Outsourced anesthesia up to 26% pricier, study finds

Anesthesiology prices go up 16 percent to 26 percent after medical facilities outsource the specialty to corporate physician management companies, according to research published in JAMA Feb. 28. 

The research is timely given how increasingly common the management companies, many of which are backed by private equity firms, have grown in the specialty of anesthesia. Healthcare facilities either employ anesthesia practitioners themselves or outsource the service to a management company or independent anesthesia group.

The JAMA study was led by Lawrence Casalino, MD, PhD, professor of public health at Weill Cornell Medicine, as senior author, and Ambar La Forgia, PhD, assistant professor of health policy and management at Columbia University Mailman School of Public Health, as lead author. 

Drs. Casalino and La Forgia built a dataset to compare changes in prices for anesthesia services before and after a facility contracted with a management company to facilities that did not contract out. The database included 7.2 million commercial insurance claims for anesthesia services provided for same-day procedures among 2.25 million privately insured patients in more than 6,700 facilities across the United States between 2012 and 2017. 

Insurance "allowed amounts" increased by 16.5 percent after same-day surgical facilities contracted with a management company. The increase to prices grew to 26 percent when the management company was backed by a private equity firm.  

"Conceptually, this is what you’d expect to see ⁠— that PMCs and private equity firms seek to raise prices and find ways to do it," Dr. Casalino said. "I should say, however, that the jury is still out. Proponents claim that PMCs can bring management expertise, capital and probably a better ability to comply with regulations on quality and safety. The effect on the quality of care is not clear."

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