April 27, 2009

We are all data-maniacs. Very few decisions in anesthesia practice are made without someone asking, “Where are the data?” In contract negotiations with hospitals or with health plans, anesthesiologists and their business representatives are used to arming themselves with cost, revenue and utilization numbers (at the top of a long list). In managing groups and planning for their future, information on demand for service and anesthesiologist/CRNA workforce come into play. In performance measurement, it’s all about what you evaluate and how you quantify processes or outcomes that show room for improvement and that can be measured credibly.

Local data are the most relevant, starting with those generated by and for your own practice. For both internal management decisions and for negotiations with your hospitals, surgery centers and payers, you should have at the ready such data as:

• Payer mix
• Case mix
• Net (and gross) collection amounts and ratios 
• Actual and expected collections
• Bad debt
• Days in A/R
• Average base and average time units billed per case
• Utilization rates and other productivity measures (at the individual clinician and operating room level)

Your practice manager or billing company should be able to pull up this type of information with ease. (ABC’s regular and custom client reports contain many additional metrics.)

In negotiating for payments from hospitals, as well as in determining the appropriate staffing and OR coverage, you should also obtain the facilities’ payer and case mixes and financial information, which may be requested in the negotiation process or which may be a matter of public record. You may even find valuable data – for example, case mix – in the patient-outreach communications published by many health systems and hospitals.

For benchmarking purposes, local comparative anesthesia, physician and hospital data are frequently difficult to locate. Since that is true across the board, national data become more relevant. In anesthesia practice management, there are no national or regional data sources more comprehensive than those of the Medical Group Management Association–Anesthesia Administration Assembly. The MGMA-AAA is currently fielding the 2009 version of its Cost Survey for Anesthesia Practices. The deadline for responses is coming up very quickly – midnight on May 1st – and if you haven’t completed yours, we strongly encourage you to go to http://www6.MGMA.com and do so. (ABC is working with our clients to submit their information.) The Anesthesia Cost Survey will produce data on key variables including:

• Total units per FTE physician
• Cases per anesthetizing location
• Total medical revenue per FTE physician
• Payer mix
• Case mix
• Clinical and nonclinical support staff costs
• Anesthesiologist, nurse anesthetist and other provider cost
• Anesthesia and other procedure per FTE physician/per FTE provider
• Gross charges per physician, per anesthetizing location, per case

and many more variables. Note that MGMA continually conducts other surveys, too. Among the reports of interest to our readers are the Academic Compensation and Production Survey, Physician Compensation Surveys, and more topical reports such as the 2009 Medical Directorship and On-Call Compensation Survey. Despite survey samples that tend to be on the small side – leveraged through sophisticated and well-explained statistical analysis -- practice managers refer to MGMA survey reports nearly every day to help develop budgets and business plans, facilitate organizational change, launch strategic initiatives and illustrate organizational performance.

Each month’s issue of Anesthesia & Analgesia contains a section on “Economics, Education and Policy.” Many articles published in this section offer credible, specialty-specific data, e.g., the fact that “academic anesthesia departments in the U.S. receive an average of $95,000 in institutional support (Tremper KK, Shanks A, Morris M, Five-Year Follow-Up on the Work Force and Finances of United States Anesthesiology Training Programs. Anesth. Analg., Apr 2007; 104: 863 – 868). The website, www.anesthesia-analgesia.org, is searchable by author, key words, year or volume, and it also permits browsing current, past, and future issues. All 336 (through May 1, 2009) articles on economics and health care research topics are listed under “Collections.”)

Another source of anesthesiology data is, of course, the American Society of Anesthesiologists and its website, www.ASAhq.org. Over the years, the ASA Newsletter has published a wealth of articles written by specialty leaders, committees, staff, outside consultants, AAA members and others. Most recently, the March 2009 Practice Management column reviewed preliminary results from an independent anesthesia workforce study conducted by the RAND Corporation. The study revealed a current anesthesiologist shortage of either 8,406 FTE anesthesiologists, using a demand-based analysis of data from a 2007 survey of anesthesiologists, nurse anesthetists and anesthesiology department directors, or a shortage of 4,655 anesthesiologists using an economic analysis. One number is nearly double the other but both indicate a real shortage. Both numbers assumed a 40-hour workweek, as did the corresponding estimates for the nurse anesthetist workforce. Survey responses demonstrated that the average anesthesiologist has a clinical work week of 49 hours, compared to the CRNA’s average clinical work week of 37 hours, however.

The RAND study, as described in the ASA Newsletter, is a good illustration of how the data in a research report may answer questions that are tangential to the report’s title (“An Analysis of the Labor Markets for Anesthesiology”). Unearthing comparative or other third-party data often requires a good deal of creativity (at least in making sure that the data you find are meaningful; see below). Fortunately, such data are less critical to a practice’s management or contract negotiations than are the financial and production numbers generated within the practice. They may be important in strategic planning, though -- and they are indispensable to the academic papers and speeches presented by the many anesthesiologists, nurse anesthetists and administrators who publish or who appear in front of conference audiences.

