Exploring Anesthesia Business Models

Turnkey Services

A good turnkey anesthesia provider should start their relationship with an ASC through an on-site consultation, Koch says.

Somnia representatives start with a meeting between experienced C-level and VP-level executives from the ASP, and administrative, executive and clinical personnel from the ASC. This meeting should focus on realistic goals, timelines and costs. An effective ASP also handles professional service billing, Koch says.

“Although outsourcing is common, an ASP that manages its own billing and collections is closer to problems and their solutions and more likely to expediently discern and solve problems with an eye on the bigger picture,” Koch says.

Turnkey anesthesia services are not for everyone, however.

“Facilities that have stable and stellar anesthesia coverage with limited or no anesthesia administrative issues and whose engagement agreement is viewed as fair by all parties are unlikely to achieve an incremental benefit that overcomes transition-related headaches,” Koch says.

The Future

Koch believes that as the number of ambulatory and office-based procedures increase, the overall volume per facility will see reductions. Fewer facilities will be able to afford self-sufficient anesthesia departments and they may have to be subsidized, he says.

In trying to predict industry growth, Wiener cites a 2008 ASC survey in which Deutsche Bank stated that volume growth will be soft, pricing growth may remain flat and that capacity continues to outstrip supply.

“They conclude that consolidation via M&A (mergers and acquisitions) activity will be an avenue for growth and efficiencies within existing ASCs and must be identified to sustain an ever-changing marketplace,” Wiener says. “The close collaboration between the anesthesia team and the ASC will aid in finding new efficiencies that will have significant impact on the financial and clinical success of the ASC.”

Creative relationships in the form of joint ventures have been increasing for several years, and equity buy-ins to the ASC from anesthesia groups are occurring, which creates better alignment of long-term interests for both parties, he says.

“There are even deals where an ASC and/or ASC physician groups are buying into certain APMCs,” Wiener adds. “Whichever way you look, the field is dynamic and I hope changing for the better. There is also a belief that the field of anesthesiology is becoming commoditized with the inherent ramifications. Some believe that the private practice of anesthesia will disappear in the next decade.”

Any way you dice it, a good anesthesiology team is imperative to safe and efficient operations. In fact, it is “definitely” a good idea to appoint your anesthesiologist as medical director, Dombrowski says.

He believes that anesthesiologists are very well balanced because they have a background in medicine as well as surgery, as opposed to a surgeon, who might be extremely knowledgeable about surgery but not so much about medicine, and an internist might know medicine very well but won’t know surgery.

“The anesthesiologist really straddles the fence between both worlds and can ask ‘Is this patient medically ready?’” Dombrowski says. “We’re on the launch pad, do we say go or not? Because if we say we’re not going, the case doesn’t get done and we cancel it. It’s in our benefit for safety and productivity and any sort of enhancement to the center for medical care that an anesthesiologist be integrally involved.

“We’re your guardian angel in the operating room. There’s no net at an ASC. You’re on a high wire with no net. There’s no ICU (intensive care unit), there’s no bypass.”

References:

www.asahq.org/aboutASA.htm

www.somniaanesthesiaservices.com