Optimizing Anesthesia Services: Practical Solutions for ASC Success

Optimizing Anesthesia Services: Practical Solutions for ASC Success

Authored by Traci Albers, CEO

Anesthesia providers face increasing operational and financial challenges including declining reimbursements, rising salaries, and provider shortages, which create significant hurdles for maintaining stability in surgery centers. In this blog, we will explore these issues in detail and provide practical strategies to help you navigate and address these complex challenges effectively. Understanding these factors is crucial for developing comprehensive solutions and ensuring the stability of anesthesia services and financial health of your surgery center.

Understanding the Current Anesthesia Landscape

In the last 5-7 years, anesthesia services have been influenced by several key factors:

–Demand and Supply Imbalance: The number of operating and procedural rooms has increased by approximately 15% nationally over the past five years. However, the number of anesthesia providers has grown by only 5%. This imbalance has led to a reliance on locum tenens or contract staff, who are typically compensated at higher rates. For example, locum tenens anesthesiologists can earn up to 30% more than permanent staff. Consequently, these elevated compensation benchmarks increase overall anesthesia costs at the local level.

– Provider Shortages: The anesthesia field continues to face provider shortages. A significant factor is the limited Graduate Medical Education funding for new residency positions, which was capped in 1997 and only slightly increased in 2020 by adding 1,000 positions across all specialties. With an estimated annual need for 3,000 new anesthesiologists, this increase is insufficient to meet current demand, exacerbating the shortage.

– Reimbursement Reductions: According to VMG Health, Medicare anesthesia reimbursement rates decreased from $22.27 per unit in 2019 to $21.12 in 2023, representing a 5.2% decline. This reduction translates to a significant loss in revenue for anesthesia providers, which can ultimately impact ASC’s, whether anesthesia providers are employed or contracted.

Analytical and Strategic Approach

SMP employs a structured methodology to address these challenges, focusing on compensation analysis, ASC efficiencies, and contract negotiations.

1. Compensation Analysis:

– Macro-Level Assessment: We utilize salary survey data and online compensation profiles to understand national trends. This is only one data point we utilize, as these surveys can lag what is actually happening in the local market.  PayScale and other like surveys are good sources to utilize to begin your compensation assessment.

– Micro-Level Assessment: We next validate micro-level data through direct conversations with local providers, ensuring our compensation recommendations reflect local market dynamics. In one local market, for example, CRNAs with 10 years of experience earn an average of $210,000 annually, slightly above the national median, reflecting local market conditions.  There are also other benefit considerations that need to be considered (e.g., retention bonuses, retirement, PTO, etc.).

2. ASC Efficiencies

– Utilization Analysis: We assess surgery center utilization, including actual case volumes and optimal scheduling practices. For instance, a review of 2023 data revealed that a center performing 5,237 cases annually required consistent coverage for two operating rooms, occasionally extending to a third. This translates to an average of 20 cases per day, with peak days requiring three rooms and off-peak days managing with two.  In this case, the surgery center was providing up to four rooms to operate, which required anesthesia staffing but no additional cases to help offset that cost.

– Care Model Evaluation: We examine the anesthesia care delivery model, comparing the costs of medically supervised and directed models versus CRNA-only models. For instance, transitioning from a medically supervised model to a CRNA-only model can reduce costs by up to 25%, primarily by lowering compensation expenses.

– Revenue Cycle & Contracting: We provide detailed review to ensure the ASC is capturing all reimbursement and in a timely manner.  In addition, we review payer contracts to ensure we are maximizing all opportunities.  Part of this analysis is also understanding the surgery center payer mix.  A surgery center with a high Medicare and Medicaid mix will see a lower overall reimbursement than a surgery center with a high commercial mix.  It will then require different strategies to offset lower revenue challenges.

3. Contract Negotiations:

– Sample Contract Language: If your ASC contracts with anesthesia providers, we offer sample contract language and strategies to structure anesthesia agreements. Key elements include requiring quarterly documentation to support any type of subsidy or payment, , transparent anesthesia compensation practices, and metrics to assess performance.

– Flexibility and Adaptation: We recommend building flexibility into contracts to allow for adjustments based on changing needs and market conditions. This approach ensures long-term sustainability and mutual benefit. For instance, a contract clause might allow for annual reviews and adjustments based on market salary surveys.

Key Recommendations for Surgery Centers

Based on our analysis and experience, we propose the following recommendations:

1. Ensure Compensation Transparency: Access to actual compensation data for anesthesia providers is crucial. Surgery centers must understand the anesthesia market to not only ensure you are able to staff your operating rooms but also to understand how you can support these salaries, if employed or contracted.
2. Optimize Staffing Models: Align staffing with actual case volumes to minimize unnecessary expenses and improve efficiency. For example, optimizing scheduling to ensure maximum room utilization can reduce idle time and associated costs.
3. Revenue Cycle and Payer Contracting Optimization: Ensure effective revenue cycle practices and updated payer contracts are in place. Given the declining reimbursement trends from Medicare and commercial carriers, anesthesia revenue cycle processes must ensure optimal revenue capture.
4. Engage in Ongoing Reviews: Maintain continuous discussions with anesthesia providers and hospital partners to adapt to evolving needs and market conditions. Regular reviews can identify opportunities for cost savings and efficiency improvements.

Summary: Achieving Success

Anesthesia is a key partner in your ASC’s success.  As such, you need to work collaboratively with them to deliver high-quality, low-cost efficient care.  In the last ten years, this partnership is even more critical with the challenges anesthesia is facing.  A strategic approach to successfully partnering with anesthesia is critical to your ASC’s future.

These strategies enable surgery centers to independently manage their anesthesia services more effectively. For those seeking additional expertise and tailored solutions, professional anesthesia consulting can offer the specialized support needed to navigate these complex challenges successfully.

For more detailed consultation and support, click to contact us.