The hidden value in a hospital: 3 ways anesthesia can impact the bottom line

Many hospitals may be neglecting a significant service that impacts their bottom line.

"Anesthesia services are still often marginalized and very much underestimated," says Hugh Morgan, vice president of quality assurance for Somnia Anesthesia, a national managed service organization focused on anesthesia. Mr. Morgan continues, "Marginalized in the sense of being viewed almost entirely as a cost commodity and underestimated in how the service can have a tremendous value and impact on the hospital's bottom line."

As a result, he says, anesthesia services are often treated like a minimal, on-demand hospital-based service with little, if any, value. Yet unlike most other important yet isolated medical specialties, such as radiology and cardiology, anesthesia presents wide-reaching value in the acute care setting because it touches almost every area of the hospital and far beyond the walls of the operating room.

Providing care across many areas, including the operating room, obstetrics, endoscopy, the cardiac catheterization laboratory and interventional radiology, anesthesia can have a tremendous impact on patient throughput, care coordination, outcomes, patient experience and the overall costs of care in those areas. In other words, anesthesia embodies the concept of a hospital's triple aim, providing accessible care while influencing the patient experience and costs of care. Here are three ways to leverage anesthesia services to achieve an effective and value-add triple aim while improving the bottom line at your hospital.

1. Operational impact
Anesthesia providers have always been viewed as the defacto medical leaders in the operating room and thus should be influencing the efficiency, productivity, patient experience and outcomes across the surgical continuum of care. Anesthesia should lead and facilitate an interdisciplinary approach in all care areas by aligning surgeons and nurses to create a trifecta care delivery model, according to Mr. Morgan.

"Most surgeons sort of come and go in the OR. They are critically important to bringing in business, but for the most part they are just using the hospital's space and resources for their surgical practice whereas the OR is the daily domicile for the anesthesia clinicians. As such, anesthesia should be the daily advocates, alongside nursing, on behalf of the hospital, responsible and accountable for managing the 'business' of the operating room including the overall efficiencies and productivity related to the safe and cost-efficient throughput of the patient.

Anesthesia should be responsible for getting cases started on time in the OR, the turnover of the room, and managing the patient's overall surgical experience from beginning to end. It should be responsible for a patient's preoperative expectations, as well as their postoperative experience, to include the pre-surgical preparations and postoperative pain, nausea and vomiting, which can increase length of stay, decrease patient and surgeon satisfaction, and ultimately impact a hospital's bottom line.

According to Mr. Morgan, the same concept applies outside the walls of the OR in the care areas touched and influenced by anesthesia throughout the hospital. "Anesthesia should be responsible in all of their care areas for leading the safe, efficient and cost-effective throughput of the patient," he says. However, this is often not an easy task. It not only requires effective clinical leadership, but also requires an effective complement of supportive resources. The supportive resources can lend experience and expertise to ensure the right deployment of anesthesia resources, at the right cost, with the right results for the hospital.    

To effectively manage these critical moving parts and maximize operational efficiencies in anesthesia throughout the hospital, Mr. Morgan suggests hospitals consider partnering with an anesthesia management services organization to achieve the desired results.

"Often hospitals don't know how to approach their anesthesia group, manage them, or even hold them accountable to achieve the desired results. That's where you need the experience and expertise of a management company," Mr. Morgan says. "An effective anesthesia MSO is no different than effective hospital management, which is needed to provide the strategy, infrastructure and resources to support and facilitate success."

2. Qualitative impact
In addition to anesthesia's operational impact throughout the hospital, the quality of anesthesia services also has a tremendous impact and varies greatly across anesthesia practices and hospitals.

"Since anesthesia is often marginalized as a cost commodity, service decisions are often predicated on costs of care rather than on the quality of care," Mr. Morgan says.

The unintended consequences, according to Mr. Morgan, are that hospitals might initially save some direct anesthesia costs on the their bottom line, but they often run the risk of significantly increased costs from less than optimal compliance, quality, outcomes and patient experiences.

High performing anesthesia group should be consistently meeting CMS and accreditation requirements for quality and compliance, according to Mr. Morgan. Anesthesia should maintain continuous survey readiness to address all of the common areas of anesthesia compliance risk to include medication safety and security, infection control and documentation. Anesthesia should also lead the hospital's interdisciplinary efforts surrounding sedation and acute pain management, which presents significant compliance risk and impacts the patient's experience and length of stay. Beyond that, Mr. Morgan says, anesthesia groups should also be capturing and reporting clinical outcomes and useful patient experience metrics as a means to monitor, validate and improve performance.

"Oftentimes the anesthesia group will capture the data, but not do anything with it," Mr. Morgan says. "This is a common yet avoidable pitfall in quality management as anesthesia [providers] need to create the infrastructure to capture good data, and then continuously monitor, report and act on it to improve quality and outcomes."

Additionally, anesthesia services need to go beyond quality metrics to influence and manage patient expectations and experience, Mr. Morgan says. Patients should be "overly-informed" of every step of the process, especially during care handoffs, because they can often be the source of communication and quality breakdowns.

Improved patient engagement by anesthesia clinicians can also drive better HCAHPS scores for the hospital, which in addition to other clinical quality outcomes, impact bottom line costs. "Anesthesia quality data can be used like good driving discounts for reducing anesthesia malpractice premiums and increasing commercial insurance reimbursements," Mr. Morgan says. Taking good quality metrics to malpractice insurance carriers to demonstrate how an anesthesia group compares to the local region or the rest of the country can drive savings for anesthesia groups and hospitals, which often subsidize inflated malpractice costs.

3. Financial impact
Anesthesia typically represents a big cost center number on the balance sheet for most hospitals. As such, anesthesia groups should be transparent with the organizations they serve, according to Mr. Morgan. These multimillion dollar costs add up and can be influenced in a number of ways if not well managed — especially when it comes to compensation and the staffing model. On the revenue side, if the anesthesia group's billing/revenue cycle performance is not optimal, that ties back into a hospital's bottom line, he says. It means a hospital is unnecessarily subsidizing the loss from non-maximized reimbursement. "The revenue side is just as important to analyze and scrutinize," Mr. Morgan says. "It can have a tremendous, multimillion dollar impact on a hospital's bottom line."

For example, the national anesthesia claims error rate is an estimated 25 percent, resulting in an average underpayment rate among commercial payers of about 6 percent, according to Mr. Morgan. While that may not seem like much, if a group bills $10 million annually to commercial payers, that's $600,000 lost each year. "That can add up on the hospital's bottom line if the group is subsidized," he says.

Mr. Morgan stresses that anesthesia needs to more often publicize and validate their value-added services to drive cost savings and quality for the hospital in order to keep the specialty from being marginalized as strictly a cost commodity.


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