Anesthesiologists routinely perform a “pre-operative” assessment of a patient scheduled to undergo an invasive procedure that requires anesthesia services. This assessment is a standard of care that has benefits that are guided by the provider’s intention to limit surprises. No physician wants to be in the middle of a complex surgical case and first find out about an underlying chronic condition that has deleterious effects on the patient. It is our observation that more anesthesia groups than ever are about to undergo the business equivalent of an invasive procedure. Shouldn’t you apply the same standard to your own practice, and find out how your group will look to a possible partner, investor or employer before your group is in the middle of negotiations with another entity? The radically changing healthcare world will confront all hospital-based anesthesia group practices with complex and difficult choices. Do you stay the course and try to...

It is unusual to open a health policy periodical without seeing the words “Accountable Care Organization,” or, more frequently, “ACO.”  Are these entities as successful as they are visible?According to recent estimates, there are some 500 ACOs operating in the US today.  More than 360 Medicare ACOs have been established, serving over 5.6 million Medicare beneficiaries, since passage of the Affordable Care Act in March 2010.  There are two distinct categories of Medicare ACO:  the Pioneer Model ACOs, which are on a faster track toward value- and population-based payment, with higher levels of shared savings and risk, and the ACOs participating in the Medicare Shared Savings Program (MSSP).  Together, the ACOs reduced Medicare spending by approximately $817 million in 2013.The 23 ACOs that participated in the Pioneer program in 2013, and for which CMS has just released performance data, generated estimated savings of $96 million and qualified for shared savings of...

[Author’s note: This article is based on a piece I wrote for Anesthesiology News.] “What’s our anesthesia group worth?” I hear that question on a frequent basis. In fact, you’re probably thinking it right now. There are a lot of people out there who are happy to fool you with their answer. They might say something like, “well, your practice is worth X times pro forma earnings before income tax depreciation and amortization, otherwise known as ‘EBITDA.’” Or, they might even have a super-complicated formula, sort of like the ones economists use to make you think that they are scientists. But that’s all BS. The real answer is that your practice is worth exactly what an actual buyer will actually pay you to acquire your practice. So, if buyer A will actually pay you $30,000,000 and buyer B will actually pay you $40,000,000, then the practice is worth $40,000,000. That’s the case...

  Management Service Organizations (MSOs) will have an increasingly important role in anesthesia practices. What today are cooperatives of independent anesthesia groups may morph into something quite different in the future. The original goal of an MSO was to be a cooperative of local independent anesthesia services that reduced costs and gained management expertise for its members. The desired functions and advantages were similar to those offered by cooperatives in other industries. Traditional and attainable goals to be sure, but then reality got involved. Here’s one version of reality. Some anesthesia groups and anesthesia professionals are concerned (read terrified) that the “sharks” of the anesthesia business world, anesthesia management companies (AMCs) and private equity investors (PEIs), will devour local practices. The facts behind this assumed reality are quite different than imagined; more people die each year from being crushed by vending machines than from shark bites. Here’s another reality. Many more...

"Properly structured, arrangements that compensate physicians for achieving hospital cost savings can serve legitimate business and medical purposes. Specifically, properly structured arrangements may increase efficiency and reduce waste, thereby potentially increasing a hospital’s profitability."  (Office of the Inspector General, Advisory Opinion No. 07-22, December 28, 2007.) As hospitals come to expect more and more from their anesthesia providers, many groups are uncovering ways in which to add value to their hospital relationships while maintaining their own margins.  One common approach is to explore gainsharing arrangements, a form of pay-for-performance in which anesthesia groups work to enhance quality or to reduce hospital costs and are compensated with a portion of the affected revenues. Since gainsharing arrangements began surfacing in the hospital context, there have been questions about their legality.  The federal anti-kickback statute, Stark law and Civil Monetary Penalties (CMP) statute could all be implicated.  As the OIG warned, “like any payment...