Understanding The Pain Inflicted by the “Financialization” of Anesthesia
Currently, anesthesia is administered over one hundred million times annually in the U.S. and climbing. However, hospital expenses are rising as healthcare staff leave medicine and their positions are filled, often using costly temporary workers or paying other staff members for overtime or extra shifts.
If the practice of anesthesia was developed to alleviate pain, why are hospitals increasingly seeing anesthesia as a cause of the pains they face? However, is the increased demand a good thing for the future? The answer requires a multifaceted understanding of factors which, historically, have never intersected before.
While a shortage exists across all specialties, anesthesia has been hit hard with the greatest declines. Many have asked if help is on the way from anesthesia residency programs. The answer to that is – not in the foreseeable future. There has been a significant reduction in matching students with training programs. The 2022 residency matching program saw an unprecedented 1,182 medical students (44% of applicants seeking an anesthesia residency) who did not match, suggesting that there are not enough positions available.
As this deficiency sweeps across the nation, major healthcare systems grapple with the need to close rooms and cancel procedures, resulting in lost revenue and decreased availability and quality of care. One result of the supply/demand gap is the impact of increased costs as health systems compete for clinical coverage. As demand increases, the average salary for anesthesia care specialists increases, placing health systems in a difficult position. The result is that a profession dedicated to the relief of pain is being weaponized by the payors to inflict pain on those facilities and professionals who provide anesthesia services.
The Impact of Private Equity Investment in Large Anesthesia Practices
Further exacerbating this issue is the influx of private equity (PE) firms which have invested in, or taken over, anesthesia practices. PE acquisitions of medical groups accelerated in the last five years. However, anesthesia groups were the most targeted and most acquired of the groups (19.4%), and the nation is taking notice:
- A recent article in the New England Journal of Medicine highlighted the expanded role of PE firms in acquiring medical practices. Speaking to the trend of financialization, they put it pointedly, “Ultimately, the financial sector’s increasing grip on the healthcare system invites a pressing question: Is the country getting a good deal?”
- NBC News did a feature piece describing the influx of PE ownership as having deleterious effects on the provision of anesthesia care, including increased costs, lower coverage, and decreased quality.
- The American Society of Anesthesiologists published an independent article in the ASA Monitor cautioning hospitals that there are long-term implications resulting from the influence of PE-backed anesthesia groups.
This recent surge in PE-backed anesthesia groups has been linked to higher anesthesia costs, often as much as a 25% premium. This data, which shows acquired practices to have several sites and many physicians, matches PE firms’ typical investment strategy of acquiring “platform” practices with large community footprints and then growing value by recruiting additional physicians, acquiring smaller groups, and expanding market reach.
The ASA Monitor article which cited the problems that PE-backed anesthesia groups create, also recognized that there is an exception which fundamentally operates differently in the market. The article states, “Although rare, there are also some… with no current PE link, such as… Premier Anesthesia.”
The Premier Anesthesia Solution: A Different Model
Premier Anesthesia remains one of the only anesthesia practice management groups left in the market without any PE or other outside investment. Its status as a true private group remains a real differentiator and part of the company’s value proposition. Without PE investors or shareholder interests driving decisions, Premier offers to keep control within hospital operations leadership by fully aligning with the hospital or ASC to create a program best suited to the facility’s unique needs and strategic direction. And, without the profitability pressure of outside investors, the clinical providers enjoy a rewarding experience of being in a true private group focused on clinical quality, customer service, and practice management expertise. By refusing outside investment or public shareholder interests, Premier Anesthesia is able to understand and address the complexities of the current anesthesiology provider shortage and the pressures it places on healthcare institutions. Our comprehensive approach to anesthesia recruiting and retention is designed to address these challenges head-on.Experienced Providers Ready to Provide Care
Premier Anesthesia leverages a sophisticated, multifaceted approach to recruiting that encompasses a thorough licensing and credentialing process, negotiation of pay and benefits, arrangement of travel, and serves as a single point of contact. Our ability to quickly locate the best providers through our extensive network and ongoing outreach efforts is unmatched.Adaptable and Scalable Solutions
Premier Anesthesia offers flexible, adaptable, scalable engagement models, and is prepared to adjust to shifts in staffing and recruitment, ensuring that healthcare facilities remain profitable while delivering top-quality care. Whether filling temporary gaps or adding permanent team members, our focus on building solid relationships with our partners to meet their staffing needs.Promoting a Vibrant Workplace Culture
While competitive compensation is crucial, Premier Anesthesia understands that anesthesiologists, CRNAs, and C-AAs seek more than just a paycheck. We help healthcare institutions promote a vibrant workplace culture emphasizing work-life balance, professional development, and a supportive environment.Stability and Excellence in Care
With over 20 years of experience, Premier Anesthesia has developed a reputation for excellence in anesthesia management. Our commitment to transparent communication, collaboration, and fostering a positive work environment is at the core of our strategy to mitigate turnover, stabilize anesthesia services, and ensure continuity of care for patients.Conclusion
Premier Anesthesia stands ready to support healthcare facilities and provider teams with effective recruitment strategies, flexible staffing solutions, and a commitment to creating a positive work environment. By partnering with us, healthcare organizations can navigate the complexities of the current landscape and ensure the continuation of high-quality patient care and the stability of anesthesia services.Preston Smith, President
Preston Smith brings over twenty years of healthcare leadership experience to Premier Anesthesia. Board-certified in healthcare management and a Fellow of the American College of Healthcare Executives, Preston originally joined the Jackson Healthcare family of companies as President of Tyler & Company, a healthcare executive search firm focused on recruiting senior leadership for healthcare systems, hospitals, and medical practices.Preston began his career as a healthcare attorney representing hospitals and medical practices – specializing in hospital law, medical malpractice defense, physician practices, dispute resolution, and litigation. He also served as a Senator in the Georgia General Assembly for four consecutive terms and was the Chairman of the Senate Judiciary Committee.
As a result of his patient-centered advocacy and healthcare reforms, Preston was designated Legislator of the Year by a broad spectrum of healthcare organizations, was named to the list of 100 Most Influential Georgians by Georgia Trend, and was ranked number one by the American Justice Partnership as a National Hero of the legal reform movement.
Preston has also served as President of Anesthesia at a national, multi-specialty professional medical service company, later holding the roles of Chief Revenue Officer and Chief Compliance Officer for its parent company.