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Winter 2014

Disruptive Change, Anesthesiologists, and ASCs

William Hass, MD, MBA
Co-Founder, PhySynergy, LLC, Huntsville, AL

The current upheaval in the business of anesthesia has been previously reviewed in various issues of the Communiqué. While complex forces are involved in these changes, one aspect of practice management is vitally important for both individual anesthesia professionals and their anesthesia services: disruptive change.1

Disruptive innovation occurs when processes are improved and adopters of these new processes have operational and financial advantages over their competitors. Disruptive innovation is most likely to start in service niches rather than engulf an entire industry. Anesthesia professionals in ambulatory surgery centers (ASCs) are most likely to undergo disruptive innovation.

Why will these changes occur in ASCs?

  • With increasing out-of-pocket expenses, patients are going to be more cost conscious than ever before.
  • Demands from patients, referral sources, and insurers will require ASCs to provide high quality services at the lowest possible costs to survive.
  • ASCs are fertile ground for disruptive change because their lower acuity cases and healthier patients offer opportunities for staffing and technological innovations.

In case you haven’t noticed, your patients, potential patients, your referring physicians, and facility administrators are already shopping for lower price services…. including anesthesia services. ASC services are in the crosshairs of this new reality.

So, what’s the disruptive innovation in ASC anesthesia services going to be? Given that staff expense is the largest expense in anesthesia services, change will almost certainly be focused in this area. Will there be a chain reaction where more expensive anesthesia professionals are replaced by those less expensive who are then in turn replaced by technology and even less expensive ancillary staff? More simply, is the plan to replace expensive anesthesiologists with less expensive anesthesia professionals who are then replaced by robots, other technology, or maybe even trained amateurs? Don’t for a second think that someone hasn’t thought of this already.

The viability and utility of anesthesia services provided with a combination of anesthesia professionals has been proven over time. These combined services constitute the majority of anesthesia services in the United States and this format is growing. Fortunately, the concept has survived despite some extraordinarily poor implementations in:

  • Anesthesia Care Teams (ACTs),
  • Collaborative practices and variants,
  • Anesthesiologist-only practices,and
  • CRNA-only practices

Anesthesia services with poorly executed staffing plans will continue to fail because they recruit and retain the wrong people. The disruptive innovation in anesthesia services is the development and use of aggressive human resource management (HRM). Anesthesia services fail or underperform when they are unable to recruit and retain the right people in the right places at the right time with the right leadership to have effective teamwork. Effective HRM will remedy this problem. Just slapping some anesthesia professionals together is no more likely to provide a high functioning team than picking random people off the street. An especially troubling situation occurs when an anesthesia management company takes over an anesthesia practice, especially an all-anesthesiologist practice, and tries to institute an ACT model using the existing anesthesiologists who have never worked with CRNAs. And they double down on this error by recruiting CRNAs with little or no input from local staff. This “team” is a recipe for underperformance or even outright failure.

What about actual disruptive technologies? We haven’t seen them yet, but it doesn’t mean that they are not out there someplace, possibly in a garage in Palo Alto or in a business park in Alabama. When the killer app, program or device appears, it may spread very rapidly. Think iPod, iPhone and iPad. It is easier to adopt a new physical device than an idea, but it takes the right staff to adopt anything.

There is another caution for anesthesia professionals working in ASCs, particularly those that are owned by physicians or for-profit corporations. These entrepreneurial organizations embrace new ideas and will expect a similar attitude from their anesthesia service partners. These organizations may also be technophiles and will anticipate reasonable efforts to incorporate technology that will improve care and financial performance. In services focused on performance improvement through innovation, laggards need not apply and will certainly not be retained for very long.

It’s important not to confuse cost and price. There is an old management saying, “Beware the cost of the lowest price.” A mediocre clinical service in an ASC would be a costly mistake. In an era of social media and patient satisfaction surveys, missteps are amplified and publicized. An innovation might have a lower price tag for a while, but its success or failure will depend on its true cost to the ASC in the long run.

So, what does this mean for ASCs and anesthesiologists? Some anesthesia professionals may not be suitable for the ASC and/or the ACT environment. Some future combinations of anesthesia professionals and technology will be far different from the models of today. Local conditions, payer requirements, and governmental regulations will determine the exact composition of the anesthesia staffs for any ASC. All other things being equal, an anesthesia service making aggressive use of HRM and technology will be the safest and most economical facility in any locale. With the right people properly led, almost anything is possible.

1Hicks MR. Disruption and the Theory of the Anesthesia Business. The Communiqué (Winter 2013). article/45-winter-2013/582-disruption-and-the-theory-ofthe- anesthesia-business, accessed January 3, 2014.

William Hass, MD, MBA has been actively involved in anesthesia practice management for more than thirty years. He currently is the medical service organization (MSO) evangelist for PhySynergy, an MSO based in Huntsville, Alabama. PhySynergy executives had more than 100 years cumulative service in anesthesia service management. Dr. Hass is also the medical director for the Madison Surgery Center in Madison, Alabama. He can be reached at