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October 3, 2024
The Need for a Strategic Plan for Anesthesia Practices to Succeed in a Challenging Staffing Environment 

The Need for a Strategic Plan for Anesthesia Practices to Succeed in a Challenging Staffing Environment 

BY GARY KEELING, CPA, MBA, Vice President Anesthesia RCM, Coronis Health, Tampa, FL 

The Need for a Strategic Plan for Anesthesia Practices to Succeed in a Challenging Staffing Environment 

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I have worked with over 90 anesthesia practices in the past 25 years, and I have never seen such a shortage of qualified anesthesia providers. I have heard stories from groups that their long-time partners resigned from the group, then decided to become pro re nata providers for their same group for more money and no call responsibilities. These types of scenarios were unheard of in the past, but its serves as an illustration of the physician staffing crisis in anesthesia. 

As for CRNAs and AAs, I attended a national trade show a few months ago and the presenter stated CRNA compensation is increasing at a rate of over 15 percent per year, often with additional sign-on bonuses, loan repayment programs and preferred scheduling. For virtually every anesthesia practice in the US, staffing is the biggest challenge.   

In a recent article published by the American Society of Anesthesiologists: 

“The labor supply-demand imbalance for anesthesia clinicians has reached critical levels, with major implications for safe and effective patient care,” said lead author Amr E. Abouleish, M.D., M.B.A., FASA, professor of anesthesiology at the University of Texas Medical Branch, Galveston 

Historically, private practice anesthesia groups were stable and prosperous organizations that would enter into facility agreements that would last for many years and would only add staff when retirements occurred or to match increased case volumes. As reimbursements per case declined due to the shift towards government payers and a reduced supply of qualified anesthesia providers, groups were forced to become employed by their facilities or join national staffing organizations. 

Basically, the business of anesthesia was being handed over to another party to manage. 

For groups that want to maintain their independence, the first step should be for the partners to develop a strategic plan to manage the group with particular focus on short-term and long-term staffing challenges. 

The idea of a strategic plan is to take a step back and take a look at the practice in a larger context. Anesthesia groups often come to realize that what happens outside the operating room often impacts the ongoing viability and long-term success of the practice. There is not a set structure for a strategic plan for any business and especially for anesthesia groups. 

The typical anesthesia strategic plan has three areas of focus: 

    1. Scope of services  
    2. Staffing and the market for additional providers 
    3. Cost and budgeting 

PHASE 1:  SCOPE OF SERVICES 

The strategy for most groups is to maintain their current facility contracts by delivering high quality clinical care without service interruptions for patients and their partner facilities.  

Example of a scope of services as part of a strategic plan:  

Sample Anesthesia Group believes our first responsibility is to the patients, surgeons, hospitals and facilities who use our services. In meeting their needs everything we do will be of high quality. Advances in medical care demand that we learn and implement as appropriate. 

In this stage the stakeholders need to evaluate the facility service expectations for the group and evaluate if these expectations are in line with the current reality of the department.   

Utilization Compared to the Group’s Anesthesia Service Contract 

For example, the service contract requires staffing of 10 ORs per day, the endoscopy suite and obstetrics.   

    1. What do the utilization reports and standard variance reports tell the hospital and the group about the department? 
      1. It may show that in the past year ORs eight, nine and ten were only utilized between 40 percent and 50 percent on a daily basis and all ten rooms were only needed 10 percent of the time.
      2. OR surgeon block times were not utilized consistently, and the flip room report for the orthopedic surgeon who flips every Tuesday show only 50 percent utilization compared to expected.
    2. All good marriages and business partnerships need to have uncomfortable discussions from time to time; so, as in this example:  
      1. Hospital Contracts: Schedule a meeting with the hospital administration and review the data and explain instead of staffing 10 rooms daily, lets reduce the daily requirement to eight or nine ORs and discuss the utilization of schedule blocks and flip rooms so the hospital can approach the surgeons to change their business practices. Since virtually all anesthesia groups now receive some subsidy from their facility, a proactive discussion about OR utilization should be a discussion that the hospital wants to engage in, and it sets the stage for a cooperative relationship regarding OR utilization moving forward.
      2. ASC Agreements: ASCs are a little different since the owners of the facility and the surgeons are likely the same people. If the facility is not being utilized appropriately, the anesthesia group is not generating enough revenue to provide the level of compensation in order to retain and recruit new providers. Perhaps the facility can reduce the ORs being utilized, or they will provide a revenue guarantee subsidy. In recent years, many ASCs have provided subsidy arrangements because the need for consistent anesthesia coverage is crucial to the ASC’s efficiency and profitability.

Example of a scope of services as part of a strategic plan: 

Sample Anesthesia Group has a responsibility to our partners and members to maintain business relationships that make a sound profit. We must experiment with new ideas. Research must be carried on, innovative programs developed and new services and sites must be supported and funded.   

PHASE 2: STAFFING AND THE MARKET FOR ADDITIONAL PROVIDERS 

In this stage, the stakeholders and their business advisors need to evaluate their current staffing needs by location and evaluate their workforce from a short-term and long-term perspective. For example, if there are providers close to retirement, when are they planning to retire and is there an opportunity to develop a plan to retain them in some fashion either part-time or with an amended schedule? 

When anesthesia practices become short staffed, the typical solution is reducing vacation time for providers and ask providers to work longer hours. This is a short-term strategy that leads to provider burnout and often compounds the problem when providers resign from the practice. 

Example of staffing and market for additional providers as part of a strategic plan: 

Sample Anesthesia Group is responsible to our employees, everyone must be considered an individual. We must respect their dignity and recognize their merit. They must have a sense of security in their jobs. Compensation must be fair and adequate, and working conditions clean, orderly and safe. We must be mindful of ways to help our employees fulfill their family responsibilities. 

