Eric Rey Amador, MD, on Running an Anesthesia Group and its Unique Culture
Eric Rey Amador, MD, joined the Anesthesia Medical Group of Santa Barbara in 2004 and was elected as the Business Manager in 2014, a position he has held for the past four years. He is the CEO of the corporation; although, he views it more as a family business where every partner has a say.
That is what initially drew him to join the group – the egalitarian set up where there is equal compensation, vacation access, and the same voting rights from day one as any other member of the group.
Dr. Amador says this system was created nearly 25 years ago and hasn’t broken with tradition since. The 29-member group runs on an honor system and remains this way by ensuring that every new hire agrees with this culture; although, he notes it is quite the balancing act.
While we are seeing anesthesia group practices merging with other groups or selling to corporate buyers at an unprecedented pace; Dr. Amador is more concerned with the regulatory environment that would make it hard to negotiate insurance contracts and payments.
This interview, which was condensed and edited for clarity, was conducted by CSA President Sam Wald, MD, MBA, FASA.
How is the Business Manager position different than being Chair?
The Chair of the anesthesia department at Cottage Hospital handles the clinical aspects of our practice. As the Business Manager, I oversee the outpatient centers and plastic surgery offices by negotiating those facilities contracts as well as our main contract with Cottage Hospital. I also handle our corporation’s HR, legal, and manage our billing office. One of the prerequisites to become the Business Manager is that you must have been Chair at some point.
What is the structure of the group and did you set it up as the Business Manager?
This structure was set up about 25 years ago. We have a five-person board that includes me, our Chair, Vice Chair, and two at-large physicians that can be anyone as long as you have been in the group for more than a year. You must be voted onto our board and everyone has a two-year slot, except for the Business Manager which is three years.
As Business Manager, I make the daily decisions within a certain parameter. If I think it is above my threshold, then I take it to the board. The board meets once a month and the meetings are open to all partners. If a decision is made by the board that partners don’t agree with, then it can be called for a group vote. If the majority of the group overturns the board’s decision, then that is what we go with.
Is this a unique structure for the group or do you think it is a common structure among similar groups?
It’s a common structure among groups of our size or smaller. We are just big enough with 29 people to run this way. We are a horizontal set up in that everybody has an equal vote and although we have a board and a Business Manager, I am still constrained by the will of the group (a positive). Larger anesthesia groups with more than 35 to 40 people are more likely to be set up as a traditional corporation where there exists a strong board that makes decisions and everyone else has significantly fewer voting rights. That is more of a traditional American corporate structure, whereas we run ours like a family business. We like the egalitarian concept and we all know each other well enough that we can conduct business this way.
Have you made any changes in the last 5 years as the result of the things you have learned?
It used to be set up where the prior Business Manager would stay on the board for as long as their term, which is about 12 years. It gave many people in the group a sense of an oligarchy – an idea that senior partners run everything and have control over the group. I changed our bylaws, which takes a two-thirds vote, that allows the former Business Manager to only stay on for two years. You get the corporate memory but by the same token, you don’t get two people on the board for potentially 12 years or more.
Did this cause any conflict in the group?
Not really. Mainly because our group has gone through a transformation in the last six years. We had a significant number of partners from the baby-boomer era that resulted in turnover due to retirement. Almost half of the group retired in the last eight years, so about half of the group is within five to six years of completing residency. There was a strong youth-movement push for people to have a say and open an additional board spot to people who have been with the group for more than one year.
Since you had a lot of new grads, how did you onboard and sustain a good working environment for them?
I set up a mentorship program in our group where I pair every new partner with a senior partner who is involved in leadership. At the end of the new partner’s first year, they are required to take on a role in the corporation. For example, we started a Wellness Initiative last year and now one of our new grads is going to take it on. We also strongly encourage the new partners to come to the monthly business meetings. I like to tell them that they are not an employee here; you’re an owner so you want to know how your company is being run and what is going on. We try and make the transition as seamless as possible in becoming both a clinical attending anesthesiologist and small business owner.
How do you give people time for this? Do they do it outside the OR on their own, or do you incentivize them?
We incentivize them. We have what is called the “blue unit,” where we compensate our group for doing the work outside of direct patient care that is important to making an anesthesia group run. For instance, when I attend the Credentials Committee meeting for two hours, I will charge the group on a little blue card that I turn in every month for two hours of time. I get five blue units per hour doing that. It’s not as efficient as clinical time, but it’s still important.
How do you decide the criteria to qualify for a blue unit?
That falls to me as the Business Manager.
It sounds like you have a good honor system set up in your group.
Yes, we do. If anything, people tend to underestimate their time.
How did this culture of upholding the honor system come to be in your group?
It’s tradition, it’s our culture, and we have made every effort we possibly can to hire to that culture. When I bring someone in for an interview, I make it very clear to them of how we pride ourselves on how fair we are to each other. We’re equal votes, equal partners, and it’s about being a team. Our goal is not necessarily to maximize the dollar – our goal is to have a good business that takes great care of patients. We have a good track record of people we hired that agree with this system.
It sounds like you have a leadership philosophy. Where did that come from?
It started with my parents. They always taught me about fairness and to treat people how you want to be treated. I also had good mentors within the group and inherited this system that I think is really special.
Do you have concerns about your group and being absorbed into another group?
Being absorbed into another group is always a possibility. I am more fearful of the regulatory and political climate that creates a situation where it is difficult for anesthesia groups to negotiate insurance contracts and payments. That will put significant pressure on a group our size to join with a larger group that has more clout.
How are you strategizing now to meet those future scenarios?
The first part is meeting with our local state Assembly and Senate representatives to explain how certain bills in the legislature can be detrimental to the function of our practice, such as AB 72 and single-payer healthcare. The second part is positioning ourselves as well as we can within our facilities to provide more than just anesthesia services. We do initiatives to improve patient outcomes and help the hospitals with the benchmarks they are trying to meet. By aligning ourselves with them, we create a situation where if payments from patients go down, there are places with bigger pockets that would be able to continue to support us and our endeavors.
Is medical staff committee involvement important to your group in having a voice in the hospital?
Yes, this was something that I really pushed for. I can’t think of a significant hospital committee we don’t have representation on. It creates a situation where when things come up, I hear about them well in advance, so I can start to strategize and get the data that I need to make an informed decision.
What advice do you have for someone new to the Business Manager role?
If you don’t have a lot of business experience, I would highly recommend the Certificate of Business Administration course that I took through the ASA and attending their practice management meetings yearly. It is also good to remember that even the people who disagree with you, might actually be right and recognize that they have value in their voice. You want everyone to be invested and be able to listen to other viewpoints.