Mining the Potential of the Anesthesia Database
It goes without saying that hospitals could not run their operating room suites without anesthesia. It has been said that the two most significant advances in medicine have been antibiotics and anesthesia. While surgeons appreciate and their patients benefit from the services anesthesia providers perform, few realize just what a powerful database is being created as the details of each case are being captured by billing companies and clinical record systems. Too often. the focus of this database is the financial potential of the practice; but, in the current environment, the focus has shifted from productivity to profitability.
In our experience, five specific anesthesia business challenges can be investigated and addressed using readily available data sources. Applicable anesthesia research would not only identify better operational options but would demonstrate the specialty's potential value as a critical problem-solver. For practices seeking to take more control of their own destiny, timely and reliable data is the key—especially as it concerns these five challenges:
- How efficiently are the operating rooms being managed?
- How effective is the anesthesia team in meeting the needs of the administration?
- How is the economics of surgical and obstetrical care changing?
- What distinguishes surgeons in terms of productivity and profitability?
- How realistic are the coverage and call expectations of the administration?
Operating Room Utilization
It appears there is no one way to measure operating room utilization. Hospitals have a tendency to use metrics that make the operating rooms look more productive than they actually are. Their calculations may be based on hours of usage or number of cases performed, both of which are rather imprecise measures of actual production or profitability.
The option available to anesthesia practices is to measure actual hours of billable anesthesia time or billable ASA units. Most anesthesia practices now have the ability to track activity by anesthetizing location by hour of day. The result is normalized metrics that readily allow the comparison of utilization by anesthetizing location by hour of day, which is perhaps the best way to identify consistently underutilized operating rooms.
Anesthesia Provider Productivity
Hospital administrators love to blame anesthesia for operating room inefficiency and the need for extra manpower. In particular, they love to believe that anesthesia has the potential to impact and modify surgeon behavior. While there may be some enterprising providers who find ways to generate more billable units per day or to perform non-OR services, the fact is that most providers are as productive as the rooms they are assigned to. What most practices really want to know is whether they have the right ratio of physicians to CRNAs. Because most practices now track activity by provider, it is relatively easy to calculate the actual cost of staffing each location as compared to the revenue generated. Sharing these calculations with hospital administrators is often very enlightening.
Economic Trends
We have all come to appreciate the economic impact of an aging American population. Most practices have been seeing a one-percentage increase in their Medicare population year over year. Given the percentage discount applied to Medicare units versus commercial insurance units, the financial impact of this trend can be significant.
Moreover, we are also seeing a migration of cases from inpatient to outpatient. While some surgeons will bring their older, sicker Medicare patients to the inpatient hospital facilities, they may be steering their commercial patients to freestanding ambulatory facilities, which only exacerbates the financial impact of payer mix changes. Anesthesia practices have a distinct advantage here because they have the ability to monitor payer mix changes by surgeon over time, thereby providing a very different and useful perspective for the administration to consider in evaluating its top surgeons.
Actual Surgeon Profitability
Who are the most profitable surgeons? Hospital administrators tend to evaluate surgeons based on surgical volume. A busy surgeon is, by definition, a good surgeon. Block time usage can also be a key factor. The top surgeons get the most block time and are expected to use it all. However, if the question is how profitable these surgeons are, hospitals have limited data because they have little or no access to surgeon billing. This is where the anesthesia database can be very enlightening.
Based on its billing data, the anesthesia practice can evaluate critical metrics such as yield per billed unit, yield per case, and yield per hour of anesthesia time. Such data might well prove enlightening in the assessment of the need for flip rooms. The other thing anesthesia has the potential to assess are changes in scheduling patterns over time. To what extent do some surgeons create inefficient rooms by scheduling a few early morning cases and then only bringing add-ons late in the day, resulting in holes in the schedule?
Assessing the True Cost of Coverage and Call
Perhaps the most vexing issue anesthesia practices face is the impact of coverage and call requirements. Anesthesia has become part of the hospital's leverage to attract surgeons and their cases. To assess the financial impact of a particular coverage grid, one must compare total coverage hours to actual hours of productive operating room time. A particularly useful analysis compares average hours of coverage required per anesthetizing location (room commitment) to average actual billed hours. This can be particularly useful in identifying the minimum production requirements for manpower determination.
For much of its history, the specialty of anesthesia has been a quintessential service organization captive to all the other stakeholders in the facility. This subservient view of the specialty is becoming expensive and risky for anesthesia providers. The time has come for practices to take more ownership and control of the factors that determine its income and lifestyle. This is where the data can make the difference between a viable practice and one that is constantly at risk. If you have further questions on this topic, you can contact your account executive or reach out to us at info@anesthesiallc.com.