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Fall 2014

Anesthesia Practice Attributes Your Hospital Leadership Teams Value Most

Patrick C. Everett, CPA, CMPE
Founder and President, ProSTAT Anesthesia Advisors, Alpharetta, GA

Since establishing ProSTAT in 1995, I have had the pleasure of working for more than 325 hospitals/health systems, physician-owned and Certified Registered Nurse Anesthetist (CRNA)-owned anesthesia practices, academic medical centers and related anesthesia businesses in 46 states and the District of Columbia.

My consulting business has evolved over the years from an exclusive focus on anesthesia group practice to one that now include hospitals and health systems (just over 150 at last count). That evolution has helped me better understand the viewpoints and value structure of hospital leaders as I spend time in their offices now discussing anesthesia challenges, solutions and strategies for the future with their perspective in mind. It is the substance of those detailed discussions that I hope to share with you in this article.

Five to ten years ago, I feel safe in saying, many (though not all) anesthesia practices didn’t place a top priority on what hospital leaders (and surgeons, for that matter) wanted from their anesthesia provider. Patient care and safety and practice management topics filled the agendas of most anesthesia group meetings I attended. If you were an anesthesia stakeholder prior to 2007, you probably recall when it was a constant struggle to both recruit and retain anesthesiologists and anesthetists. Many wise hospital leaders at the time, understanding the great value of a strong anesthesia department, were very hesitant to push their group toward service improvements because those informed leaders knew there were better paying or better lifestyle anesthesia jobs available, often just down the street at a competing hospital or surgery center.

But viewing the anesthesia specialty through the lens of today’s much changed patient care, service and business environment, the facility-contracting leverage enjoyed by even small private practices has been deeply eroded, although certainly not eliminated. With anesthesia residents, CRNAs and Anesthesiologist Assistants (AAs) being trained in greater numbers, combined with a much slower hiring trend since 2009 and a growing number of anesthesia management companies (AMCs) and expansion-minded private practices offering their services to hospitals, the picture looks very different.

Despite the greater range of options in the market, I find that the overwhelming majority of hospital/health system leaders I encounter are not actively seeking a replacement for their incumbent anesthesia group. Instead, they are looking for ways to better partner with their anesthesiologists and anesthetists to achieve the overarching goal of better care at a more affordable price, albeit on more aggressive terms than in the past.

The secret to keeping those hospital leaders in a “partner,” not “adversary,” frame of mind is to develop an anesthesia service that not only provides topnotch clinical care, but that is viewed by your stakeholders as one that is indispensable to the institution. In fact, your goal as it relates to these stakeholders—hospital administrators, OR nursing staff and your surgeons—is to create uncertainty and perhaps even a level of anxiety about the prospect that your group might not be there tomorrow. In my many one-on-one interviews with hospital/health system leaders, I always make it a point to ask what anesthesia-related concern keeps them up at night. Those who have a high regard for their anesthesia team often cite the possible loss of their group when I pose that question.

Following is a discussion of the Top 5 attributes of these very highly regarded groups who have greatly, though not totally, insulated themselves from the external market forces that exist today.

1. Strong leadership in terms of a single voice speaking for the group with the proven ability to effect change and ensure buy-in by all group members. Any anesthesia group president, chairman or clinical chief who has served as the primary liaison with hospital leaders has experienced the incredible pressure to respond to allegations about the group’s and individual member’s flaws and/or transgressions, and promise immediate action to rectify the problem. Each time an anesthesia group leader listens to this kind of criticism but responds, “I need to take this back to my group first,” her personal credibility and the value of her group in the eyes of the hospital leadership undoubtedly suffers to some degree. A hospital client of mine in the Midwest went through that back-and-forth constantly with the president of the contracted group. He expressed to me his frustration that the group president either took weeks and sometimes months to get back with a solution to the problem, or the matter was more often than not simply forgotten. As of this writing, that private practice group is being viewed as a strong candidate for health system employment, and there are plans to hire an anesthesiologist from the outside to be the new department head.

A hospital in the Northeast hired my firm about two years ago to evaluate their contracted anesthesia care team group and help that group develop a cost saving strategy to slowly reduce the annual support payment. The plan I developed was presented to both the hospital and anesthesia group leadership teams, and both initially agreed to support the plan, with the hospital committing to further support the group financially if the plan’s implementation resulted in significant attrition of clinicians (it didn’t). But after six months the anesthesiologists had not implemented any suggestions because of an inability to make decisions, coupled with threats by some members of the Board of Directors to quit if certain suggested measures were initiated. When the hospital contacted four national staffing companies to obtain bids for the contract, however, the majority of the anesthesia group shareholders were jarred enough to vote to replace their Board and empower the newly-elected members to “act in the best long term survival interest of the group” without having to obtain the previously necessary 100 percent of group membership support. As a result of a series of wise decisions by that new Board, the contract was renewed for three years with far less damaging financial ramifications for the group than were initially envisioned.

