate practice of medicine interferes with the ethical practice of medicine and erodes public trust in the medical system and its practitioners.  For a deeper dive into the history, machinations, and current state of CMGs, read “Contract Management Groups: Get to Know Your Private Equity Owned Overlords.”

Are Small Democratic Groups Better?

     Small independent democratic groups have traditionally been considered the ideal as they promise to treat physicians more fairly than CMGs.  It’s all there in the name.  First, they’re small, so you expect a more personal relationship with other group members.  Next, they’re independent, so you should be less influenced by profit-motive directives coming from corporate management.  Finally, they’re democratic, so physicians should have their say in what happens within the group.  This is the allure of the now elusive small democratic group.  Sounds great . . . if you can find one.  While there is no good data, it is estimated that only 20 or fewer small independent groups are left in the entire state of Texas. 

     I want to offer a word of caution before we place all small groups on a pedestal.  Small groups are businesses, too, so remember their purpose is also to make money.  To a lesser degree, they will use some of the same tactics that CMGs use.  Additionally, doctors are not immune to the infighting and petty grievances common with small group dynamics.  The hope is that since the group’s management are still front-line, local physicians, some of the more serious concerns are mitigated.  

What is an ER Doctor to do?

     Given the questionable practices of CMGs, many EM doctors have philosophical and ethical issues working for them.  Unfortunately, many don’t have a choice.  Despite the struggles that CMGs are experiencing, they still dominate the employment market in emergency medicine with a 50% market share of EM physician employment.  In addition, more than 10% of EM residents are now in programs controlled by these for-profit entities.  So, what can you do if you find yourself working for an ethically dubious employer?  Here is my advice on how to survive the heat when you’re working for the Devil.  

Five Rules of Working for a CMG

  1. Know Thine Enemy 
  2. Understand The Game You Are Playing
  3. Don’t Get Too Comfortable 
  4. Maintain Your Ethics
  5. Become Financially Independent

 Know Thine Enemy

“The greatest trick the Devil ever pulled was convincing the world he didn’t exist” – The Usual Suspects (1995)

      You will almost certainly be surrounded by good people when you work for a CMG.  The nurses, doctors, and APPs in the trenches beside you will have your back and become your friends.  Your Medical Director may have every good intention, wanting to make your ER better.  Your scheduler will work hard to get you the days off you need.  You will all try your best to help patients and each other like in any other ER, but make no mistake, the Devil still exists.    

     Most of your colleagues will be too busy with their lives to notice or think too deeply about the pernicious things that happen around you.  The documentation suggestions.  The meetings asking you to consider alternative diagnoses or treatment plans.  Shifts you are asked to fill when a colleague is suddenly taken off the schedule after a complaint from a local Cardiologist.  

     While the individuals around you are good people, the organization they work for is not.  “They” work for the Devil, whose goal is to make money for shareholders by any legal means necessary.  While smiling and buying you sushi at a recruiting dinner, they are writing up a contract with an overly restrictive non-compete that allows them to terminate your employment without cause or due process.  While smiling and inquiring about your kids, they are balance-billing out-of-network patients in your name.  While smiling and rolling out the new patient-centered campaign, they send families with and without insurance to collections.  While smiling and telling you what a good job you are doing, they will fire your colleague for speaking out about something unsafe in the ER.  Keep your eye wide open to see what is happening behind the thin veneer of “patient first” corporate medicine.  

Understand The Game You Are Playing      

“This sh*t is chess, it ain’t checkers.” – Training Day (2001)

     Much like dating, you need to accept what CMGs are and don’t expect them to be something they aren’t.  You cannot change or fight them and will burn yourself out trying.  Instead, understand their game and play it better.  The rules of their game are simple.  They do not care about you.  You are a commodity.  Do not expect loyalty.  Their instinct is always to protect the contract.  Money comes first, patient care comes second.  Once you understand the rules of their game, you can choose to play it on your terms.  

     If they don’t care about you, don’t care about them.  Care deeply about your colleagues and patients, but don’t conflate them with the CMG.  Trade a shift with a colleague if he needs it off, but only work an extra shift for the CMG with additional compensation.  If you are a commodity, understand supply and demand.  When I worked for EmCare, I made friends with the scheduler and kept abreast of the general staffing numbers.  I liked to work a lot, so I would work as many shifts as possible when adequately staffed.  When we were understaffed, I would sign up for the minimum required by my contract.  Inevitably, I would get a call requesting me to work additional shifts, which I was always happy to do as long as they paid me extra: supply and demand.  

