Determining A Fair Compensation Package for Anesthesia Providers

Summary: While general surveys of anesthesia practice compensation may have some value, it is more important to assess what would cause a provider to want to join your group or to leave your group. Those potential causes are analyzed in today's alert.

One of the most perplexing challenges in the current anesthesia market is determining what is a fair and reasonable compensation package for the physicians and CRNAs in the practice. Because the cost of providers is the biggest item in the budget, it plays a critical role in any request for a subsidy from the hospital. While there is some national data based on surveys of anesthesia practices, the data is not always useful or relevant in setting compensation levels. Because of the national anesthesia manpower shortage, we are seeing more movement of anesthesia providers from one practice to another than at any time in the past. It is relatively easy for providers to jump from one practice to another, and many factors come to bear on their level of satisfaction and their willingness to change. A client practice in the West noted that, after twelve years of relative stability among the team, they have now lost seven providers since the beginning of the year.

While much stock has been put into survey data, especially that from the Medical Group Management Association (MGMA), national compensation surveys have some serious limitations. First of all, they are only conducted once a year and so they may not reflect evolving market trends. They also represent limited sample sizes, especially if one is trying to benchmark a practice in a specific market or a practice of a particular configuration. If the question is how are providers paid in a practice with ten physicians and 15 CRNAs at a suburban community hospital, the survey data will not provide any specific insights.

Call and Acuity

The reality is that the most appropriate compensation package is the one that allows the practice to recruit and retain a qualified team of providers. Therein lies the problem. So many factors come to bear on the decision to pick one practice over another. The two most common distinguishing factors are the amount of call required and the acuity of care provided. Hospital-based practices always require physicians or CRNAs to be in-house for the most acute cases at night. Ideally, the call burden is not too onerous, meaning it is not too frequent and the cases performed at night are not too horrific. Call at a trauma center can be especially challenging. The fact is that most practices these days provide care in a hospital or two and at some surgi-centers. Obviously, the surgi-centers do not require night-time call coverage. Therefore, one of the most obvious distinguishing factors is the mix of inpatient versus outpatient care. The more outpatient care, the less the call burden. The real problem is when an anesthesia practice at a hospital is competing with one that only covers at ASCs. In such cases, the providers at the ASC practice probably work less hard and get paid more than those at the hospital.

Acuity of care is often difficult to quantify except in general terms. Does the facility provide cardiac care? Are there a lot of vascular cases? Is there high-risk OB? Providers love to talk about how hard they work, but the typical anesthesia practitioner provides care to a wide range of patients. What most providers focus on is the number of hours they have to work. A forty-hour week is considered optimum, although this may not always be based on five eight-hour days; there are the inevitable long days each week. Of course, there may also be plenty of short days.

Breaking Down the Benefits

The part of the equation that most providers don't always appreciate or factor into their comparison of opportunities is the benefits package. The inclusion of health insurance and a retirement plan can add significantly to the value of the package. Retirement plan options can be especially confusing. If there is a 401(k) plan, which represents employee contributions, the question is whether there is an employer match. Some practices are focused on maximizing the amount each provider can put away for retirement while others are not.

Another interesting factor has to do with the way compensation is calculated and paid. While formula-based compensation plans are relatively rare for CRNAs, they are quite common among physician-only practices in certain markets. Many physicians like having the option to make more money if they work harder. It should be noted that some of these plans are quite complicated, as compensation is based on the total number of units actually billed. There are also practices that pay providers based on the number of shifts worked.

The Self-Assessment

Another reason it is so difficult to make sense of compensation plan data is that while survey data may provide a snapshot of data at one point in time. The question is how it may change over time. A common concern is what happens if overall practice revenue declines. There are many examples of providers that have been lured away to different practices by the perception that they will get paid more, only to find out over time that they did not really make more. What all of this means is that the most useful and relevant data is that collected by the practice itself. When a provider leaves, it is essential that the practice understand why. Were there fundamental concerns with the current practice or just an opportunity to work less for more pay. Many providers get spooked by contentious contract negotiations. When certain facilities seem to be attracting new providers, it is useful to understand why and what the facility is offering. Successful recruitment and retention strategies need to be very specific to the local market.

If you have questions on this topic, please reach out to your account executive, or contact us at info@anesthesiallc.com.