Working with Anesthesiology: Awakening a Sleeping Giant

Working with Anesthesiology: Awakening a Sleeping Giant Leslie Garson, MD, MBA Santa Fe Anesthesia Specialists

Howard J. Gershon, CHE New Heights Group, LLC

www.reach-newheights.com

Agenda • The Challenge • Models for Collaboration • Case Study • Discussion


Page 2

Conventional Wisdom • Procedures make money • Surgical procedures are among the most profitable • Surgical specialties represent significant growth opportunities • Surgeons like to work in efficient settings where they have good support • Anesthesiology is key to OR quality and efficiency


Page 3

And, Anesthesiologists pick the tunes! “Many U.S. operating rooms have sound systems, so playing music during surgery has become commonplace. Some doctors say it relieves the tension; studies have shown it can also benefit patients, even reducing the need for anesthesia somewhat during surgery. In many hospitals, the task of selecting OR music often falls to the anesthesiologist — and it's one many take seriously.”

-AP/Yahoo!, Oct. 3, 2005


Page 4

Survey Says……. Hospital Need & Support for Anesthesiologists 100%

% of Hospitals

90% 80% 70% 60%

63% 50% 40%

51%

50%-60%

44%

47%

30% 20% 10% 0%

need additional anesthesiologists Sources:

subsidize the anesthesia team

have had to use locum tenens

CEOs are dissatisfied with OR profits

- How Successful is Your Anesthesia Department, March 2004, Premier Anesthesia. - ASA Survey, The Tarrance Group, July 2002


CEOs believe that the anesthesia team has helped improve surgery revenue

Page 5

Survey Says…… Anesthesiologists’ Work Satisfaction 100% 90%

98%

% of Anesthesiologists

80% 70% 60%

83% 50% 40%

50%

30%

33%

20%

26%

10% 0%

believe they have helped improve surgery revenue

believe they provide excellent service to surgeons (but only 73% of surgeons agree)

are dissatisfied with their compensation

are dissatisfied with their practice environment

are considering other practice opportunities

Source: How Successful is Your Anesthesia Department, March 2004, Premier Anesthesia.


Page 6

Implications for the OR

have reduced services outside of the OR

62%

% of Hospitals

62% limit access to ORs due to lack of anesthesia personnel

47% 47%

report an increase in surgery wait time

75%

0%

10%

20%

30%

40%

50%


60%

70%

80%

90%

100%

Page 7

Numbers Graduating Anesthesiology Residencies: 1985-2004 2,000

1,800

1,600

1,400

1,200

1,000

800

600

400

200

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Source: “Resident Numbers and Graduation Rates from Residencies and CRNA Schools 2004”, Alan W. Grogono, MD, FRCA


Page 8

Supply and Demand -Studies estimate shortfall of 1,000 - 7,900 Anesthesiologists in 2005 Number of female anesthesiologists

Number of Nurse Anesthetists

Anesthesia sub-specialties Outpatient surgical volume (projected increase by 5-7% per year)

-Preferential urban employment due to higher reimbursement at expense of smaller rural communities www.reach-newheights.com

Page 9

Working Models • Employment • Contracted service – Exclusive/ non – exclusive – National/ local

• De facto coverage


Page 10

Physician-System Relationships Physician Perceived Degree of Control

HIGH Physician Level of Trust in the System

LOW

HIGH

LOW

Healthy, Productive Relationship

Vendor Relationship

Dictating Relationship

Resentful Bondage Relationship

Source: Remaking Health Care in America, The Evolution of Organized Delivery Systems, Shortell, 2000


Page 11

Keys to Collaboration Trust Communication

Fair Market Value Aligned Incentives


Page 12

A Case Review: Anesthesia/Hospital Negotiations for O.R. Coverage at St. Vincent Hospital, Santa Fe, N.M.


St. Vincent Regional Medical Center

• • • • • • • • •

Established in 1865. New Mexico's oldest hospital A non-profit, non-affiliated hospital with a local board of directors The major regional medical center for a 19,000 square-mile area Largest hospital facility between Albuquerque, NM and Pueblo, CO 268 licensed beds 250 Staff physicians representing 22 medical specialties The only Level III Trauma Center in northern New Mexico More than 56,000 Emergency patients treated annually More than 5,500 outpatient surgeries annually www.reach-newheights.com

Page 14

Santa Fe Anesthesia Specialists • 10 member group, in existence since 1986 • Fully independent of hospital as far as billing, administration, operational template, and organizational structure. • Contracting with hospital for financial remuneration relatively recent, having started in 2001. • Currently joint venturing with hospital, individual surgeons, and national ambulatory surgical services company on new ambulatory surgery center .


Page 15


Page 16

Relationships • Historically, anesthesia group has been independent • Covers all inpatient (6 rooms) and outpatient (5 rooms) surgical services as well as endoscopies, MRI, etc. • Approx. 3 yrs ago hospital required coverage of 4th room in main O.R., despite persistent low volume. • Contracted for $160,000/yr minus collections for that 4th room


Page 17

Present Situation • Successful Interventional Cardiology program since 2001 • At request of Cardiology group, feasibility study for Open Heart Program initiated 3 yrs ago. • Determined to start low volume, Open Heart Surgery program beginning in Jan’06 • Plan for 150 Open Heart procedures/yr. • Elective surgeries Tuesdays and Thursdays


Page 18


Page 19

Impact on Anesthesia Coverage • Need to cover “5th” Open Heart Room two days/week • Volume too low to support full time anesthesia associate • Required negotiation with hospital for financial assistance


Page 20

Issues for Negotiations • • • • • •

Trust Communication Fair market value for anesthesia coverage Use of MGMA survey numbers Emergency and weekend coverage for O.H. cases Limited anesthesia personnel available


Page 21

Strategies/Concerns Anesthesia Group -Need to hire full time equivalent -Long term viability of program -Availability of group members -Perception of cooperation

-Volume -Remuneration -Call/post call obligations

Hospital Administration -Overpay for services -Quality of coverage -Availability -Success of program -Cooperation of all specialties involved -Capital outlay -Perioperative nursing/ICU anesthesia interface


Page 22

Current Status • Negotiations finalized • Group contracted to be reimbursed at MGMA average anesthesia salary for 7 FTE (for coverage of 5 O.R.) • Stipend to be paid every month • Every 6 months reconciliation between hospital and anesthesia group of difference between contracted stipend and anesthesia group collections • Either hospital owes anesthesia group money or anesthesia group will owe hospital • Review of terms, collections, case load, etc. at 1 year www.reach-newheights.com

Page 23

Summary • Goal to make negotiations a win-win scenario • Complementary mission statement of hospital organization and anesthesia services • Value added aspect of anesthesia care; dollar amount difficult to establish


Page 24


Page 25

Questions? • Negotiations methods? • Non monetary incentives? • Similar situations with different outcomes?


Page 26

Contact

Howard Gershon, Principal New Heights Group, LLC Santa Fe, NM 87506 505 690 8433 [email protected] www.reach-newheights.com


Page 27