12 Things to Know About Anesthesia and Anesthesia in ASCs

1. There are just over 32,900 anesthesiologists practicing in the United States. Anesthesiologists represent 5.2 percent of the 633,000 practicing physicians in the country, according to the Bureau of Labor Statistics' Occupational Outlook Handbook, 2008-09.

2. Many anesthesiologists are salaried employees of a healthcare facility or anesthesiology practice. Forty-four percent of anesthesiologists were salaried employees in 2009, while 32 percent were either owners or partners in some type of healthcare practice. Nineteen percent serve as locum tenens or contractors, according to LocumTenens.com's 2009 Compensation and Employment Survey –Anesthesiology.

3. An anesthesiologist shortage has increased competition for anesthesia providers. The number of medical students entering anesthesiology training programs dropped greatly in the late 1990s, causing a shortage of practicing anesthesiologists, according to a study 2006 by University of Michigan researchers published in Anesthesia & Analgesia. The shortage led to increased salaries for the specialty due to increased competition and the rise of certified registered nurse anesthetists.

According to Marc Koch, MD, MBA, president and CEO of Somnia Anesthesia, the shortage of anesthesiologists still exists and it has now spread to CRNAs. "There is a nurse anesthetist shortage of approximately 5,000, and this is expected to worsen over time and a "graying" of current practicing anesthesiologists," he says. According to some estimates, 85 percent of the approximately 30,000 practicing anesthesiologists today are 45 or older.

4. Anesthesiology is a top-paying specialty. Due in part to the shortage of practitioners, anesthesiology is one of the top-ten highest-paying physician specialties, with an average annual salary of $344,000, according to Merritt Hawkins & Associates' 2009 Review of Physician and CRNA Recruiting Incentives.

5. CRNA salaries approach those of primary care physicians. The average CRNA salary in the United States was $189,000 in 2008-2009, according to Merritt Hawkins & Associates' 2009 Review of Physician and CRNA Recruiting Incentives. The average salary for a primary care physician reached only $173,000, according to the same report.

6. The economic downturn has reduced the demand for anesthesia services. Despite the exponential growth of ASC-based surgeries, the economic downturn has affected volumes at ASCs across the country. The downturn that has taken place over the past year has decreased the demand for many medical services, and anesthesia is no exception. As the number of elective procedures decreases, so does the need for anesthesia coverage for these procedures. A study completed by the AAAHC Institute for Quality Improvement revealed that 67 percent of ambulatory facilities indicated a decrease in demand for anesthesia services in recent months.

According to board-certified anesthesiologist Sterling "Chip" Wood, MD, partner at Atlantic Ambulatory Anesthesia Associates, decreased volumes are definitely a concern for anesthesia practices. "With the drop in number of elective surgeries, we're looking at ways to generate more cases, whether that's more hours of service, offering services on the weekends, or other things that we can do to increase the number of patients coming in the door," he says.

7. There are three core models for the provision of anesthesia services. ASCs generally employ one of three core modes for providing anesthesia services — the traditional model, the employment model and the owner-provider model. In the traditional model, ASCs contract with independent service groups to provide anesthesia services. In the traditional model, there is usually no compensation agreement between the facility and the anesthesia group outside of perhaps a medical director agreement or stipend. The anesthesia group, then, receives all professional fees for anesthesia services. In the employment model, the ASC employs the anesthesiologists and pays them a salary. In return, the ASC retains all professional fees. In the owner-provider model, a physician-owned ASC incorporates its own anesthesia group to provide services to its facility. The anesthesia company then pays its anesthesiologists a fee, and profits from the anesthesia services go to the owners of the anesthesia group, which are assumedly the same owners of the ASC. The owner-provider model is growing in popularity, though it has been criticized by anesthesiology trade groups as having substantial legal risks.  There trade groups also argue that only anesthesiologists should profit from providing anesthesia services.

8. Outsourced anesthesia models may be a profitable option. ASCs that work with an anesthesia group may achieve greater profitability than other anesthesia models, according to Dr. Wood. While the employment-model seems to be growing in popularity as ASCs look to improve profit margin, Dr. Wood warns that employing anesthesia providers could reduce productivity. "ASCs that employ salaried anesthesiologists can fail to provide incentives for being efficient, while anesthesia groups provide incentives for efficiency because groups are compensated by the number of cases they perform," he says. Dr. Wood also says that ASCs who employ their own anesthesiologists may be tempted to use the least expensive anesthesia services possible rather than the highest-quality in order to increase profits from billing anesthesia services. As a result, ASCs should look for anesthesia providers that are high quality, first, and, then, available at a reasonable cost.  

