Approximately 20,000 medical students take the Hippocratic Oath each year. They vow to spend the next 10 years learning the art and science of medicine, but little do they know that reality also involves economics and administrative problem-solving. In today’s world of bulging hospital networks and multitiered reimbursements, the days of doctors making house calls are long gone. Consolidation in health care is transforming medicine as hospitals, private firms, and even health insurance companies acquire physician practices at a rapidly growing rate. The shift away from independent physician solo practices to systems that employ doctors is intended to make health care less fragmented and less expensive by building infrastructures that foster better care coordination and take advantage of economies of scale. Health care is a $2.8 trillion business, according to the 2012 Centers for Medicare & Medicaid Services, and it operates on the same set of principles that run Fortune 500 companies.
Similar to the growth of ambulatory surgeries in the 1990s, an explosive growth of non–operating room procedures has occurred over the past decade. Today, medical proceduralists perform a wide variety of procedures, ranging from simple needle biopsies to complicated vascular stents. From 1996 to 2006, the volume of surgical and nonsurgical procedures performed at freestanding ambulatory centers tripled, largely as a result of procedures performed outside the operating room, whereas those performed at hospitals remained the same. The most common procedures performed include endoscopy of large intestine (5.7 million), endoscopy of small intestine (3.5 million), extraction of a lens (3.1 million), injections of agent into spinal canal (2.0 million), and insertion of a prosthetic lens (2.6 million).
The current challenge and concurrent opportunity for anesthesiologists is to decide how to expand our services in a changing health care environment that is safe, efficient, and financially sound. The goal of this chapter is to examine the financial and operational implications of non–operating room anesthesia. It is presented in the format of a business plan, starting with market analysis and opportunity, competitive landscape, comparative advantage, and a logistics section with a focus on financial analysis and operational infrastructural analysis. Other issues such as scheduling and staffing are discussed in other chapters.
Market Analysis
Market Trends
Some argue that fee-for-service fuels much of U.S. health care spending and results in excessive usage, but it is also important to recognize that the same financial incentive also propels medical advances. In the 1990s, minimally invasive surgical techniques led to a growth in ambulatory surgeries. Fast-forward 20 years to 2013, the next set of innovations prompting changes is minimally invasive procedures performed outside the operating room.
These nonsurgical procedures are appealing. From the patient’s perspective, it means a less invasive approach and faster recovery. It also appeals to the patient who is too sick to undergo a traditional surgical treatment. From the hospital’s perspective, minimally invasive procedures mean shorter length of stays, higher volume, less overhead cost, and of course the satisfaction of making medical advancements. While market forces are at work, as long as there is a demand, there will be a supply to meet. As a result, the demand for anesthesia outside the operating room also has grown. And yet, many practices may be in a difficult situation if they are unable to staff these procedures efficiently. The failure to properly manage these procedures creates erratic coverage and unhappy proceduralists.
New Customers
The operating room has traditionally served as the anesthesiologist’s home. Anesthesiologists are increasingly perceived as natural masters of operating room management as they make strides in leadership, efficiency, scheduling, and cost effectiveness. Customers traditionally have included patients, surgeons, and hospital management. With the rise of non–operating room anesthesia (NORA) cases, the specialty now has an additional set of nonsurgical customers that demand and value anesthesiologists’ services.
Unlike surgeons, proceduralists such as medical interventionists and radiologists have different needs. For example, they do not perform painful procedures that require multimodal postoperative pain management. In addition, they and the nurses around them are often unused to working with anesthesiologists and thus unfamiliar with their particular needs. Given that NORA cases are often short procedures, they demand faster room turnover and rapid recovery.
An Opportunity
As the aging population grows older and sicker, it is inevitable that the number of procedures performed outside the operating room will continue to increase in the next decade. The chart in Figure 21-1 shows the large increases in the population aged 65 and older from 3.1 million people in 1900 to 35 million in 2000 and projected to 72 million in 2030.
Table 21-1 illustrates the dramatic increase in anesthesia professional participation in the two most common NORA procedures, esophagogastroduodenoscopy and colonoscopy. By 2015, anesthesia services will be involved in over half of these procedures.
| Condition | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|---|---|---|---|---|---|---|---|---|
| Colonoscopy (%) | 23.9 | 27.6 | 31.3 | 34.9 | 38.6 | 42.3 | 46.0 | 49.7 | 53.4 |
| EGD (%) | 24.4 | 28.0 | 31.5 | 35.1 | 38.7 | 42.2 | 45.8 | 49.3 | 52.9 |
The anesthesiology community is adjusting its practice to meet the NORA demand. Without appropriate preprocedural and postprocedural care, cancellation and rescheduling from unanticipated medical complexity will certainly rise. Thus early risk stratification of patients and planned anesthesia service can greatly improve efficiency and reduce cost. Most surgical patients currently undergo a preoperative assessment by a member of the anesthesia team. In contrast, the evaluation of patients for NORA procedures may be lacking despite the fact that some of these patients are ill enough to be hospitalized. The anesthesia group needs to work with the hospital and proceduralists to ensure that proper infrastructure is in place to optimize scheduling and provide safe care of these patients. The question “Is it safe for proceduralists with minimal training in airway and pharmacology to perform the procedure, manage comorbidities, and supervise administered sedation?” is often raised. Everyone wants to avoid the use of unplanned anesthesia on an emergency basis.
When tallied together, the costs of procedural cancellation, emergent anesthesia usage, and unforeseen hospitalizations are expensive and should be minimized. Thus it is important that anesthesiologists take a leadership role by creating appropriate policies and systems of care to preemptively avoid complications and delays and improve efficiency.
