In a previous newsletter, we outlined the four main drivers of anesthesia subsidies: 1) Fair Market Value Compensation, 2) Anesthetizing Locations, 3) Staffing Mix, and 4) Billing/Contracting Performance. In this newsletter, we’ll discuss the first of these: Fair Market Value Compensation.
Beginning in the mid-1990s, there was a dramatic drop in anesthesia MD and CRNA graduates, yet the number of surgeries, and thereby the need for anesthesiologists, was continually growing. This imbalance in supply and demand caused a dramatic increase in anesthesiologist compensation. In 2000, the average salary for an MD anesthesiologist was approximately $280,000 per year.1 Today, the average salary is $423,000.2 While CRNA compensation has not grown at the same rate, it has still increased from $140,000 to $158,000 in just the last 4 years.3
But, as you might expect, reimbursement rates for anesthesia services have not increased at the same rate. This has left a large shortfall for many anesthesia groups trying to recruit anesthesia providers to their practice.
There is no immediate fix for this driver of anesthesia subsidies – anesthesia providers will continue to seek fair market compensation for their services, and hospital and groups will be forced to pay fair market value to service their ORs. However, groups and hospital administrators should evaluate what they are getting for their money. Are there performance-based incentives in place for the anesthesia providers to meet hospital objectives? Is the hospital getting the most revenue it can from its providers, or are late starts, poor OR utilization, and cancelled cases creating missed opportunities in revenue generation and efficiency? Can the group or hospital add (more) CRNAs to provide care at a reduced cost? Is the group getting the best rate from its payors to compensate for provider costs and services?
1.”Physician Compensation and Production Survey,” Medical Group Management Association (MGMA), 2008
2. Physician Compensation and Production Survey,” Medical Group Management Association (MGMA), 2010
3.”Practice Profile Survey,” American Association of Nurse Anesthetists (AANA), 2010