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Summer 2015

Anesthesia Practices Are Not Islands

“No man is an island, entire of itself; every man is a piece of the continent, a part of the main” begins John Donne’s famous poem. Anesthesiologists have come to realize that not only are they “a piece of the continent” that is their group, but that they are interdependent on their hospital or health system. The anesthesiologist’s and the group’s well-being is bound up with that of their institution, and perhaps with the health and welfare of other entities as well.

The hospital “continent” is under enormous pressure to improve quality and to hold down costs, and so, therefore, is the “country” that is the anesthesia department. If the incumbent anesthesia groups are not properly managing their costs and quality, the chances are that their hospitals are looking for alternatives. ABC Vice President Jody Locke’s latest article for the Communiqué, Why Utilization and Productivity Metrics Matter, walks readers through the variety of metrics available to practices that want to measure and demonstrate their value to their hospital partners. The immediate goals are to develop data that lead to more efficient coverage models in terms of both staff and operating room utilization and to identification of best practices—including productivity— among the providers. As Mr. Locke writes, “Those who have come to understand the importance of being lean and effective are gaining market share while those that refuse to accept the inevitable are losing ground and losing their franchises. Effectiveness and efficiency are the new keys to success.” The overarching goal is to produce the lean, cost-effective and high-quality anesthesia service demanded of the hospital’s anesthesia partners.

Groups can form bigger islands, or even continents of their own, by growing. Mergers and acquisitions are the more popular and certainly the more immediate strategy, but organic growth is often feasible as well, as Mark Weiss, Esq. writes in Anesthesia Group Mergers, Acquisitions and (Importantly) Alternatives—and it entails becoming a more valuable component of the hospital continent or family. Cement your current facility relationships, explore opportunities to expand the practice to additional facilities and tighten up the group’s internal operations. Other alternatives to being acquired by a larger entity include acquiring another group, creating a cooperative arrangement with other practices or launching a Management Services Organization (MSO), or even offering a practice management or locums service.

“Even if you’re committed to seeking a buyer,” states Mr. Weiss, “you can’t stop or even slow your efforts to develop your business while you’re searching.” Bill Britton of Cross Keys Capital elaborates on this point in How an Investment Banker Can Make an Anesthesia Practice That Wants to Sell Become a More Attractive Acquisition Partner. As we know, some groups are solving the dilemma of small size and limited resources by seeking out venture capital. In his article, Mr. Britton identifies seven areas that buyers of anesthesia practices focus on, starting, not surprisingly, with corporate governance and leadership. The characteristics that make a group an attractive target are also the characteristics that make it successful. The investment banker’s perspective is one that everyone should consider.

Did you miss the death story of the Medicare Sustainable Growth Rate (SGR) formula? Attorneys Serene Zeni, Gregory Moore and Alexandra Hall explain its history and the legislation that killed the SGR, as well as what comes next, in The SGR “Fix” in the Context of Anesthesia Practice.

As health plan co-insurance and deductible amounts continue to grow, so do the challenges of collecting. “Self-pay” used to refer primarily to uninsured patients. As Neda Ryan, Esq. and Christopher Ryan, Esq. explain in Getting Paid by the Self-Pay Patient, the term now applies, too, to patients with high deductibles. Obtaining compensation from these individuals often depends on having in place the necessary policies and protocols, which are summarized in the article.

Has Someone Gotten in Trouble for Doing That? asks Vicky Mykowiac, Esq. Yes, someone has, and Ms. Mykowiac explains various problematic activities that gave rise to civil and criminal fraud actions with Lessons for Anesthesia Groups from Real Cases and lessons learned. One specific area of interest on the part of the federal government is physician compensation that may implicate the anti-kickback statute. ABC Vice President Joette Derricks reviews recent fraud alerts in Is the Office of the Inspector General Turning its Attention to Physician Issues?

We are well into the second half of 2015 and it seems that the anesthesia practice management news cycle is running faster than ever. Groups continue to morph and consolidate, as do health systems and, more recently, even large health plans. We hope that our publications continue to provide a useful service in helping our readers navigate these many changes.

With best wishes,

Tony Mira
President and CEO