Competitive Landscape
Competitors
Many providers such as registered nurses, dentists, and oral surgeons deliver sedation that might be considered competition to anesthesiologists. However, many NORA cases require deep sedation or general anesthesia, in particular patients with complex comorbidities or those who previously failed routine sedation. Because of difficulty in coordination of services or resources, some hospitals may elect to outsource contracts with an outside anesthesia group to provide consistent and reliable services. This represents a loss of business for the existing group. Thus when faced with the question “Can you provide coverage to our new location outside the operating room?” the answer should be yes, “Let’s get together and discuss how we can optimally do this for everyone involved.”
Barriers to Entry
The addition of anesthesia service is perceived to add time and cost. As a result, many proceduralists have historically been reluctant to ask for coverage. In addition, unfamiliarity with anesthesia care also causes reluctance.
From an anesthesia perspective, cultural and operational barriers exist to practicing outside the comfort zone of the surgical suite. Traditionally, anesthesiologists reside in the operating room. Most find experiences outside the operating room to be unpleasant because of ergonomically unfavorable physical space, poor ancillary support, lack of backup equipment, distance from the recovery room, and dealing with a new set of providers who may not understand anesthesiologists’ approach to safe care. In regard to staffing, too few anesthesiologists are available to provide guaranteed coverage to all of the subspecialists. This lack creates delays and frustration, especially when dealing with add-on cases. Financially speaking, proceduralists may find it more economically favorable to rely on sedation nurses for most of their cases and use emergent anesthesia on demand. This situation may worsen when procedure reimbursements are bundled into one case payment.
Competitive Landscape
Competitors
Many providers such as registered nurses, dentists, and oral surgeons deliver sedation that might be considered competition to anesthesiologists. However, many NORA cases require deep sedation or general anesthesia, in particular patients with complex comorbidities or those who previously failed routine sedation. Because of difficulty in coordination of services or resources, some hospitals may elect to outsource contracts with an outside anesthesia group to provide consistent and reliable services. This represents a loss of business for the existing group. Thus when faced with the question “Can you provide coverage to our new location outside the operating room?” the answer should be yes, “Let’s get together and discuss how we can optimally do this for everyone involved.”
Barriers to Entry
The addition of anesthesia service is perceived to add time and cost. As a result, many proceduralists have historically been reluctant to ask for coverage. In addition, unfamiliarity with anesthesia care also causes reluctance.
From an anesthesia perspective, cultural and operational barriers exist to practicing outside the comfort zone of the surgical suite. Traditionally, anesthesiologists reside in the operating room. Most find experiences outside the operating room to be unpleasant because of ergonomically unfavorable physical space, poor ancillary support, lack of backup equipment, distance from the recovery room, and dealing with a new set of providers who may not understand anesthesiologists’ approach to safe care. In regard to staffing, too few anesthesiologists are available to provide guaranteed coverage to all of the subspecialists. This lack creates delays and frustration, especially when dealing with add-on cases. Financially speaking, proceduralists may find it more economically favorable to rely on sedation nurses for most of their cases and use emergent anesthesia on demand. This situation may worsen when procedure reimbursements are bundled into one case payment.
Comparative Advantages
As anesthesiologists, our knowledge and technical skills in providing anesthesia are without peer. Patient safety is undoubtedly the most important service we offer. Although it may be unrealistic to always have anesthesia coverage for every proceduralist because the cost would be too high, it is possible to take an active role in designing the appropriate infrastructure to maximize efficiency and reduce cost.
As the line between surgery and procedure blurs, it is more important than ever to engage the proceduralists to obtain anesthesia evaluations. The goal is to identify the medically complex patients early and match them with appropriately trained providers to better risk-stratify their comorbidities.
It is important that we apply the same concepts of management to settings outside the operating room with the goal being to improve coordination and efficiency. The current system is chaotic. Most proceduralists and anesthesiologists share common frustrations of difficult scheduling and frequent delays. We must integrate ourselves in the procedural suites permanently, the same way we did in the operating room many decades ago.
Financial Considerations
Billing and Monitored Anesthesia Care Reimbursement
Unlike routine anesthesia billing, procedures performed outside the operating room are confronted with a different set of rules. Most surgical anesthetics are provided in a form of general or regional technique. In contrast, the majority of procedures performed outside the operating room are carried out with sedation. For simple procedures such as gastrointestinal endoscopies, sedations provided by anesthesiologists may not be easily reimbursed. Instead, the fees are bundled with the professional fees and paid to the proceduralists. Because of the lack of financial incentives, anesthesia coverage has been slow to grow.
Monitored anesthesia care services are payable only if medically reasonable and necessary. Indications for monitored anesthesia care include the nature of the procedure, patient’s clinical condition, and potential need to convert to a general or regional anesthetic. It is a billable service when provided by a qualified member of the anesthesia team.
Basic Economics
The three simple variables in managerial economics are cost, revenue, and volume. The three are intimately related; careful planning and optimizing of these variables are greatly beneficial.
Cost
Traditional cost accounting includes variable and fixed costs ( Figure 21-2 ).
Related posts:
Critical Monitoring Issues for Non–Operating Room Anesthesia
Intravenous Anesthesia and Sedation Outside the Operating Room
High-Frequency Ventilation for Respiratory Immobilization
Anesthesia for Colonoscopy
Anesthesia Concerns in the Magnetic Resonance Imaging Environment
Anesthesia and Competitive Strategies
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