cademic anesthesiology departments and medical schools are tightly interlinked. Ideally, both individual departments and medical schools benefit from the relationship. At the simplest level, aggregation of academic departments provides a school of medicine with the potential to develop and implement coherent strategies relating to clinical care, education and research. In return, academic departments contribute to the development of institutional strategies and receive a variety of central services. At present, escalating financial difficulties place increasing strain on the relationship between clinical academic departments and schools of medicine.

Evolution of Governing Bodies
What is the general evolution of medical school governing bodies relative to academic departments, including anesthesiology? Starting in the 1970s, medical school deans began to centralize previously autonomous departments into faculty practice plans. The apparent goals were to control faculty activity and to tax, both explicitly and implicitly, the practice income of profitable departments, such as anesthesiology and surgery, to subsidize unprofitable medical school departments and activities. In the 1990s, this consolidation of practice plans accelerated, demanding greater fiscal discipline and enhanced service standards, especially in ensuring access of patients to faculty physicians. The process of centralization benefited many anesthesiology departments by allowing them to earn progressively more influential positions within medical schools. Nevertheless, centralization inevitably reduced the administrative and financial independence of anesthesiology departments. Currently fewer than 10 anesthesiology departments that have residency programs are completely financially independent.

Despite several decades of centralization, medical schools have failed to attain many of their original goals and have seen other goals recede. Particularly important, once profitable, taxable departments may now require increasing subsidies. Departments of anesthesiology are progressively becoming less profitable because staffing costs have increased faster than revenue, especially from Medicare and Medicaid. At the same time, increasing demands on medical schools for teaching medical students and on teaching hospitals for clinical productivity have increased demands on anesthesiology faculty as well as on those in other departments. Schools of medicine and hospitals are increasingly demanding changes that, regardless of merit, are unpopular with the majority of faculty and departments. When circumstances seem particularly difficult and when the demands of a governing body appear to be responsible for some of the difficulty, why not secede?

Secession and Its Consequences
Secession is a serious undertaking with a propensity for generating undesired outcomes. What seems like a good idea in the heat of the moment sometimes turns out very badly. For instance, the War of Texas Independence from Mexico (1836), from the perspective of the secessionists, had a favorable outcome, whereas the Civil War, from the perspective of the secessionists, had multiple undesired outcomes. In the midst of this turbulent era, secession is likely to generate undesired outcomes for most departments, for reasons that are both organizational and financial.

After secession, both the external and internal organization of a seceding department would fundamentally change. First, a completely independent department of anesthesiology would not be included in the institutional strategic planning processes. Clinical planning without the input of anesthesiology could easily result in clinical demands (e.g., anesthesia coverage for underutilized ambulatory surgical facilities) that could be difficult to achieve. Second, the process of selecting departmental leadership would change. Academic medical centers emphasize academic achievement in choosing departmental chairpersons; independent private practice groups are much more likely to select a leader based on his or her business skills.

Fiduciary Concerns
The financial threats that come with secession are imposing. First, a seceding department could lose exclusive contracts with affiliated teaching hospitals. Secession would convert hospital-based anesthesiology services to a clinical commodity and would encourage hospitals to choose anesthesiology providers purely on business criteria, the “low bidder” syndrome.

Second, the transition from a centralized (and possibly inefficient) billing and collection service to a private model, even if superb, is treacherous. Once secession is assured, the commitment of a centralized billing and collection service to the departing department’s accounts receivable would inevitably diminish. At the same time, a private billing and collection system would require lead time before cash receipts flow smoothly.

Third, a successfully seceding department will still face demands for coverage of unprofitable services while the inherent financial penalties imposed by surgical training programs will continue.

Fourth, an independent anesthesiology group is unlikely to earmark revenue for research and education. While the support of education and research activities by private practice anesthesiologists through organizations such as the Foundation for Anesthesia Education and Research has been invaluable in promoting the academic credibility and prestige of the specialty of anesthesiology, departmental commitments of faculty time and resources also have been essential at both local and national levels.

The fifth, and perhaps most important, financial reality is that a seceding anesthesiology department could have less money to spend after secession. Among departments with residency programs, approximately 40 percent had negative margins in 2000, 2001, 2002 and 2003. In 2003, the negative margin in those departments averaged $1.7 million. A negative margin could be tolerated by a medical school, if accepting a negative margin was considered essential to achieving the school’s multiple missions, and deficits in one department could be offset by surpluses in another. In contrast, an independent department would be required to reduce anesthesiologists’ salaries in the face of a deficit. Some anesthesiology departments apparently had a positive margin in 2003, but many of those departments were profitable on paper only because of institutional subsidization. Average institutional support per full-time equivalent in reporting departments more than doubled between 2000 and 2003, from $34,319 to $85,607. During that same period, total institutional support per department almost tripled, from $1.2 million to $3.4 million. After secession, a department that had previously received institutional support would require assurance that institutional support would continue but would be negotiating for institutional support with the same administration from which it had seceded. The success of such a scenario is difficult to visualize — imagine Jefferson Davis asking Abraham Lincoln for an economic aid package.

Ultimately the basic business equation underlying secession of an anesthesiology department from a medical school can be stated as follows:

Post-secession revenue = departmental professional revenue minus presecession institutional subsidy plus/minus net change in practice expenses minus cash flow losses associated with changing billing systems plus new institutional contract.

Daunting arithmetic. In fact, one might argue that the best reason for an anesthesiology department not to propose seceding from its medical school in 2005 is that the medical school administration might enthusiastically agree. Be careful what you ask for.

References:
1. Tremper KK, Shanks A, Sliwinski M, et al. Faculty and finances of United States anesthesiology training programs: 2002-2003. Anesth Analg. 2004; 99:1185-1192.
2. Abouleish AE, Prough DS, Whitten CW, Zornow MH. The effects of surgical case duration and type of surgery on hourly clinical productivity of anesthesiologists. Anesth Analg. 2003; 97:833-838.
3. Abouleish AE, Prough DS, Zornow MH, et al. Designing meaningful industry metrics for clinical productivity for anesthesiology departments. Anesth Analg. 2001; 93:309-312.

Donald S. Prough, M.D., is Rebecca Terry White Distinguished Chair, Department of Anesthesiology, The University of Texas Medical Branch, Galveston, Texas.