Rising Trend of Hospital-Employed Anesthesiologists and RCM for Physician Practices
Anesthesia has played a crucial role in hospital viability since the inception of the specialty. That hasn’t changed. What has changed is how anesthesia providers are employed. Today we’re seeing health systems and hospitals across the nation employ a larger percentage of anesthesia staff directly, bucking a decades-long trend. In this article, we dive deeper into the market shift and provide key considerations for navigating the modern anesthesia employment market.
By: David Platt, MPA, specialty vice president, Anesthesia & Gary Keeling, CPA-MBA, executive director, Anesthesia
Until the early 2000s, most anesthesia providers worked in private practice anesthesia groups affiliated with a single hospital or health system. As hospital systems started to expand and merge, so did the anesthesia market, with private anesthesia groups joining forces to create “mega anesthesia groups.”
By the late 2000s, many of the newly formed private practice groups had been acquired by investment-backed anesthesia staffing companies, which were becoming a major force in the marketplace.
When COVID-19 came through and upended healthcare, anesthesia was hit especially hard. The post-pandemic anesthesia market has seen staffing companies slow and even exit due to revenue reductions. The sharp decrease in elective surgeries meant less revenue for providers —the vast majority of surgical anesthesia cases are considered elective—and with anesthesia’s high fixed costs, facilities were forced to reevaluate their options for anesthesia coverage.
The No Surprises Act of 2022 brought another significant financial impact. In most states, the act eliminates out-of-network providers’ ability to bill patients for the difference between their billed charge and the amount the patient’s insurance paid, otherwise known as “balance billing.” Perhaps influenced by the legislation, several large insurance plans terminated lucrative contracts with anesthesia staffing companies shortly thereafter.
Hospitals seeing advantages to the direct employment model
Today nearly all non-hospital employed anesthesia groups in the U.S. receive some form of stipend. As the national anesthesia staffing companies attempt to bounce back, hospitals and health systems are increasingly employing clinical anesthesia staff directly. Many hospitals are favoring direct employment because it allows for more control over anesthesia staffing and overall OR management compared to outsourced staffing.
In an effort to improve efficiency and capacity, as well as post-pandemic stability, healthcare executives are pursuing a clinical model that motivates surgeons to perform procedures in their facility. In fact, many hospitals are learning that developing and maintaining a stable anesthesia service for their surgeons and patients can improve the department’s efficiency, thereby increasing capacity as well.
No secret to success
Like most complex issues, there is no single best approach for anesthesia employment. Instead, hospitals should seek to employ decision-making that builds upon their mission while incorporating a clinical culture that promotes desired results: quality of care, happy patients and providers, and last but not least, cost effectiveness. Further, well-deployed revenue cycle management (RCM) plays a key role in supporting efficiency and revenue, resulting in better outcomes for providers and patients. Hospitals and practices should regularly review their RCM for more optimal ways to combine people, processes, and technology.
Compensation for anesthesia providers is market-driven. At present, we’re seeing a shortage of anesthesia providers and increasing wages. Most of the increases are going to certified registered nurse anesthetists (CRNAs), who are viewed by many as a cost-effective alternative to anesthesiologists. Nonetheless, maintaining market compensation is key.
Clinical practice models
Administrators and providers must determine appropriate anesthesia clinical practice models that consider many relevant factors, chief among them being the hospital’s case mix and patient acuity, surgeon acceptance of the various anesthesia models, local market forces, and ultimately cost. Engaging the help of a professional analyst well-versed in anesthesia practice management to conduct a staffing mix analysis can help ensure the ideal balance of quality, coverage, and cost to the department.
CRNA-only coverage options
At times, CRNAs may perform cases independent of medical direction using the QZ billing modifier CRNA, “without medical direction by a physician.” Because the revenue is typically the same, departments might consider providing CRNA-only coverage in specific clinical settings, with relevant factors considered.
Creative staffing solutions
In our experience, providers working cooperatively with hospital administration to form creative bonus and coverage solutions often establish more stable, thriving departments. It’s an environment that can also enhance recruiting efforts. When implemented effectively, bonus programs can support themselves, resulting in the facility employing the optimal provider FTEs, with certain shifts covered via an incentive system.
For example, many seasoned anesthesiologists who still love the profession may retire early or transition to a surgery center to reduce the call burden of their job. To prevent this from happening, hospitals might consider allowing senior members of the anesthesia practice to reduce their weekend and call requirements with a commensurate reduction in compensation. On the flip side, if given the option, younger anesthesiologists saddled with educational debt may be motivated to cover extra shifts.
Appeal to more motivations
Anesthesia providers have diverse motivations. Some want extra flexibility, some want more vacation, some want to work in a very specific environment. Extra shifts, surgery center work, sell shifts and FTE sharing can foster a positive work-life balance among anesthesia providers. Consider competitive bonuses and implementing incentive programs with components such as on-time starts, patient survey results, or other metrics aimed at improved operating room results.
New RCM models can help improve patient satisfaction
Today, hospitals have the ability to perform anesthesia RCM directly within their electronic medical record (EMR). This practice, also known as the single billing office (SBO) model, has been gaining favor among health systems who employ their own anesthesia staff.
The SBO strategy is to streamline the patient billing process. In our experience, higher patient satisfaction rates result when patients get a single bill that reflects all medical services received involving the hospital-employed clinical staff, inclusive of anesthesia.
SBO model works well with anesthesia operationally
In our experience, integrating billing operations with the health system has gone well for all parties. From a health system perspective, having all information in one database can make it easier to manage multiple clinical departments. The most critical aspect is the anesthesia module build.
Certain EMRs are more conducive to the SBO model, however. When switching, it is important to have sufficient expertise on hand for conducting an anesthesia build within your facility’s EMR. Consider utilizing a third party with EMR anesthesia-module construction expertise. Once the build is complete and all features are tested and functioning appropriately, also consider an anesthesia RCM services provider who has experience working directly within your EMR. Following the above process will maximize the potential for reducing administrative overhead while optimizing associated revenue.
David Platt, MPA
Dave has over 23 years of experience in anesthesia billing and practice management and is responsible for anesthesia client business development and client retention. He works alongside operations and practice management of Change Healthcare’s Anesthesiology client base and participates in strategic projects involving practice expansion and facility relationships. He has extensive healthcare management experience exclusive to Anesthesia practice management. Dave holds a master’s of public administration (specialization in health care administration) from West Virginia University.
Gary Keeling, CPA, MBA
Gary has over 23 years of experience in anesthesia billing and practice management and is responsible for anesthesia client business development and practice management support of Change Healthcare’s Anesthesiology client base. He has extensive healthcare management experience exclusive to Anesthesia and holds a master’s of business administration from Duquesne University.