A California appeals court this month ruled that certified registered nurse anesthetists in that state do not need physician supervision to do their jobs.
It's a clear victory for rural hospitals in California that have complained that requiring physician supervision of CRNAs adds unneeded costs and limits the range of surgery services they can provide.
The March 15 decision by the First District Court of Appeal in San Francisco really isn't a surprise. California is already one of 16 states that have opted out of a federal mandate that denies Medicare reimbursements to hospitals that allow CRNAs to work without physician supervision. Republican Gov. Arnold Schwarzenegger opted out in 2009, and his Democratic successor Jerry Brown supported the decision.
The suit was brought by the California Medical Association and the California Society of Anesthesiologists and it's not clear if they plan an appeal. CMA on its website says it is "disappointed with the decision" and is "exploring all legal, regulatory and legislative options."
Not surprisingly, California Hospital Association spokeswoman Jan Emerson-Shea told HealthLeaders Mediathat CHA was "very pleased by the decision."
There has been a lot of back-and-forth arguing between CRNAs, anesthesiologists, and CHA about whether or not patient safety is compromised when states opt out of the supervision requirement. Obviously, in a perfect world, it's always preferable to have the highest-trained medical professionals administering or supervising care.
It's not clear, however, if any studies show that patient care suffers when CRNAs provide unsupervised care.
Besides, this case isn't about patient safety, or even access to care. It's about money.
The savings in compensation costs and the money generated by additional procedures could be considerable for rural hospitals. Merritt Hawkins & Associates, the Dallas, TX-based national physician recruiting firm, says that first-year financial packages for anesthesiologists range from $275,000 to $350,000, while CRNAs earn around $200,000.
"Obviously the return on investment is there. It's a simpler search. There are more CRNAs in the marketplace than there are anesthesiologists," says Sam A. Karam, division vice president for Merritt Hawkins. "From a sheer dollars-and-cents standpoint it always makes sense to have CRNAs. Now, that is the main reason we have seen CRNAs being more in demand."
Karam says anesthesiologists were once among the most-highly sought after medical specialists. That is no longer the case.
"From a demand perspective, is it difficult to find anesthesiologists today? No. That's a stark change from just a few years ago when the demand for them was extremely high," he says. "You will find some that actually aren't even working in permanent positions. They're working locum jobs to stay afloat."
CRNAs are not the main reason for the slowing demand for anesthesiologists. Larger factors, including the long-sputtering economy and the anticipated changes that will come with healthcare reform, have "flip-flopped" market demand away from specialists and towards primary care docs.
Demand for anesthesiologists has dropped, Karam says, because demand for elective procedures has dropped. "That obviously was a great deal of the profit margin that a lot of surgeons were seeing when they opened their own surgery centers. With that market dipping, it took away a lot of the profit margin and a lot of the demand," he says.
"In addition you have hospitals being far more aggressive in communities than they have been before. The consolidation of medicine has really pushed hospitals to go out in their communities, buy up these surgery centers, or at least partner with these organizations and be a stronger player in their own backyard, so that they aren't losing those profitable procedures when they are there," he says.
Of course, many of the same economic forces that are hurting anesthesiologists are also hurting CRNAs, but Karam says CRNAs are having a "far easier" time finding work, and it all boils down to labor costs.
"They are still even higher in the locums demand market than anesthesiologists. They are in a much more comfortable position simply because what they can do, what the law allows them to do, and what they are commanding for pay," Karam says.
Perhaps the best hope for anesthesiologists is if CRNAs get too greedy.
"Paying CRNAs will change once they start to lobby and demand higher salaries," Karam says. "Once it gets up there to $250,000 or what an anesthesiologist can make, then obviously hospitals or medical groups will be more comfortable paying that money to a physician rather than an allied professional."
As for the California ruling, it's hard to see how this could end up differently. Many rural hospitals are running on razor thin margins. Medicare and Medicaid are trimming reimbursements, and private plans have adopted zero tolerance toward cost shifting. The hunt for savings is prompting hospital administrations to reexamine every aspect of care delivery, as they should.
Again, if there is no conclusive evidence to show that patients receive substandard care or are placed at greater risk under CRNAs, rural hospitals that provide bread-and-butter surgical procedures should not have to pay considerably more for the services of an anesthesiologist.
Anesthesiologists commanded top compensation during a robust economy. Like many other professionals, however, they may have to readjust their expectations. Perhaps it is time for them to make compensation demands that are more compatible with the market.
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John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.