NorthStar Anesthesia, a Texas-based staffing company, has recruited eight to 10 anesthesiologists formerly under contract with Anesthesiology Associates of Ann Arbor to serve Southfield-based Beaumont Health’s hospitals in Dearborn, Taylor, Trenton and Wayne, officials said.
Last Thursday, NorthStar took over A4’s contract after a yearlong dispute led to a contract termination Aug. 20. Still, the transition to NorthStar went smoothly at the hospitals, Beaumont said in a statement to Crain’s.
“We had highly qualified anesthesia providers in place and there was no disruption in patient care,” Beaumont said.
Over the next four months, Beaumont said, it plans to phase in NorthStar for its three hospitals in Royal Oak, Troy and Grosse Pointe, with an effective contract start date of Jan. 1. No decision has been made on Beaumont Hospital Farmington Hills, the former Botsford Hospital, the statement said.
“We are listening closely to our anesthesia providers and integrating their feedback into the transition planning,” Beaumont said. “We remain confident that the transition in the north will go smoothly as has been demonstrated in the south through our collaborative efforts between providers, Beaumont and NorthStar.”
Greg Bock, A4’s president, said the anesthesiology company is contesting in Washtenaw County Circuit Court that NorthStar illegally interfered with its physician contract. He also said A4 is suing eight to 10 anesthesiologists who violated A4’s noncompete contract provisions.
A4 provided about 28 anesthesiologists for Beaumont’s hospitals in Dearborn, Taylor, Trenton and Wayne, Bock said.
“We lost eight doctors to NorthStar and retained 20. They stayed with A4 because they want to continue to provide high-quality care in our group,” Bock said. “They are going to Trinity (Health hospitals) and other contracts we have in Southeast Michigan.”
In a statement, NorthStar said it has has enough anesthesiologists, currently about 20 full-time equivalent, to service Beaumont’s hospitals in the south part of metro Detroit.
Bock said noncompete provisions are standard practice in employment agreements, but that most staffing companies bring their own doctors and nurses. He said A4 has never bid on a contract where it knows it doesn’t have the doctors to service it.
“You are misrepresenting your contract if you bid with the plan being to take all the doctors from the group that holds the contract,” Bock said. “To assume you can service the contract with doctors from the other group is foolish because the company who no longer has the contract has other uses for those doctors. They have jobs and would be redeployed.”
In an Aug. 4 affidavit in Washtenaw County Circuit Court, NorthStar CEO Adam Spiegel said typically staffing companies buy out the employment contracts from companies that lose a contract renewal. He said NorthStar offered to purchase the employment contracts from A4, but was turned down. Instead, Spiegel said A4’s parent company, Siromed, wanted NorthStar to acquire A4 outright.
“Siromed’s offer (on June 4) was not workable, particularly in the short time frame we had, with NorthStar’s contract with Beaumont starting in late August,” Spiegel said. “It would be impossible, especially in the midst of the current public health crisis, to conduct diligence for and complete a major acquisition in the weeks before NorthStar’s contract with Beaumont began.”
Bock said he was unaware of any negotiations or offers to sell A4.
As part of the contract, Beaumont also outsourced 40-50 formerly health system-employed certified registered nurse anesthetists to NorthStar, a move Beaumont said was done to improve efficiencies.
Two Beaumont CRNAs, who asked for confidentiality, said their employment contracts offer them less pay and lower benefit value than when they worked for Beaumont and compared with competing hospital systems.
One of the CRNAs told Crain’s that NorthStar’s attorney said in contract negotiations that the northern Beaumont hospitals also would be receiving the same contract terms as Beaumont’s southern hospitals and DMC hospitals so there would be no inequities.
“While NorthStar made some negotiations, they refused to negotiate our wages,” the CRNA said. “Northstar stalled negotiations until last week and didn’t present the contract until Aug. 19 to push us into a corner and make us fear for jobs. Therefore, everyone signed.”
Beaumont has also signed a contract with NorthStar to provide anesthesia and pain services at the health system’s hospitals in Royal Oak, Troy and Grosse Pointe beginning Jan. 1. NorthStar said it expects to hire up to 70 anesthesiologists to staff Beaumont’s three northern hospitals by the end of this year.
For its northern hospitals, Beaumont contracts with Mednax, a Sunrise, Fla.-based company. In May, Mednax’s American Anesthesiology division was acquired by North American Partners in Anesthesia, a Melville, N.Y.-based company that manages 500 health care facilities in 20 states.
A4, which employs about 100 anesthesiologists, also provides services to six Trinity Health hospitals in Michigan; an outpatient surgery center affiliated with St. Luke’s Hospital in Maumee, Ohio; Garden City Hospital; Forest Health Medical Center in Ypsilanti; and several surgery and pain centers.
NorthStar operates in 17 states and contracts with more than 120 hospitals, according to its website. In Michigan, NorthStar contracts with Spectrum Gerber Hospital in Fremont and has been contracting with the DMC after NorthStar acquired longtime DMC partner Anesthesia Staffing Consultants PC in Bingham Farms.
DMC is owned by for-profit Dallas-based Tenet Healthcare Corp.