Back to the Source
The real anesthesia goal is to use OR-driven data, provider expertise and practice experience to influence the factors that affect profitability. Because of all the data that is captured to generate appropriate bills for every service rendered, the anesthesia database is an invaluable resource. It is often said that anesthesia practices typically have more and better data regarding what actually happens in the operating room and how surgeons use their time than any other source. Knowing how to utilize this data and how to use it to engage effectively with administration can prove to be invaluable.
Two concepts are essential in the determination of utilization metrics: the designation of anesthetizing locations and normalized data. Every physical location where cases are performed should be clearly identified so that activity can be clearly tracked and evaluated. While this might seem simple, it can be tricky. The main operating rooms are always obvious, but non-OR services may be confusing. It is always important to remember what the objective is. It is often necessary to exclude some activity, such as OB, emergency services and radiology. It is also important to ensure that anesthetizing locations are consistently captured and entered by the billing staff.
Meaningful Metrics
Most management reports provide raw data: cases, units, minutes of anesthesia time and collections posted during a specific period of time, such as a month. While this may be useful to identify practice trends, it is of little utility for any comparative assessment. To determine OR utilization, it is essential to divide the relevant data by the number of locations. If your objective is to compare the billed units of various operating rooms, you would divide the units billed by the number of locations. The goal is to derive a common metric that is meaningful and relevant.
Such metrics can have at least three applications that would support useful dialogue with administration: staffing, optimization and subsidy calculations.
When determining appropriate staffing for a facility, the goal is to base the number of providers needed on the number of anesthesia locations to be staffed. Ideally, each location generates sufficient revenue to cover the cost of the necessary staff. Although in the current market this is not always possible, the goal should always be to match staff to locations based on the cost of the staff and the productivity of the locations. Shortfalls will ultimately be addressed in the calculation of a financial subsidy.
Hospital administrators are always looking for ways to reduce the cost of anesthesia. In other words, they want to keep subsidy payments as low as possible. To accomplish this, they will often hire a consultant to perform a fair market value analysis. The consultant will essentially request the same data needed for a staffing analysis. This is why it is most useful to have prepared and carefully reviewed this analysis before the data is shared with administration.
Increasingly, anesthesia practices are expanding to multiple sites. Such expansion always requires an evaluation of the potential profitability of taking on new venues. To accomplish this, every practice should develop benchmark metrics for the purpose of evaluating new sites. Ideally, each new venue meets or exceeds practice benchmarks.