In a 2023 article published by the ASA, workplace burnout has increased significantly since 2020: 

“Anesthesiologists are experiencing unprecedented levels of workplace stress, according to a study assessing burnout levels since early 2020 published November 23, 2023, in Anesthesiology, the peer-reviewed journal of the American Society of Anesthesiologists (ASA). The study found that of the anesthesiologists surveyed in November of 2022 67.7% had a high risk for burnout, up 14.4% from March of 2020, and 18.9% had burnout syndrome, up 37% since 2020.” 

In this labor market, staffing decisions are often REACTIVE, meaning the group is desperate for a provider, they then agree to overpay to fill the open position. Often, anesthesia groups will agree to special scheduling arrangements (i.e., no weekends or call), so the existing providers become disgruntled that the new employee has a better package than them. 

The group needs to collectively and proactively evaluate and decide on different compensation packages: 

    1. For example: Long-term providers may be considering retirement; but, without call or weekend shifts, they may be willing to work longer.   What is the value of the undesirable shifts?   Perhaps the groups can offer no weekend/no call compensation packages to reflect these changes. The group may have other providers such as physicians recently out of training that desire higher compensation due to large school loan debt, and these extra shifts may be attractive. 
    2. All position types should be evaluated: Some CRNAs/AAs may only want to work in the ASCs and understand they will make less than the hospital staff, but the predictable schedule fits their lifestyle.
    3. Anesthesia practices should consider a CRNA/AA bonus pool: Undesirable shifts pay a shift differential, or a bonus is paid to work shifts on weekends. I have even seen situations whereby the CRNA/AA team is purposely short-staffed to create a bonus pool. For example, the group needs 20 CRNAs and only hires 18. The compensation savings are then put in a pool and the CRNAs that work extra shifts draw from the bonus pool.

Evaluate the market and develop metrics:  

Are our providers being compensated appropriately from a compensation and work/life balance standpoint. The groups business advisors need to research various job listings by state and zip code, so provider compensation keeps pace with the local market.  

For this step proactive planning is key.   

Develop a plan that is fair and regularly reevaluate the metrics. There are a lot of anesthesia providers “fishing in the marketplace,” meaning they will ask for an extremely high compensation package and a special work schedule. In these situations, the group likely will be better off to allow the candidate to interview somewhere else. 

PHASE 3: COST AND BUDGETING 

No group has unlimited resources, and hospitals’ cash reserves are not as plentiful after COVID 19. The group needs to look at the current “local” marketplace and anticipate the need for compensation increases in the next calendar year. The group leadership needs to know what facilities are paying their anesthesia providers within driving distance of the providers home. National and state compensation surveys are meaningless when the group’s providers can drive to a new position for a significant compensation increase.  

Example of cost and budgeting as part of a strategic plan:  

Sample Anesthesia Group is responsible to realize a fair financial return for our partners and employees. Advances in medical care demand that we learn and implement as appropriate, as part of these obligations, we must constantly strive to provide cost-effective and state-of-the-art care to our patients, surgeons and facilities. 

At this stage, consider all options for your group:  

    1. Meet with the hospital to potentially lower the daily room requirements and, in turn, reduce costs.
    2. Discuss an additional subsidy or new subsidy at ASCs.
    3. Pursue new sources of revenue to replace existing business.
      1. Office-based anesthesia (i.e., a few days per week of coverage with a higher yield per case)
      2. Specialty-focused ASC contracts (i.e., orthopedic surgery center)
    4. Explore adding students to the staffing mix so they become a source for future staffing needs at a lower starting compensation.

Implement and share the strategic plan with the stakeholders:

    1. Solicit feedback from the current staff and make adjustments to the plan.
    2. Current group members’ buy-in to the plan is key to the success of the strategic plan.
    3. Share the plan with your facilities:
      1. The goal is to maintain a stable group that provides high quality care, maintains good relationships with the surgeons and contributes to the efficiency of the facility. These objectives are consistent with the facilities management team so they will appreciate sharing your strategic plan.

In my experience, meeting with facility administration and sharing the strategic plan creates a relationship of cooperation and partnership instead of coming to the facility when the group is in a staffing crisis.  

This strategic plan is not a final document; the overall plan needs to be reviewed regularly and adjusted as needed.

The goal is to create a stable, thriving anesthesia practice for the short- and long-term success of the practice and their facility partners.  

Often times, anesthesia organizations are consumed with clinical responsibilities and do not have time to develop a strategic plan. We recommend that anesthesia organizations engage outside anesthesia industry experts to provide these services. At Coronis Health, we employ a team of industry experts that provide their business expertise and allow our clients to focus on their clinical responsibilities.

Citations:  

    1. American Society of Anesthesiologists (June 17, 2024), Anesthesia Workforce Shortage Poses Threat to Healthcare: Short- and Long-Term Solutions Needed to Critical Workforce Imbalance
    2. American Society of Anesthesiologists (Nov 5, 2023), Anesthesiologists Burnout Increased Significantly in Two Years Since Onset of COVID-19, Study Finds

Gary Keeling, CPA, MBA, serves as Vice President Anesthesia RCM for Coronis Health. Keeling has 31 years’ experience in healthcare management, 28 of it devoted to anesthesia practice management and consulting. During that time, he has worked with over 90 anesthesia groups and provided ongoing practice management services and financial management services for clients throughout the US. Other duties include financial feasibility analyses, subsidy needs analysis, payer contracting, including carveouts, revenue projections and the development of chronic pain centers, as well as flat fee anesthesia rate bundled payment reimbursements. Keeling is financial management services for clients a certified public accountant (CPA) and has an MBA with a concentration in finance. He can be reached at Gary.Keeling@CoronisHealth.com.