Performance-Based Compensation in Contracts between Hospitals and Anesthesia Groups: Measures


January 30, 2012


Contracts between hospitals and anesthesia groups frequently include provisions for compensation for the anesthesiologists’ services to their institutions.  Estimates by speakers at this past weekend’s ASA Practice Management Conference ranged from 70 to 81 percent of anesthesia groups receiving payments from their hospitals.  The amount of compensation varies widely, depending on different factors such as payer and patient mix, size of the group, subspecialization, number of other anesthesia groups in the geographic area, salary costs, OR utilization rates and number and spread of anesthetizing locations outside the OR. 

The classic payment arrangement makes the anesthesiologists whole for low receipts for clinical services provided to the hospital’s patients.  Public health plans, e.g., Medicare and Medicaid, generally pay a good deal less for anesthesia services than do private payers – some two-thirds less, in the case of Medicare.  Public hospitals also have a certain proportion of non-paying patients.  In order to obtain sufficient coverage for all patients, especially in areas where there is a shortage of anesthesiologists and/or nurse anesthetists, hospitals may need to make up the shortfall.

Other traditional services for which hospitals compensate anesthesiologists directly or indirectly include medical director services and 24/7 labor epidural coverage.

More recently, hospital and ambulatory surgical center contracts have begun stipulating performance goals for their anesthesia groups, in terms of quality, efficiency or both.  Some of these goals are familiar and relatively modest, and do not entail any numerical measurement.  At the other end of the spectrum, anesthesiologists accept the responsibility and the risk of certain outcomes, positive and negative, and agree to dollar withholds that will be payable only upon attainment of a set level of achievement.  The objective is to align the anesthesia group’s goals with those of the hospital or surgery center.

We review below types and sources of performance measures that might be included in anesthesia contracts.  There are three basic categories of performance measures commonly found in anesthesia contracts or departmental policies:  (1) clinical quality, (2) efficiency and (3) customer satisfaction.

1. Clinical Quality Measures

The most widely known of the clinical quality measures for anesthesiology come from the CDC-CMS-VA-AHA-ACS-ASA (and other parties) Surgical Care Improvement Project (SCIP).  The SCIP measures have been in use for the better part of the last decade.  Most hospitals are already tracking and reporting on the SCIP measures, including the measures that depend on actions of the anesthesiologists. 


SCIP-Inf-1Prophylactic Antibiotic Received Within One Hour Prior to Surgical Incision
SCIP-Inf-2Prophylactic Antibiotic Selection for Surgical Patients
SCIP-Inf-3Prophylactic Antibiotics Discontinued Within 24 Hours After Surgery End Time–(48 hours for CABG and Other Cardiac Surgery
SCIP-Inf-4Cardiac Surgery Patients With Controlled 6 A.M. Postoperative Blood Glucose
SCIP-Inf-6Surgery Patients with Appropriate Hair Removal
SCIP-Inf-9Urinary catheter removed on Postoperative Day 1 (POD 1) or Postoperative Day 2 (POD 2) with day of surgery being day zero
SCIP-Inf-10Surgery Patients with Perioperative Temperature Management
SCIP-Card-2Surgery Patients on Beta-Blocker Therapy Prior to Arrival Who Received a Beta-Blocker During the Perioperative Period
SCIP-VTE-1Surgery Patients with Recommended Venous Thromboembolism Prophylaxis Ordered
SCIP-VTE-1Surgery Patients Who Received Appropriate Venous Thromboembolism Prophylaxis Within 24 Hours Prior to Surgery to 24 Hours After Surgery


Physician Quality Reporting System (PQRS)

The PQRS measures are the physician analog of the perioperative SCIP measures, essentially.  The SCIP measures are reported by hospitals; PQRS measures are reported on Medicare claims for physicians’ professional services.  The advantage of explicitly using the PQRS measures in an arrangement under which the hospital pays the anesthesia group for performance is the group’s control over tracking and reporting.  Furthermore, when physicians’ PQRS scores are publicly reported in the not too distant future, anesthesiologists will want to be able to rely on their own performance record, having determined the numerators and denominators themselves.