For those researchers and presenters, we offer a few additional thoughts on source material. Socioeconomic studies also appear occasionally in Anesthesiology, in the Journal of the American Medical Association and in the New England Journal of Medicine. State and national medical and hospital association websites yield the occasional gem of a white paper.

With health care accounting for about 16.6% of GDP in 2008, according to the Centers for Medicare and Medicaid Services (CMS), it is not surprising that the federal government offers an enormous quantity and variety of information on health care utilization and spending. Under the topic “Research, Statistics, Data & Systems” on www.cms.hhs.gov we find the following hyperlinked reports:

Statistics, Trends & Reports

• Active Projects Report 
• Capital Market Updates 
• Chart Series 
• Chief Financial Officer (CFO) Report 
• Data Compendium 
• EDI Performance Statistics 
• Health Plans, Reports, Files and Data 
• Medicaid Disproportionate Share Hospital (DSH) Reports 
• Medicare Advantage/Part D Contract and Enrollment Data 
• Medicare Enrollment Reports 
• Medicare Fee-For-Service Statistics 
• Medicare & Medicaid Statistical Supplement 
• Medicare & Medicaid Trends in Health Care Sectors 
• Medicare Program Rates & Statistics 
• National Health Expenditure Data

The Department of Health and Human Services is not the only federal government agency that produces data of interest. The IRS, for example, undertook a study of nonprofit hospitals and community benefit beginning in 2006 and has just published the final results in a 190-page report with the scintillating title “IRS Exempt Organizations (TE/GE) Hospital Compliance Project Final Report,” www.irs.gov/pub/irs-tege/toc_linked_hospprojrept.pdf. The report’s information on uncompensated care could be pertinent in stipend negotiations with a hospital that expects your group to provide “your share” of uncompensated services (overall, 58% of hospitals reported uncompensated care amounts less than or equal to 5% of total revenues. The average and median percentages of total revenues reported as spent on uncompensated care were 7% and 4% respectively, but such spending was distributed unevenly among the 485 hospitals in the study).

Secondary data in the IRS nonprofit hospital study included:

• payer mix, with a decrease in private insurance coverage from 46% to 43% between 2006 and 2009 and a concomitant increase in public (Medicare [31%], Medicaid, etc.) coverage and the proportion of uninsured patients;
• 79% of all hospitals reported excess revenues (total revenues exceeding total expenses). Excess revenue as a percentage of total revenue ranged from 3.3% for the 85 smallest hospitals to 5.5% for the 36 largest. 
• Average and median total compensation paid to the top hospital management official were $490,431 and $377,256, respectively.

This discussion of federal healthcare expenditure data would not be complete without a reference to the small but highly influential body that advises Congress on Medicare policy, the Medicare Payment Advisory Commission (www.medpac.gov) and, in particular, its annual Data Book and Report to Congress.

What about the private sector? Again, there are innumerable sources and no single definitive publisher of health care utilization and spending data. One paper that you might want to keep in your collection is the 2009 version of “Healthcare Trends in America” from the Blue Cross and Blue Shield Association (http://www.bcbs.com/blueresources/healthcare-trends-report/pdfs/2009-healthcare-trends-in-america.pdf). This 90-page report indicates that cumulative growth in health insurance premiums continues to outpace growth in earnings and inflation by about 4:1. It also contains a variety of data on two trends that are apt to affect anesthesiology practices:

1. High-deductible health plans with savings options, e.g. health savings accounts: these insurance plans shift some of the cost of care to the patients and it has traditionally been more difficult for anesthesiologists to collect patients’ co-payments that insurance allowables. While PPO plans remain dominant in employer-provided insurance, high-deductible plans are becoming more popular, as well they might, since annual premiums are about $1600 less per employee.

2. Medical tourism: two out of every five consumers would consider traveling abroad for an elective procedure for a 50% savings on out-of-pocket costs. Only 3 percent of consumers have already done so. As individuals confront increasing costs, anesthesiologists and their hospitals may find themselves competing not just with other facilities in the immediate geographic area. More patients may start seeking surgical and perioperative care in Singapore, India and other countries. The Blue Cross/Blue Shield study further found the consumers who would consider traveling abroad tend to be younger, healthier, male and commercially insured.

There are data to be found, within one’s practice, in the literature (peer-reviewed and other), in government studies and on health insurers’ or provider organizations’ websites. It is easy to find too much rather than too little information, although the refrain “But there are no data” is almost as common as the question, “Where do you find the data?” The key is to interpret what you find correctly. Understand the methodology behind and the limitations of the information. If the information is being used in negotiations, understand the limitations of the data put forward by the other side as well.

We hope that you find this discussion informative, and again, we encourage you to complete the MGMA-AAA Cost Survey of Anesthesia Practices.