Memphis, Tenn.-based Methodist Le Bonheur Healthcare and its longtime anesthesia provider, Medical Anesthesia Group, have ended their partnership after contract negotiations hit an impasse.
Medical Anesthesia Group, or MAG, and Methodist Le Bonheur had been working together for 50 years. On Feb. 8, their contract ended and the health system is now working with Somnia Anesthesia, Tabrina Davis, vice president of marketing, communications and web strategy for Methodist, said in a statement sent to Becker's.
According to the health system, the longtime partnership ended "because [MAG] could no longer meet their contractual obligation to provide anesthesia services to our patients," which had previously led to the rescheduling of some elective surgeries. Last summer, the anesthesia provider lost 14 of their 31 staff members and alerted Methodist that they were unable to provide full coverage for the system, Ms. Davis said in the statement. The health system said it then employed contract anesthesiologists at its own expense, despite MAG being "contractually obligated to do so."
"We strive every day to provide the best possible care for our patients and we take that responsibility very seriously," Ms. Davis said. "When a provider can no longer fulfill their obligation, we must find other options. The decision to move forward with a new partner is one we take very seriously and always with the wellbeing of our patients at the forefront."
Methodist Le Bonheur asserts that it attempted to salvage the relationship by offering a "friendly PC model," where MAG could focus exclusively on clinical care and anesthesiologists would be paid "at fair market value," while another party would handle business operations. The health system said the group rejected that plan.
In the months leading up to the decision to terminate the contract, MAG said it made clear to the health system that providers would exit the group without certain contract updates.
"Many meetings, emails, and calls between MLH and MAG took place going back to March 2023 to address outdated contracts, increasing labor costs, operating room inefficiencies, and decreasing provider satisfaction," the anesthesiology group said in a statement to local news outlets. "MAG communicated that without updates to the current contracts, many providers would leave the group. What followed was months of growing provider dissatisfaction and turnover, and ultimately an impasse between MLH and MAG on the best path forward."
The contract with Somnia became effective Feb. 9.
Methodist Le Bonheur operates six hospitals and two ambulatory surgery centers.