2. An ability to police/discipline bad actors proactively. When groups are quick to recognize physician or anesthetist clinical practices or behavior that are detrimental to the practice’s reputation and credibility, and to initiate corrective action before the hospital leaders bring up the concern, they are viewed in a far more positive light than those groups who visibly resist terminating bad actors because “they are a good doctor” or “they are a good anesthetist.” Dr. Alan Rosenstein’s 2011 research with medical professionals (published in the American Journal of Medical Quality) found a very strong correlation between disruptive behavior and medical errors (resulting in compromised patient safety—51 percent, adverse events—67 percent, compromised quality—71 percent). So while strong clinical skills are highly coveted attributes, the environment in which those skills are deployed cannot be toxic, or the patients, hospital personnel and ultimately the institution itself is at risk.

3. An accommodating philosophy toward surgeons and their desires to work at their (reasonable) convenience. In nearly every institution I visit today, I hear varying levels of frustration voiced by anesthesiologists (and often hospital leaders) about the inefficiencies for anesthesia and nursing personnel created from a far greater emphasis on providing surgeons with easy access to operating rooms at times convenient to them. Granted, more hospitals today are coming to understand that over-accommodating surgeons is not always good business for their organization or the anesthesia group, but offering an inviting environment to surgeons is critical to their market share growth objectives, and that is an unmistakable priority for every hospital leadership team. The best barometer I can think of that alerts you that the anesthesia accommodation level is below where it ought to be is when the reasonable and rational surgeons on your medical staff begin lodging frequent complaints with you or the hospital about the anesthesia availability or service.

4. A willingness by the anesthesia practice to apply clinical standards and protocols to patients consistently as a single group, not as individual clinicians. The confusion and frustration that arises among nurses and surgeons when anesthesiologists and anesthetists in the same group diverge widely on their assessment of a patient or their approach to care is one of the more common complaints I hear in my consulting engagements. Of course, the clinician’s perspective is frequently that one’s clinical judgment in a patient’s plan of care is sacrosanct and cannot be compromised under any circumstances. While reasonable hospital leadership understands this perspective, most will still want to explore areas for compromise. Unfortunately, some anesthesia groups make the mistake of pointing out that “surgeons don’t have to always follow standardization in the way they operate.” I am told that these kinds of comments undermine the professional stature of the anesthesia group in the eyes of hospital leadership, and astute anesthesia groups (and astute surgeons) already understand that the day is coming in the not-too-distant future when surgeons will have fewer and fewer preferences they can request if they veer outside the standard without adding value commensurate with cost.

5. A priority for all members of an anesthesia group to act as positive ambassadors, not only for their group and medical staff, but for the facility where they practice. Most hospitals consider their anesthesia team as one of many strategic advantages they reference when recruiting surgeons and marketing their facility to patients, employers and community leaders. When hospital administrators find themselves too frequently apologizing for the negative acts, omissions or behaviors of the anesthesia organization, the whole group ceases to be viewed as an asset and instead can be very quickly viewed as a liability that requires fixing through some concrete action (RFPs, employment, stipend reductions, etc.). I saw this “positive ambassadorship” expectation fully tested some years ago when the lead anesthesiologist, when confronted, readily admitted she had told members of her church and country club to drive the extra 60 minutes to a larger hospital up the Interstate for their elective surgery because the care at the local hospital where her group held the contract was “unsafe.”

In addition to these five, there are a number of desirable characteristics of anesthesia groups that may get less press, but that are still very important:

  • Transparency/good faith when contractual fair market value and financial support is determined
  • Compensation systems that allow the hospital and anesthesia group to align incentives
  • Active involvement and leadership on important hospital committees
  • An open mind to technology solutions for care delivery challenges
  • Staffing models that make care delivery and economic sense in today’s environment
  • A group that contracts with all major governmental and commercial payers

But more than anything, incisive hospital leaders I know want a group of anesthesia professionals who “fly under the radar” and about whom they rarely hear complaints, so when they sign that monthly or quarterly financial support check they are smiling, not cursing.

Patrick C. Everett, CPA, CMPE is a nationally-recognized independent consultant who focuses exclusively on all business aspects of the anesthesiology specialty. After careers with an international accounting firm and a practice administrator position with a large care team private anesthesia group in Atlanta, he founded ProSTAT Anesthesia Advisors, celebrating the firm’s 20th year in business in 2015. He can be reached by email at