Provider Groups vs. Hospitals in the Anesthesia Practice

There is a big shift going on in medical care nationwide as a result of the ripple effect of the Affordable Care Act (AFA). Two of the groups that are weathering particularly intense changes are physicians and anesthesiologists. The reason for these shifts, of course, is financial. Insurance firms are pressuring physicians to lower their rates, and at the same time, hedge funds and corporate investors are moving in to take over still-lucrative anesthesia practices.

How Anesthesia Services Work in Provider Groups Versus Hospitals
Typically, anesthesia is provided as a result of a separate self-contained unit within a greater clinic or hospital setting. This is called an independent “provider group.”

As well, there are outside groups that provide independent anesthesia services to hospitals and clinics on a contract basis. In either case, the hospital or clinic typically signs a contract with the anesthesia provider that provides for certain set rates for a menu of services.

What the Future Holds for Unaffiliated Anesthesiologists
The reason corporate buyouts look so good to anesthesia practices (whether within a hospital setting or as a separate provider network) is because this is the best way to guarantee a higher rate of pay for senior members of the practice now and in the future.

Unaffiliated anesthesiologists and practices, and junior anesthesiologist-physicians, will otherwise be forced into a model where they do more work for less compensation under the terms of the AFA.

One way this will occur is that hospitals and clinics will increasingly turn to nurse anesthesiologists and anesthesiology assistants, both of which can provide essentially the same services at lower compensation rates. The American Association of Nurse Anesthesiologists (AANA) has already issued a report noting that this model makes the most sense for providing medical care to more rural areas.

Anesthesiologist Clients are Also Changing
Another new trend is a shift in the types of clients anesthesia practices serve – both inside and outside the hospital setting. With more procedures being performed in clinics and on an outpatient basis in physician offices, less and less of the typical practice’s business is coming from hospital operating rooms.

This shift is leading to anesthesia provider groups starting to market themselves differently, such as by providing their services in “bundles” or “packages” to serve different client groups, including hospice, pain management, palliative care, hospitals, critical care and cosmetic care.

While it remains uncertain just what the future holds for both physicians and anesthesiology practice groups today, what is known is that new business models are required to keep compensation consistent with what trained anesthesiologists have been earning in past years. But how this is accomplished is still a work-in-progress for now.