Because anesthesia groups are often relatively independent, autonomous bodies that interact little with the administration of a hospital, they can find themselves in difficult situations when hospitals merge or surgeons act out. Here Maria K. Todd, MHA, PhD, CEO of the Mercury Healthcare Advisory Group, a wholly-owned subsidiary of The Mercury Healthcare Companies, discusses three difficult situations for anesthesia groups and how groups should prepare and respond.
Situation #1: Hospitals merge and each has a different arrangement with anesthesia for call coverage. When hospitals merge, and each hospital has a different contract with anesthesia for call coverage, including different deliverables, incentives and payment terms, often anesthesia groups lose out. Hospitals will generally go with the contract that contributes to the financial health of the merged institution — that is, the deal that pays anesthesia less. To prepare for a potential merger, Dr. Todd says anesthesia groups should include language in their contract to keep the best contract for the anesthesiologists in the case of a merger or acquisition.
Dr. Todd says anesthesia groups often fail to include language on mergers and acquisitions in a contract because often attorneys are hired on behalf of the hospital to look out for the best interests of the hospital when drawing up the agreement. Anesthesiologists should "count on changes in the playing field," she says, and not depend on a contract that has been around for years to sustain itself in the event of a merger or acquisition.
Situation #2: Surgeons unhappy with the hospital decide to leave. Anesthesiologists can face a major problem if surgeons are unhappy with hospital administration or processes and leave the hospital. With no cases coming in, anesthesiologists may be left to "sip coffee and look at each other," Dr. Todd says. She says the inherent autonomous nature of anesthesia groups contributes to this problem when strategic group planning is neglected in favor of individual practice. "[Anesthesiologists] generally work alone, trading off shifts and covering several hospitals," she says. "They don't work collectively, and they really do need to have corporate planning and strategy sessions."
She says while anesthesia groups tend to meet as a collective once or twice a year, that number should really be a lot higher. "Monthly should be the bare minimum to sit down and compare notes," she says. "One anesthesiologist should be able to say, 'I'm over here at ACME General and I heard this from a surgeon.' That way, they can do a 'what if' analysis and create a strategy based on several alternate outcomes."
She says anesthesia groups can gain leverage with hospitals by writing out a strategy of objectives and measurable revenue goals, as well as a subjective list of things the group wants out of the relationship with the hospital. "These would be things like respect, advanced notice and adequate cross coverage," she says. "The little things are all part of the deal." The group has to work together on these goals because "a one-off anesthesiologist is never going to have the leverage a group has," she says.
In addition, the group should have fall-back plans and strategies that let the hospital know that the providers have other options. Involvement with other hospitals sends a message that the group is not beholden to the hospital, so even if surgeons leave or the merger goes sour, the anesthesia providers can take their services elsewhere.
Situation #3: Surgeons are regularly late or absent, and anesthesiologists are participating in bundled payments. If surgeons are regularly late to the OR and the providers are receiving a bundled payment for an episode of care, anesthesiologists may be forced to work longer hours for less money. Dr. Todd says this problem can be averted by creating a report card system for the surgeons that based the cost of anesthesia on a sliding scale. Because anesthesia starts before surgery and ends after surgery, if surgery is considered by surgeons to take 120 minutes, a hospital has to ballpark 180-210 for the entire process, including anesthesia, she says. If a surgeon makes the surgery significantly longer, the anesthesia group may have to charge more for their time and then fight for a higher percentage of the bundled payment, which would remain the same despite the delay.
She said the problem was solved by creating a report card that documented tardiness and slowness and determined which surgeons were responsible for delays. Once those surgeons were identified, they could either fix their behavior or be left out in favor of higher-performance surgeons. If the surgeon refused to fix the behavior, the surgeons would have to contribute some of their compensation to pay for the extra time spent on anesthesia.
Contact Maria K. Todd, MHA, PhD, at 800.727.4160 or mtodd@mercury-healthcare.
Situation #1: Hospitals merge and each has a different arrangement with anesthesia for call coverage. When hospitals merge, and each hospital has a different contract with anesthesia for call coverage, including different deliverables, incentives and payment terms, often anesthesia groups lose out. Hospitals will generally go with the contract that contributes to the financial health of the merged institution — that is, the deal that pays anesthesia less. To prepare for a potential merger, Dr. Todd says anesthesia groups should include language in their contract to keep the best contract for the anesthesiologists in the case of a merger or acquisition.
Dr. Todd says anesthesia groups often fail to include language on mergers and acquisitions in a contract because often attorneys are hired on behalf of the hospital to look out for the best interests of the hospital when drawing up the agreement. Anesthesiologists should "count on changes in the playing field," she says, and not depend on a contract that has been around for years to sustain itself in the event of a merger or acquisition.
Situation #2: Surgeons unhappy with the hospital decide to leave. Anesthesiologists can face a major problem if surgeons are unhappy with hospital administration or processes and leave the hospital. With no cases coming in, anesthesiologists may be left to "sip coffee and look at each other," Dr. Todd says. She says the inherent autonomous nature of anesthesia groups contributes to this problem when strategic group planning is neglected in favor of individual practice. "[Anesthesiologists] generally work alone, trading off shifts and covering several hospitals," she says. "They don't work collectively, and they really do need to have corporate planning and strategy sessions."
She says while anesthesia groups tend to meet as a collective once or twice a year, that number should really be a lot higher. "Monthly should be the bare minimum to sit down and compare notes," she says. "One anesthesiologist should be able to say, 'I'm over here at ACME General and I heard this from a surgeon.' That way, they can do a 'what if' analysis and create a strategy based on several alternate outcomes."
She says anesthesia groups can gain leverage with hospitals by writing out a strategy of objectives and measurable revenue goals, as well as a subjective list of things the group wants out of the relationship with the hospital. "These would be things like respect, advanced notice and adequate cross coverage," she says. "The little things are all part of the deal." The group has to work together on these goals because "a one-off anesthesiologist is never going to have the leverage a group has," she says.
In addition, the group should have fall-back plans and strategies that let the hospital know that the providers have other options. Involvement with other hospitals sends a message that the group is not beholden to the hospital, so even if surgeons leave or the merger goes sour, the anesthesia providers can take their services elsewhere.
Situation #3: Surgeons are regularly late or absent, and anesthesiologists are participating in bundled payments. If surgeons are regularly late to the OR and the providers are receiving a bundled payment for an episode of care, anesthesiologists may be forced to work longer hours for less money. Dr. Todd says this problem can be averted by creating a report card system for the surgeons that based the cost of anesthesia on a sliding scale. Because anesthesia starts before surgery and ends after surgery, if surgery is considered by surgeons to take 120 minutes, a hospital has to ballpark 180-210 for the entire process, including anesthesia, she says. If a surgeon makes the surgery significantly longer, the anesthesia group may have to charge more for their time and then fight for a higher percentage of the bundled payment, which would remain the same despite the delay.
She said the problem was solved by creating a report card that documented tardiness and slowness and determined which surgeons were responsible for delays. Once those surgeons were identified, they could either fix their behavior or be left out in favor of higher-performance surgeons. If the surgeon refused to fix the behavior, the surgeons would have to contribute some of their compensation to pay for the extra time spent on anesthesia.
Contact Maria K. Todd, MHA, PhD, at 800.727.4160 or mtodd@mercury-healthcare.