A contract stalemate between Tennessee's largest health insurer and anesthesiologists in Nashville could start causing headaches for patients at the end of the month. The standoff reveals the local effects of physician consolidation.
BlueCross BlueShield is a behemoth in Tennessee with 3.5 million patients. And Steve Santi, CEO of Anesthesia Medical Group, says his company is getting big-footed.
"You hate to use the word 'bully,' but it almost feels that way," Santi says.
But AMG has become a giant itself. It's quietly grown into one of the largest groups of anesthesiologists and nurse anesthetists in the country, with more than 500 staffers in Nashville. It's the core of an umbrella company, Nashville-based PhyMed, which is owned by a Canadian pension fund.
A 2017 study in the journal Health Affairs showed that physician consolidation tends to drive up health care costs. And BlueCross says AMG has become an outlier, which is why it's demanding a 15 percent rate cut, according to AMG.
BlueCross is not confirming details of its proposal, but spokesman Roy Vaughn says forcing reductions is how insurers keep the cost for patients in check.
"The cost of coverage is directly affected by the cost of care," Vaughn says. "The two are absolutely inseparable."
Both companies (AMG and BCBST) have detailed their arguments online. A deal could be worked out before the deadline at the end of August. But local hospitals are already working on contingency plans, according to Birddog, a journalism website.
Because AMG employs so many local anesthesiologists, that may mean flying in contract anesthesiologists from out of town.