PQRS 30Perioperative Care: Timely Administration of Prophylactic Parenteral Antibiotics
PQRS 76Prevention of Catheter-Related Bloodstream Infections (CRBSI): Central Venous Catheter (CVC) Insertion Protocol
PQRS 193Perioperative Temperature Management


ASA – Critical Incidents

In anesthesiology, one important aspect of “quality” is the non-occurrence of adverse clinical events associated with the anesthetic.  In its August 2009 Report to the ASA Board of Directors, the Committee on Performance and Outcomes Management reported on the “development of a set of measures to be included in a planned registry of perioperative events that may be used to assess patterns of quality.”  The 26 indicators identified by the Committee are:

  1. Death
  2. Cardiac arrest
  3. Perioperative myocardial infarction
  4. Anaphylaxis
  5. Malignant hyperthermia
  6. Transfusion reaction
  7. Stroke, cerebral vascular accident, or coma following anesthesia
  8. Visual loss
  9. Operation on incorrect site
  10. Operation on incorrect patient
  11. Medication error
  12. Unplanned ICU admission
  13. Intraoperative awareness
  14. Unrecognized difficult airway
  15. Reintubation
  16. Dental trauma
  17. Perioperative aspiration
  18. Vascular access complication, including vascular injury or pneumothorax
  19. Pneumothorax following attempted vascular access or regional anesthesia
  20. Infection following epidural or spinal anesthesia
  21. Epidural hematoma following spinal or epidural anesthesia
  22. High spinal
  23. Postdural puncture headache
  24. Major systemic local anesthetic toxicity
  25. Peripheral neurologic deficit following regional anesthesia
  26. Infection following peripheral nerve block

Readers are referred to the original Committee report, available on the ASA web site ( or on the Anesthesia Quality Institute web site ( for definitions.

2. Efficiency

Anesthesiology as a specialty has long been involved in leveraging its constant presence to manage the OR and to improve its efficiency.  Some of the activities that the anesthesia department — typically through a medical director of the OR — can control and measure include:

  • Percentage of surgical patients evaluated by 6:00 a.m. (7:00 a.m.) on day of surgery
  • Percentage of patient assessments completed within 30 minutes prior to first case start
  • Percentage of on-time starts
  • Percentage of day of surgery case cancellations attributable to anesthesia
  • Percentage of add-on cases performed
  • Percentage of anesthesia preop forms with documentation (medical history, current medications, allergies, physical exam findings)
  • Room turnover time
  • Use of hospital medication dispensing system to ensure appropriate charge capture
  • Prolonged PACU stay attributable to anesthesia

3. Customer Satisfaction

Customer satisfaction, explicitly quantified, has come to play a far greater in health care over the last decade or so.  In some pay-for-performance systems, patient satisfaction accounts for 20–30 percent of the total score on which a physician’s bonus is based.

The surgeon as well as the patient are the primary customers from whom the anesthesia group must receive good scores in order to satisfy its secondary customer, the hospital or surgery center.

  • Surgeon satisfaction (surveys)
  • Patient satisfaction (surveys)
    • Press-Ganey:
    • Friendliness of anesthesiologist
    • Explanation of procedure by anesthesia staff
    • Overall anesthesia experience
    • Hospital Consumer Assessment of Healthcare Providers and Systems   (HCAHPS):
    • percentage of patients reporting that their pain was “always” well controlled
    • ”During this hospital stay, did your doctor clearly communicate the anesthesia options?”
    • Percentage of patients who would recommend this hospital to their friends based on the anesthesia care received
    • AQI:
    • “How satisfied were you with your anesthetic care?”
    • “Did you experience any unexpected events related to your procedure or the anesthetic?”

4. Other

  • Peripheral nerve deficit within 48 hours of anesthetic care
  • ICU length of stay
  • Response to request for labor epidural insertion within x number of minutes during certain hours
  • Immediate availability for “return to the OR cases”
  • Compliance with blood product utilization protocols
  • Percentage of postoperative inpatients seen within x hours of surgery
  • PONV
  • Hypothermia in PACU
  • Hypotension in PACU
  • Unanticipated hospital admission
  • “Good citizenship” – participation in hospital/committee activities

The measures identified above give anesthesiologists — and hospitals — the opportunity to track numerous indicators within a variety of domains.  While it is unlikely that any single institution will seek reporting on all the measures, it is highly probably that there will be at least a few measures that will suit the needs of every hospital or ASC. It is important to tailor the measures to the particular anesthesia group, medical staff, OR capabilities and available information technology. An event that occurs either 100 percent or none of the time, for instance, is not worth recording. There should be a purpose behind every measure selected – and a reassessment after a certain amount of experience of the continuing relevance of the measure.

Performance-based compensation requires more than simply the reporting of quality measures.  There must be a baseline against which changes in outcome can be benchmarked.  The financial incentive can be tied to a single level of achievement, or it can be based on a potential range of performance rates for each measure.  Again, it is important that the linkages remain meaningful and that the anesthesiologists and the hospital administration have confidence in the entire process.

In next week’s Alert, we will expand on the issues of benchmarking, monitoring and improving performance.

With best wishes,

Tony Mira
President and CEO