In a recent Becker’s Hospital Review Webinar titled “Demystifying the Anesthesia Stipend: Achieving More Coverage and Better Quality for Less Cost,” Somnia Anesthesia provided hospital administrators with best practices for reducing anesthesia expenses while improving anesthesia revenues and quality.
The catalyst for this Webinar is a recent ASA hospital study showing 47 percent of administrators are reducing or redirecting operating room procedures due to anesthesia staffing issues.
Presenters include Marc E. Koch, MD, MBA, co-founder of Somnia Anesthesia who works with hundreds of facilities on solving this very issue, and Dr. Larry Schecter, MD, CMO of Providence Regional Medical Center in Everett, Wash., who shared the wisdom he recently acquired when forced to replace his entire incumbent anesthesia group within 90 days, including the task of hiring 30 clinicians in 30 days.
While Dr. Koch insists there is no easy solution to make the stipend disappear, he shared several best practices for bringing anesthesia costs in line while also improving revenue:
1. Decreasing anesthesia expenses
- Deploy cost-efficient staffing models. Each facility must determine whether they are candidates for an MD Only, MD/CRNA, or CRNA only model. If an MD/CRNA model is an option, facilities can often lower costs and increase anesthesia coverage while maintaining or improving anesthesia quality for patients as well as surgeons.
- Ensure fair market value salaries. After identifying the necessary positions, staffing expenses can be reigned-in by determining and implementing fair market value salary and benefits for physicians and CRNAs.
- Reduce administrative costs. Hospitals that wish to reduce subsidy amounts should look for anesthesia groups with the lowest percentage of costs associated with practice administration. Groups with large economies of scale are often successful in providing lower administrative costs.
2. Increasing anesthesia revenue
- Explore additional revenue streams. Many facilities leave anesthesia revenue from sources such as GI or pediatric radiology on the table. All potential streams must be explored.
- Improve payor rates. Savvy payor contracting can greatly improve revenue. Hospital leaders must be willing to undergo tough negotiations and consider going out-of-network with certain payors for periods of time if they are unable to get a reasonable contract for anesthesia services.
- Streamline revenue management. The revenue cycle must be smooth, efficient and error-free. Management requires anesthesia expertise coupled with proprietary technology.
Dr. Schecter, who commits much of his time at his 372-bed acute-care hospital focusing on improving quality, offered the following best practices:
1. Find an anesthesia group that will work collaboratively with the hospital to reduce the subsidy.
2. Find an anesthesia group that is willing to be held accountable for performance. He presented a portion of PRMCE’s “Anesthesia Scorecard” which tracks more than 20 key anesthesia metrics including on-time starts, turnaround time, epidural success and meeting attendance.
3. Do it right the first time. Transitions are tough on the facility and tough on staff.
Webinar takeaway
The anesthesia subsidy can almost certainly be lowered, and revenue can nearly always be improved, but to completely eliminate the stipend is likely out of the question at this point. Dr. Koch suggests victory is not defined by the size of the stipend, but instead by the amount of value delivered per dollar spent.
Download the Webinar presentation and slides by clicking here.
Learn more about Somnia Anesthesia.
