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Cutting Anesthesia Costs Starts with a Battle

Philip Betbeze, for HealthLeaders Media, March 21, 2013

This article appears in the March 2013 issue of HealthLeaders magazine.

If your hospital or health system is currently using an all-physician anesthesia group, this might be a ripe opportunity to cut costs without compromising patient safety, say many advocates.

The issue of whether hospitals can be reimbursed by CMS for using unsupervised certified registered nurse anesthetists is a contentious one, but it has been decided since 2001, when a Medicare and Medicaid regulation change allowed states to opt out of a requirement that nurse anesthetists be supervised by an anesthesiologist. Some 17 states have done so, but even in states that haven't, many chief executives could achieve significant savings by creating anesthesia care teams with anesthesiologists in a central, supervising role. But it's tough and fraught with potential discord, not least because of surgeon resistance, but also because of the persistence of legacy all-physician anesthesiology groups.

Yet the conversion to CRNAs can, and in many cases, must be done, says Preston Simmons, chief operating officer and interim CEO with Providence Regional Medical Center in Everett, Wash. Providence Regional, a 491-bed, acute-care hospital that is part of the Providence Health & Services' 37 acute care ministries in West Coast states, changed to a "care team" approach in 2011.

"It really boiled down to alignment with where we needed to go as a hospital and a community," he says. "Our model was very costly, and the existing group was not aligned around creating a value equation for us. What I mean by that is that it was us having to push them along as opposed to them pushing efficiency and effectiveness."

That it's expensive for many hospitals to offer an all-physician anesthesia team to its surgeons is unquestionable. Anesthesiologists on the whole say that all-physician anesthesia means better-quality care, and it's still a dominant model. But as in most contentious subjects, the truth can depend on the particular circumstance or situation.

Simmons says Providence leadership had tried for years to align the legacy anesthesiology group with quality and service goals, to little avail.

"This group had a multimillion-dollar subsidy and not as comprehensive coverage as we would like. We asked them to look at different models that could create more value while reducing cost, but they struggled to do that," says Simmons.

Among the models that Simmons asked the legacy group to consider was a model that included CRNAs as a way to provide more locations and more coverage outside the OR at a lower cost per encounter. Other ideas included monitoring of quality and safety data and standardization of processes.

"It got to a point where they chose not to change models, despite a lot of the hospitals in the state and around the country using a CRNA model," he says.

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