December 7, 2009

When anesthesiologists from different groups, or their practice administrators, get together, it does not usually take long before they begin comparing practice benchmarks. Committee meetings, listservs and other encounters allow the participants to ask questions such as:

1. Do you use CRNAs? How many? Do you employ them, or does the hospital?
2. Do you receive a stipend from the hospital, and what does it cover?
3. How many cases do your anesthesiologists perform?
4. What are your salaries like?

The best resource for practice financial, staffing and productivity data is the Cost Survey for Anesthesia and Pain Management Practices published by the Medical Group Management Association (MGMA). The 2009 Report Based on 2008 Data contains information from 127 practices across the country, in two-thirds of which an administrator spent at least 5 hours answering some 200 questions. If you are not familiar with the Anesthesia Cost Survey, we hope that this Alert will provide an adequate introduction. There is no more comprehensive or authoritative source of anesthesia practice management data. The rigor of the statistical analysis makes the data reliable for many business purposes.

Following are answers to the four questions above drawn from the Anesthesia Cost Survey. Some of these answers are more direct and definitive than others.

1. Across all respondents in anesthesia practices that provide no pain medicine services, the mean number of “nonphysician providers” (i.e. CRNAs or AAs) per FTE physician is 1.40. One-quarter have no nonphysician providers. In practices with more than 1 nonphysician provider per FTE physician, the median ratio of employed CRNAs/AAs per physician is 1:70. Of the 50 respondents reporting at least some use of CRNAs, 48 respondents employ the nurses and 21 contract with them, showing that many practices use both employed and independent contractor CRNAs. There is no breakdown by group- as opposed to hospital-employed nurses.
    
2. Nearly 96 percent of a total of 73 groups answering the question receive a stipend from one or more of the hospitals they cover; 1.37 percent receive stipends from more than 5 hospitals. The stipends compensate groups for various activities including medical director services (16.4%), trauma (15.8%), OB (15.3%) and cardiac (11.5%), as well as physician salaries (11.5%) and CRNA salaries (9.3%). The stipend amounts vary considerably: the average total value of stipends per anesthetizing location is $79,863 with a standard deviation of $65,881. The average number of anesthetizing locations is nineteen.
    
3. The numbers of surgical and obstetrical anesthesia cases performed bear a linear relationship to the number of CRNAs and AAs per FTE anesthesiologist, not surprisingly. Pain procedures and other flat fee services track that relationship, probably because anesthesiologists leveraged by higher CRNA ratios are free to perform more procedures of all types.

click here to download chart

1. Mean anesthesiologist compensation is $399,405. Benefits cost another $58,699, for a total physician cost of $454,582 (per FTE physician). The mean total CRNA/AA cost per FTE physician is $233,861, which breaks down into mean compensation cost of $195,602 and mean total benefits of $39,093. The standard deviations are 25%-50% of these figures, and for physician costs the medians exceed the means. Nevertheless, the compensation figures are in line with salaries for anesthesiologist and CRNA positions advertised at www.gaswork.com.

Key findings identified by the report’s editors further illustrate the value of the survey. These include a variety of productivity metrics:

• Physician units
  • Per anesthetizing location
    • Total units – 9,939 (up from 8,774 in 2006, but down from the 10,084 reported for 2004)
    • Time units – 5,204
  • Per FTE physician
    • Total units – 10,902
    • Time units – 5,671
  • Per case
    • Physician only, median values: 6.01 base units; 101.64 minutes
    • 1 or more CRNAs/AAs per physician, median values: 5.87 base units; 87.56 minutes
• Operating room utilization percentage (average) at respondent’s largest hospital
  • Nearly 67% report a utilization ratio of 51% to 75%, up from just one-half of respondents in 2004. Sixty-eight percent believe that 51%-75% is a reasonable utilization ratio for a new OR.
  • More than 13% report a utilization ratio of 76% or greater
  • Utilization ratios are lower at ambulatory surgery centers (fewer than one-half of the practices report utilization percentages of 51% to 75%)
• Pain Management
• Total medical revenues and total physician costs decreased by 16.10% and 28.61%, respectively, from 2006 to 2008, while general operating cost increased by 21.41% and support staff cost by 9.82%.

One of the major strengths of the information reported is the fact that it has been normalized. Total revenues, stipends or numbers of cases are not very meaningful unless one also knows the size of the practice. Hence dollar and numerical amounts are presented as ratios, with FTE physicians, total medical revenues, ASA units, total procedures etc. in the denominator.

MGMA leverages the utility of a relatively small sample by displaying the data in separate sets of tables for “anesthesiology only,” “anesthesiology with pain management” and “pain management only.” Within “anesthesiology only” practices, the data are further broken down by the number of FTE physicians in the responding practices, by care team or physician-only staffing models, by payer mix and by number of trauma centers. Regrettably, all of the data are national and no regional information is available. Forty-four states divided roughly equally into Western, Midwestern, Southern and Eastern sections are represented in the national statistics, though.

Using the Cost Survey for Anesthesia and Pain Management Practices, physician executives, administrators and consultants can assess their groups’ competitiveness as well as determine areas for improved efficiency. Expert contract negotiators benchmark anesthesia productivity and income against the MGMA data and also use MGMA methods for analyzing their own practice information.

For matters that the Anesthesia Cost Survey, or published data from large databases or other surveys, does not address, there is another MGMA resource to which ABC staff contribute and from which we often benefit: the electronic discussion board, where hundreds of MGMA-Anesthesia Administration Assembly (AAA) members ask and answer each other’s questions. We continue to meet anesthesiologists and practice managers who are unfamiliar – or insufficiently familiar -- with the MGMA surveys and the AAA community, and that is why we bring these assets to the attention of all our readers.

With best wishes,

Tony Mira
President and CEO

Click here to download a PDF of this eAlert