FAQs

What portion of total healthcare costs is attributed to anesthesia?

According to a paper published by the Congressional Budget Office in January 2008, real health care expenditures per capita increased nearly sixfold from 1965 to 2005 in the United States. In 1992, it was reported that three percent to five percent of total healthcare costs were expenditures controlled by anesthesia providers. According to the Kaiser Family Foundation, expenditures on healthcare surpassed $2.2 trillion in 2007. Today, that figure continues its upward trajectory.

Who pays for the purchase of anesthesia services?

Although third party payors, such as HMOs and insurance companies, fund the largest share of the cost for anesthesia services, they, along with patients, purchase anesthesia services. It is important to remember, however, that the provider of anesthesia services figures prominently into this equation, since he or she makes the ultimate determination of which services a patient receives.

Bottom-lining costs for anesthesia services is a complicated process. What factors contribute to overall costs for anesthesia?

Informed decisions about anesthesia services are made when those factors that contribute to overall costs are identified. When addressing cost, consideration must be given to the following: service providers (credentials; demand vs. supply; facility staffing model; geographic location; liability); technology (equipment—static vs. disposable; drugs; skill level); and, facility and demography (market strategy, i.e. trauma center vs. community hospital); procedure (elective vs. emergent); type (ambulatory vs. in-patient); and various administrative influences which are driven by the organizational structure and governance (ownership, board of directors).

How do patients figure into the cost equation?

Demand for anesthesia services and their associated costs is created by patients who undergo elective or emergent surgery. According to the Centers for Disease Control, each year in the U.S. about 27 million surgical procedures are performed. Surveys have shown that while the majority of patients are comfortable selecting surgeons and healthcare facilities, lack of knowledge of anesthetic techniques and agents often prompt patients to leave the task of choosing an anesthesiologist to the surgeon.

What role does liability play in determining costs?

As with consumers of every stripe, patients have expectations of their total surgical experience. If their experience does not align with their expectations, they may refuse payment or, worse yet, sue. Defending against such litigation is costly to both service provider and facility. In fact, in an effort to avoid such an outcome, providers may elect to take defensive medical practices and/or order extensive testing and monitoring, all of which add to the cost of providing anesthesia services.

What is the most common issue associated with providing anesthesia services

Staffing and coverage. With the demand for anesthesiologists continuing to outstrip the supply, the impact on healthcare institutions will persist. Furthering complicating the matter is the desire of anesthesia providers to work more regular shifts (no call or weekend). While that fact may not be readily embraced in the hospital setting, it is good news for ambulatory surgery facilities. The right AMC will be adept at identifying ways to achieve staffing levels that will satisfy every stakeholder need.

What about choice of service. How many types of anesthesia service providers are there?

Anesthesia services are organized in three provider groups: MDA only, CRNA (Certified Registered Nurse Anesthetist) only, and as a team, with MDAs directing CRNAs.

What are the differences between MDs and CRNAs?

Anesthesiologists generally are medical doctors who provide patient care before, during and immediately following surgical or medical procedures. An anesthesiologist may be involved in pain management. Upon graduating medical school, the anesthesiologist spends a year in an internship followed by three years in a residency program. Anesthesiologists are certified by the American Society of Anesthesiologists or the American Board of Anesthesiology.

Certified Registered Nurse Anesthetists are currently licensed Advanced Practice Registered Nurses (APRN). Their credentials include a Bachelor of Science in Nursing (BSN) or other appropriate baccalaureate degree, at least one year of experience as an RN in an acute care setting, and a master’s degree from an accredited nurse anesthesia program. Upon completion of a master’s, CRNAs must pass a national certification exam.

CRNAs must be recertified every two years and meet the requisite standards mandated by the state in which they practice. CRNAs often work collaboratively with anesthesiologists as part of an anesthesia care team.

Another point of differentiation between the two comes in the form of industry recognition for the service they provide. When anesthesia is administered by a CRNA, it is considered the practice of nursing; when provided by an anesthesiologist, it is recognized as the practice of medicine.

How can facilities optimize revenue management for an anesthesia department?

There are three contributing factors to an anesthesia department’s financial resources—insurance provider payments, patient payments and facility-based subsidies. While there are different anesthesia engagement service models, each is impacted by those three factors. Since payment collection is the lifeblood of any anesthesia department, comprehensive review of the department’s revenue cycle is critical to achieving optimal revenue management.

AMCs do not offer a one-size-fits-all solution; nor should they. How can a facility begin the process of selecting the AMC that meets, and understands, its particular needs?

An organization must be sure that any AMC partner they are considering has subject-matter expertise in a variety of areas, and with brings with it the ability to identify and assess a variety of issues—financial, operational, clinical and contractual. At the same time, the AMC must also offer an appropriate set of solutions that positions a facility optimally for the future. Knowledge of state and federal regulations that provide fiscal guidance is equally important. Prior to signing a long-term agreement, a medical facility should be sure the provider is the “right fit”.