MGMA Report Reveals Anesthesiology Margin Grows as Staffing Levels Drop

ENGLEWOOD, Colo. -- Anesthesia-only practices appeared to cut costs where they could in 2004 and boosted their bottom line, according to the Medical Group Management Association (MGMA) “Cost Survey for Anesthesia Practices: 2005 Report Based on 2004 Data.”

Anesthesiology practices' margin (median total medical revenue after operating costs) grew 10.5 percent, from $403,029 in 2003 to $445,339 in 2004, despite a small increase in revenue. Median total medical revenue grew 2.6 percent, from $509,141 in 2003 to $522,575 in 2004. While anesthesia groups carry low overhead, the main source of savings appeared as a result of staffing reductions. Interestingly, observed groups reported lower levels of non-physician provider (NPP) staffing - from 13.50 per group in 2003 to 10.10 in 2004 - but 8 percent higher NPP costs.

"Anesthesiology has a shortage of physicians, so we pay a premium not only to recruit associate-level physicians but also established physicians and certified registered nurse anesthetists (CRNAs)," says Asa Lockhart, MD, MGMA survey operations adviser and principal of Golden Caduceus Consultants in Miami.

Since 2000, median compensation for CRNAs has grown 32.92 percent and anesthesiologists' has grown 16.28 percent, according to MGMA's most recent physician compensation survey report. Lockhart also pointed to the growing costs of professional liability in some markets and health insurance benefits in all markets as factors in rising costs.

Because so many factors affect anesthesiology and pain management practices' finances and productivity, the devil is truly in the details for this specialty. For example, staffing model has a major effect, with 2004 median total medical revenue after operating costs per full-time-equivalent (FTE) physician in anesthesia-only practices at:

* $379,102 for physician-only practices;

* $424,294 for practices with less than one CRNA/anesthesiologist assistant (AA) per FTE physician; and

* $657,428 for practices with more than one CRNA/AA per FTE physician.

Similarly, Lockhart notes that practices providing pain services differ from anesthesia practices, particularly in staffing requirements. The median total support-staff cost per FTE physician for anesthesia-only practices is $17,302, but for practices with more than 10 percent of cases devoted to pain management, the cost jumps to $30,301.

"Pain is a paper-intensive specialty," says Lockhart. One anesthesiology group he cited as an example has 0.14 FTE posting staff per FTE physician for its operating room and obstetrics practice, compared with 0.6 FTE posting staff per FTE physician for its pain practice.

The investment may be worth it. Median revenue after operating cost per FTE physician for practices with more than 10 percent of cases devoted to pain management is about $50,000 more per FTE physician compared with anesthesia-only practices, the MGMA data show.

The MGMA report provides data from more than 100 anesthesia and pain management practices on staffing and operating cost, broken out per physician, per anesthetic location, by number of trauma centers, by staffing model and as a percentage of total medical revenue. New this year is a section for pain management procedures. This year MGMA conducted the survey in collaboration with the American Society of Anesthesiologists.

Source: MGMA

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