Negotiating Exclusive Hospital Arrangements: Strategies for Anesthesia Groups from AIAPM (Part 1)
In a session at the recent Advanced Institute for Anesthesia Practice Management (AIAPM) in Las Vegas, attorney Vicki Myckowiak, Esq., of Myckowiak Associates, PC, Detroit, offered practical advice to anesthesia practices for achieving this alignment, with an emphasis on negotiating and maintaining exclusive contracts with their facilities and the crucial role of strategic planning in supporting that process. Myckowiak has been practicing healthcare law for more than 25 years, focusing her practice on representing anesthesia and chronic pain practices. (This is the first of two eAlerts on Myckowiak's presentation.)
The real "negotiation strategy" for anesthesia groups is realizing that negotiation is actually taking place with their institutions 24 hours a day, 7 days a week, 365 days a year, Myckowiak said. In other words, every aspect of the anesthesia group-hospital relationship is important to a group's success in negotiating and maintaining an exclusive hospital arrangement. "Hospitals are also facing consolidation. What we have to be thinking about is where we fit in when these hospitals consolidate?" she said.
"The anesthesia group has to find a way to compete in the changing marketplace," Myckowiak said. "This is going to require very strong leadership, a willingness to adapt, commitment to hard work that's not always compensated, understanding how to win an RFP [request for proposal] and negotiating to keep your contract."
Following is a summary of some of the key takeaways from Myckowiak's presentation.
Be ready to provide more than excellent anesthesia care. Superior care was usually sufficient in the relatively stable, less regulated environment of the past. In the present environment, "groups can come in from anywhere and take a hospital away. Knowing that we no longer have just a local situation, but a national situation, makes a big difference in how we have to think as anesthesia providers as we go into negotiations," Myckowiak said.
Referencing the "Have it your way" slogan of a certain fast food chain, Myckowiak noted that many hospitals "really do want a Burger King," including anesthesia coverage on demand 24/7 and willingness on the part of the anesthesia group to accommodate needs that might change daily or hourly depending on the wants of the surgeons. "How many of you have seen a hospital finally decide to take a surgeon to task and take away the surgeon's block time? That doesn't happen. The bottom line is you can provide a Burger King if the hospital is willing to subsidize and recognize the cost of having it," Myckowiak said.
The same holds true regarding hospitals' expectations for anesthesia groups to participate in alternative payment models, contract with every insurance company with which the hospital contracts and other common requests. An anesthesia group can meet those expectations, but the hospital must understand what it costs to provide that anesthesia care, Myckowiak said.
Understand what the hospital needs and give it to them. Myckowiak refers to this as a process of pre-negotiation. "You don't want to say 'we don't want to provide that service line,'" she said. "You want to see if there's a way to make it happen, because somebody else is likely to come in and offer to do it. If you can give it to them, make sure you do."
In the current atmosphere, that means not only providing the best possible anesthesia care, but also understanding the hospital's strategic plan, which involves having a strategic plan of your own in order to know how your goals mesh with and support the facility's. "If you don't know where you want to go, you can't figure out how to get there," said Myckowiak. "Strategic planning is really critical so you can see where you fit in. And if you understand the hospital's strategic plan, you can be a leader in accomplishing that plan with them rather than being someone who's dragged kicking and screaming into it."
A similarly flexible and adaptive approach can benefit anesthesia groups regarding hospitals' requests in such areas as quality reporting and committee participation. Myckowiak acknowledged that quality reporting is burdensome and often based on measures that are not truly meaningful to anesthesia, "but we need to be more involved in making sure these [quality] measures make sense. Again, it's a train that we have to get on," Myckowiak said.
And while the seemingly endless committee meetings anesthesia leaders are expected to attend can consume a great deal of their time, "if you don't manage to get to the meetings, you're the empty chair," Myckowiak said. "Then you're not getting involved enough in those relationships with administrators and surgeons and others to be able to solidify your relationship with the facility." At the same time, however, "anesthesia groups have got to compensate physicians who take on those leadership roles because negotiation is going on in every single one of those meetings, and you want to be there," she said.
Cover all of the anesthesia lines at the hospital and all locations if you can, Myckowiak advised. She noted an anesthesia group with whom she is working that is striving to be the exclusive provider of services with its hospital group. "We know that if they're at all of these different facilities, some of which are difficult to staff because of their location, the chances that another group is going to come in and take all of that over is diminished, and it becomes much more likely that this group is going to stay at this hospital system," she said.
Embrace value-based care models, such as bundled payments, the perioperative surgical home (PSH) and enhanced recovery after surgery (ERAS). "The big fear with anesthesia is that we're going to go into bundled payments and get whatever crumbs are left over," said Myckowiak. "In fact, I think that will happen if we are not active as we walk down that path to make sure that we are at that table, that our value is seen and that we're paid appropriately for it."
Anesthesia groups may be hesitant to embrace these emerging models because they cannot bill for all of the services provided, but "this is where the world is going," she said. "This is the 'value-added' that other anesthesia groups are willing to provide. There's not going to be a code for it, but there's going to be an expectation, and not only should it be an expectation, but it should be your idea to become that 'value-added' with the facility."
Myckowiak advised groups to offer to take the lead in services such as the PSH. "Then you're working with the surgeons and developing protocols and medication lists"—the kind of work that many anesthesiologists also enjoy and find interesting, she said.
She encouraged anesthesia groups to take a similarly proactive approach with accountable care organizations (ACOs). "Hospitals are moving in that direction. Instead of running from the ACO, be on the board of the ACO," she said.
Next week's eAlert will explore the importance of forming a negotiation team, the role of patient satisfaction surveys, what to do about disruptive providers in your group and other topics from Myckowiak's presentation.
We want to hear from you. Do you have a topic you would like to see covered in an ABC eAlert? Please send your suggestions to info@anesthesiallc.com.