Additionally, ASCs with outsourced anesthesia services may be more able to adapt to periods of lower volumes, such as the volume dip ASCs are currently experience due to the recession. William Hoffman, MD, corporate medical director of Anesthesia Healthcare Partners, says that anesthesia groups are often willing to work with centers and adjust contracts so that the center can remain profitable. "If a center decides it's better for them to run three ORs rather than four, we can cut down on the number of CRNAs at that center and reassign that person to a new site," he says. Centers that employ their own anesthesia providers may find it more difficult to reassign these providers.

9. Most ASCs continue to contract with outside anesthesia groups. Employing anesthesiologists and other anesthesia providers can help centers improve their profits, but the challenge of negotiating employment contracts with these providers, arranging coverage, such as for when providers take vacation, and managing coding and billing for these services can outweigh the potential financial benefits for many ASCs.

Brent Lambert, MD, president and a founder of Ambulatory Surgical Centers of America, reports that none of ASCOA's centers currently employ their own anesthesiologists, though the company has done so in the past. "Anesthesia is a separate business altogether than running an ASC. It's more similar to practice management. Personnel issues are different and billing is very different," he says. "When we [managed anesthesia services] in the past, we were always negotiating employment contracts with anesthesiologists. We don't like to get involved anymore because it saves us the headache."

Dr. Lambert admits that managing anesthesia services can be profitable, but has noticed that most ASCs who do this have only done so to make up for lacking profits in surgical service lines. "Most ASCs that I've come in contact with that are employing anesthesiologists are looking for another way to profit. Typically, it's an ASC that is not doing well and thinks they can make up losses through employing and anesthesiologist and then profiting from the anesthesia payments," he says.  

According to Ed Hetrick, president and CEO of Facility Development and Management, local anesthesia groups provide the best quality service with the least risk, such as staffing and other expenses required for such arrangement, especially for new ASCs just starting up. "We currently contract with local groups that our surgeons are familiar with and know their quality and their ability to service the ambulatory market," he says.

If ASCs decide to outsource their anesthesia services, Dr. Lambert recommends that ASC leaders discuss their expectations with the anesthesia group upfront. ASCs should look for groups whose physicians will assist in timely room turnovers, are assigned only to the center (as opposed sending a new anesthesiology team every day) and "treat patients like royalty," says Dr. Lambert. "Patients should leave thinking the anesthesiologist was the nicest physician they've ever met, and when they tell others about their experience that helps market our centers," he says.

Dianne Wallace, RN, BSM, MBA, executive director of Menomonee Falls (Wis.) Ambulatory Surgery Center says that her ASC has contracted exclusively with the same anesthesia group more than 14 years. "The biggest benefit to us is that we don't have to 'manage' the physicians and/or their billing. The advantage to them is that we provide all supplies and equipment and a large volume of procedures," she says.

10. Outsourcing to anesthesia groups without the same managed care contracts as the ASC may create headaches for patients. ASCs that outsource their anesthesia services should consider selecting a group that has contracts with the same managed care organizations as the ASC. If an ASC is in-network for a certain payor, but the anesthesia group in out-of-network, patients enrolled with that payor may be unprepared for the higher out-of-pocket expenses associated with out-of-network anesthesia services, says Dr. Lambert.

11. Opinion is divided on bringing in anesthesiologists as investors.
ASCs with anesthesiologists on their medical staff may improve profitability by bringing on these anesthesiologists as co-owners in the facility. Having anesthesiologists as co-owners can help ensure anesthesia staff and the owners share the same goals, and decisions regarding cases are made with the benefit to the ASC, not just the anesthesia staff, in mind, says Keith Smith, MD, founder of Surgery Center of Oklahoma in Oklahoma City, Okla.  
However, others believe that anesthesiologists should generally not be investors unless they will provide a significant number of pain management patients to the centers. "Anesthesiologists generally don't meet safe harbor requirements," says Dr. Lambert. "According, we don't generally bring them in as investors except in some rare cases where they would be performing pain management cases at the center."

12. ASCs that use MD and CRNAs may be best situated for anesthesia provider shortages. The anesthesia provider shortage has created competition for anesthesia services, which could result in newer anesthesia providers willing to work holidays, weekends and nights or be on-call, says Dr. Koch. Facilities that use a MD/CRNA cooperative model, where anesthesiologists and certified nurse anesthetists work together to provide services, will be best equipped to handle the anesthesia provider shortage, says Dr. Koch. Additionally, ASCs, which tend to be more efficient than hospitals and do not require physicians to be on-call, will be attractive sites for anesthesia providers.

Read an additional 11 things to know about anesthesia and anesthesia in ASCs

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