     Do not expect loyalty from a CMG, or you will be sorely disappointed.  Contracts are structured so that you can be fired anytime for any reason.  Loyalty is a two-way street.  If you do not receive loyalty from a CMG, you don’t owe any, either.  Always keep your options and your eyes open.  Continually look for ways to improve your situation and take advantage of theirs.  Get credentialed at other institutions, so you always have a backup plan.  Keep in touch with recruiters to know what other jobs are available.  Get paid on a $/hr basis?  Work more in the summer when volumes are down and work the minimum in the winter when it is busy.  Get paid RVUs?  Do the opposite.  Become involved with the hospital administration rather than the CMGs.  This is how my partners and I got our first contract.  Our hospital administration grew tired of EmCare but liked a few of us and was willing to buy out the non-compete clauses in our contracts.  Play the long game.    

Don’t Get Too Comfortable

“Do not let yourself get attached to anything that you are not willing to walk out on in 30 seconds flat if you feel the heat around the corner.” – Heat (1995)

     Imagine this scenario.  You have moved to a medium-sized town to work in the ER at a level 2 trauma center.  You buy a big house 10 minutes from the hospital and put your kids in a private school.  You work hard at your job for a CMG, taking great care of patients and making friends at the hospital.  One day, you have a disagreement with a local Nephrologist who has worked in the community for 25 years.  You feel you are simply advocating for your patient, but unfortunately, the discussion becomes a bit heated.  What you don’t know is that this Nephrologist arranged for 5 million dollars in donations for the hospital’s new dialysis center a few years back and regularly plays golf with the CEO.  The following day, the ER Medical Director is called in to meet with the CEO, who informs him that he would prefer that you not work at his hospital anymore.  Since the CMG must protect the contract at all costs, the easiest thing to do is take you off the schedule.  You aren’t being fired, and you aren’t losing your privileges.  You simply are not going to receive shifts at that particular hospital anymore.  But don’t worry, the CMG has another hospital you can work at 40 miles away in another town.

     The first instinct of the CMG is to protect the contract, and the easiest way to do that is to make problems disappear.  Say something that the hospital administration doesn’t agree with.  Gone.  Push too hard about a patient or staff safety issue.  Gone.  Have a bad patient outcome.  Gone.  It doesn’t matter whether you reside in an at-will employment state; they have ways to get rid of you.  Since most ER doctors are Independent Contractors with employer-slanted contracts, it often isn’t that difficult.  There are also other, more subtle ways of getting rid of you.  Perhaps you are encouraged to resign before a finding is taken to the state medical board.  Maybe you are simply taken off the schedule and moved to a different hospital.  Whatever the situation, protecting the contract comes first. 

     I have personally seen this play out several times.  There was the doc “taken off the schedule” because he prescribed a weight-loss drug to a NP once, who then proceeded to forge further prescriptions using the doctor’s name.  When the NP was caught, the hospital thought it was a bad look that the doctor’s name was involved.  Gone.  Another doctor cursed a little too loudly beside a room containing a hospital board member’s family.  Gone.  I have more but don’t just take my word for it.  Perhaps you have heard of Dr. Ming Lin, the ER physician “removed from the schedule” by TeamHealth in March 2020 after 17 years of working at the same hospital.  His crime was that he complained publicly about unaddressed safety issues relating to the Covid-19 pandemic.  The situation made national news, but the hospital never reviewed Dr. Ming’s case since he never lost his privileges, nor did TeamHealth, who offered to move him to another hospital anywhere else in the country.  Gone.  

     Unless there are many ER options in your town or within easy driving distance, don’t buy the big doctor house that will be hard to sell.  Don’t get too attached to your colleagues, your neighborhood, or your kid’s school, or you may wake up to find yourself commuting to a new job or working locums in another state.  If you are a neurosurgeon or a dermatologist with your own practice, you can put down roots with confidence.  Similarly, if you are a partner in an ER group with your own contract, you may have some semblance of job security.  But if you work for a CMG, don’t get too comfortable.

