When an ASC is partnering with an anesthesia practice, the negotiation can be difficult with several aspects to consider.
Anesthesia Business Consultants CEO and President Tony Mira shared his thoughts with Becker's ASC Review on what ASC administrators should know about anesthesia services, contract negotiations and how ASCs and anesthesia groups will need to adapt to value-based care.
Question: What do ASC administrators need to know about anesthesia services?
Tony Mira: ASC administrators need to know that the most successful partnerships with anesthesia providers are based on clear expectations and achievable service requirements. It's in the ASC's best interest to work with the anesthesia group to establish this clarity upfront because anesthesia providers are often a major driver of profitability. Anesthesia groups generally do an excellent job of collecting and using data on improvement metrics, such as room usage and productivity, and this information can be invaluable to the ASC in driving performance. Similarly, data generated from anesthesia billing can support efforts to improve operating room utilization, maximize throughput and reduce costs by enabling the facility to run only as many rooms as needed to meet changes in demand.
The best partnerships between ASCs and anesthesia groups are grounded in large part on an understanding of anesthesiologists unique needs.These include respect from the ASC for the high cost of working with an anesthesia group, as well as sensitivity to the major impact of case volume and payer mix on the anesthesia group's profitability. An ASC with a heavy governmental payer mix can expect the anesthesia group to request a stipend. Non-government payments can be three-and-a-half to five times greater than government payments.
ASCs contracting for the first time with an anesthesia group should be sensitive to the group's need for working capital. Approximately 85 percent to 90 percent of all anesthesia revenues are used for payroll. A new facility will need to provide significant capital upfront to fund the anesthesia operation until cash collections are generated.
In considering whether to employ anesthesia providers or contract with a private group, ASCs should be aware that private groups offer greater flexibility to manage through periods of low volume, [Private groups] tend to operate more productively — for example, with lower turnaround times — due to the incentive to increase caseload order to increase revenue, and relieve the ASC of the burdens of negotiating complex employment relationships. [They also help with] managing anesthesia billing, which has a uniquely complex time-based orientation.
What makes a surgeon profitable — double booking cases, add on surgeries — is not advantageous to an anesthesiologist. ASCs should be aware of the differences. Anesthesiologists working in the care team model should have a staffing ratio of one to three. Many groups practice at a one-to-two ratio.
ASC administrators should be aware of and be prepared to take advantage of the full scope of services that anesthesiologists are qualified to provide. That scope of services extends beyond the delivery of anesthesia. Anesthesiologists are trained to be perioperative care specialists as well. This care includes everything from "prehabilitation" prior to surgery — including smoking cessation and nutrition — to maximize a favorable outcome, to stratification of patients at risk of postprocedural complications, to postoperative multimodal pain management — including the use of alternatives to opioids — which can shorten recovery times. The same strategies that are being used in inpatient settings with the anesthesiologist-led model known as the perioperative surgical home can be applied in ASCs.
Finally, administrators should recognize that not all anesthesia providers are equal. They should seek well-qualified providers with experience in the facility's market. These attributes will help the anesthesia group establish relationships with the facility's carriers and enable the ASC to facilitate a seamless experience for patients.
Q: What do you think the biggest issue will be moving forward as healthcare transitions towards value-based care?
TM: The biggest issue for anesthesia providers in value-based care is the final determination of where anesthesia will sit in the "food chain" of provider/facility. As payers shift from traditional fee-for-service payment to payment based on value, providers will need to agree on how to share these payments. If not well handled, the transition could lead to rifts among surgeons, facilities and anesthesia providers.
In a surgeon-owned ASC, it is likely that the surgeons and facility will want the lion's share of any bundled payment. It will be incumbent on anesthesia providers to demonstrate their value by helping the ASC improve operational throughput; improve patient satisfaction with effective pain management and other activities, such as follow up calls with patients at home; and minimize drug costs within the ORs. Some current hospital and ASC bundled payment arrangements appear designed to protect current, full reimbursement levels for anesthesia practitioners. However, as bundled payment programs expand, this arrangement is unlikely to be sustainable unless anesthesia develops its own value-based approach. Evidence of this can be seen in anesthesia's development of the perioperative surgical home mentioned above.