The Year in Review: How 2019 Affected Anesthesia Practices

Summary
This year provided new challenges to America's anesthesia groups. This article takes a look back at the year that was and summarizes the issues and trends that were most important to the practice of anesthesia.

As we close out 2019 and prepare ourselves for a new year, it is time to seriously assess the events and developments that impacted the specialty of anesthesiology over the past twelve months. American medicine is in a constant state of evolution; the only constant is change. The key to success lies in knowing which trends to take advantage of and which to avoid. The challenge is that some of these trends, including those that bubbled up in 2019, are more subtle than others. Because of the size and distribution of our client base across the country—especially now that we have joined forces with Medac—our practice managers have been afforded a unique perspective on a wide range of clinical, financial and strategic developments.

Opioids and Pain Management

Clinically, much of the conversation across the country has focused on the national opioid crisis. This is not to say that anesthesia providers are being accused of encouraging the abuse of narcotics, but to say that anesthesia providers needed to do their part to minimize the use of opioids. While there were a number of factors that led to the dramatic increase in the use of nerve blocks for post-operative pain management this year, there was an underlying hope that more targeted nerve blocks would help reduce the need for opioids. A review of the use of nerve blocks by our clients revealed not only an increase in absolute terms, but a proliferation of new approaches and techniques. We believe this will continue into the new year and continue to provide some additional revenue potential for the majority of our clients.

Hospital Dynamics

Financially, most of our clients continue to be dependent on the hospitals they serve for some level of financial support. The continued aging of the American population and the corresponding increase in the percentage of Medicare patients being seen is just one of many factors exerting downward pressure on practice income. The good news is that for most of our clients surgical volume continues to increase, although the disparity between inpatient and outpatient venues is growing. The problem is that declining collections per case ultimately erodes overall revenue potential. Still, if there was one area of practice management that most challenged our clients last year, it was their negotiations with hospitals—all of which are struggling with their own budgetary challenges.

Reexamining Endoscopy

Endoscopy was for many a saving grace, and for others a kiss of death. Many practices saw dramatic increases in their endoscopy business as more and more endoscopy centers have come to appreciate the value of professional anesthesia service. Admittedly, 2019 saw the full impact of the new endoscopy codes. The original two codes with a base value of five units were replaced with five new codes, the net effect of which was a material devaluation. A comparison of endoscopy collections from 2018 to 2019 clearly indicates a slight drop in the average yield per case given that the average ASA units for a Medicare colonoscopy dropped from seven to five.

A few years ago we used to say that for most clients endoscopy was the fastest growing and most profitable line of business. Very few practices would continue to make such a claim based on their performance in 2019. While the flood gates opened a few years ago with the CMS policy change assuring payment for anesthesia for endoscopy services, a growing list of commercial payers are starting to push back with much more stringent pre-authorization policies.

Show Me the Costs!

We are seeing a definite evolution in practice thinking and strategy. It used to be that most of our clients focused primarily on revenue generation. Now that it is becoming ever more difficult to negotiate significant contract rate increases and hospitals are becoming more resistant to increased subsidy payments, the discussion is shifting to the cost of providing the required level of care. The number one challenge for most of our clients now is finding ways to provide more care at a lower cost (while continuing to provide the highest quality of care to patients).

The past few years have seen the development of some new staffing models. This has been the result of opt-out states and the impact of national staffing organizations. We are also seeing an increased focus on provider productivity and OR utilization. The greatest challenge facing most practices today continues to be the need to recruit and retain enough qualified providers to meet the coverage requirements of the facilities they serve.

A Medical Brexit

Strategically, we are starting to see some interesting developments as isolated practices start to break away from the large entities they were once so eager to join. We have had a number of clients come back to us. For the past few years, many small and large practices have decided to join with a larger national staffing company. There has been an ample supply of venture capital money to make this an attractive option to an impressive list of practices across the country. There is no doubt that others will continue to pursue this option in the months and years ahead, but the bloom appears to be somewhat off the rose. Selling one's practice is definitely not the panacea one might have anticipated.

You're Unique

We have a saying in our business that if you have seen one anesthesia practice, you have seen one anesthesia practice. Our experience of the past year has demonstrated the validity of this observation in spades. While there are many general trends and issues facing all of our client groups, each is subject to its own specific challenges and issues. Accordingly, whenever we undertake a strategic assessment of a particular client, we are careful to take into consideration that client's unique set of circumstances.

We have enjoyed learning and adapting to the nuances of each of our client groups this year, and we will continue to take that approach in 2020. Whatever challenges and opportunities arise in the new year, we will be there to help bring insight, direction and success.