Maintain Your Ethics

“You’ve got to stand for something, or you’ll fall for anything.” – Aaron Tippin (1991)

     This one is the most straightforward rule to understand but the most complex in the real world.  While it is easy to say with conviction that you would never do anything morally or ethically objectionable, the path to hell is paved with good intentions.  It is unlikely you will ever be directly asked to do something untoward, but subtlety, misdirection, and deception are well-known tricks of the Devil.  It may start with documentation suggestions, followed later by hints that your $/chart numbers are not meeting the “standard,” culminating in education on what constitutes critical care.  The next thing you know, you are pushing yourself to bill more critical care time, while unbeknownst to you, their standard is above the national average.  This is but one example of how a well-intentioned, competitive physician might be languidly led down a path that ends in a moral grey zone.    

      More importantly, through the implied threat of being fired, CMGs leave many physicians without a voice.  In rural areas, where most of the ER jobs in the country exist, getting fired could mean you are 100 miles from the next ER, and there is no guarantee the same CMG won’t staff them.   Even in a city the size of Austin, Texas, USACS staffs the entire metro area; try finding another job within 50 miles of your home.  This certainly disincentivizes the EM physician from speaking out against errors, safety issues, or injustice.  While I don’t begrudge anyone working to pay off student loans, private school tuition, or make a mortgage payment, the saying “the only thing necessary for evil to triumph in the world is for good men to do nothing” is especially significant for physicians.  It is overly simplistic to simply tell you to stand by your ethics when the entire medical system is set up in a way that punishes you for doing so.  The only remedy is for you to gain your independence from the system itself.    

Become Financially Independent 

“If liberty means anything at all, it means the right to tell people what they do not want to hear.” –    George Orwell (1945)

     One definition of Financial Independence (FI) is the ability to work where you want, when you want, and for whom you want, including the option to not work at all.  One of the missions of Business is the Best Medicine is to promote FI to all physicians.  I firmly believe that Physicians Owe it to Their Patients to be FI, yet I neither encourage nor discourage early retirement for physicians.  I continue to work clinical shifts long after reaching financial independence.  However, I strongly encourage every physician to be educated enough to recognize the subtle influence of the CMGs and financially independent enough to supplant their overt power.  

     Financial Independence can not protect you from being fired, but it lessens the burden that financial pressure puts upon you.  If you are FI, losing your job doesn’t cease to sting; it loses the poisonous effects on your life.  You are not free if your financial position leaves you dependent on a CMG.  This may sound cynical, but don’t put yourself in a situation where a company that views you as a replaceable cog in its money-making machine can disrupt your entire life.  If you keep your expenses low, spend less than you earn, have an emergency fund, and can live off your investments, your employer has no dominion over you.     

free

     More importantly, financial independence allows physicians to fight for what they believe is right.  Nothing is more insidiously dangerous than doctors losing their ability to speak out.  If advocacy is your thing, fight for your patients, stand by your colleagues should they be unfairly fired, oppose the corporate practice of medicine, and support tort reform in your state.  Organize physicians in your area to fight back against reimbursement cuts by the government or blatantly unfair actions by insurance companies.  If service is more your style, take a job for less money, work in an underserved area, or volunteer your time as you feel appropriate.  These actions are possible only when you have no fear of retaliation or retribution.  Being financially independent gives you that freedom.  

Conclusion 

     There is a fair debate on whether capitalism and medicine make good bedfellows, but corporate medicine is a reality with which we must contend.  You may have no choice but to work for a CMG, but you can still have the career you envisioned if you follow these simple rules.  Know who you’re really working for, understand the game you’re playing, don’t allow yourself to become complacent, and maintain your ethics by not being financially dependent.   

     So, are CMG’s really the Devil?  Nah, they’re trying to make money, which is the purpose of any business.  Unfortunately, the goal of returning profits to shareholders is fundamentally out of alignment with our patient’s best interests.  Perhaps then they are a devil, but not the Devil.  

     I hope you understand CMGs better now and if you must work for one, you can do so without losing your soul.  As the saying goes, the devil you know is better than the one you don’t.  Besides, everyone in the business of medicine already knows that Blue Cross Blue Shield is actually the Devil.