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SA
and the Medical Group Management Association (MGMA)
collaborate on an annual survey of anesthesiology
practices, collecting data on revenues, costs,
production and staffing. The 2006 Cost Survey
for Anesthesia Practices Report (Based on 2005
Data) is an important reference tool. It is available
to ASA members at the MGMA “Affiliate”
discount rate through www.ASAhq.org/news/mgmacostsurvey.htm.
Practices that participated in the 2006 survey
have received complimentary copies of the Report
— as will all practices that complete the
2007 survey forms that have just been mailed this
month and are posted on the “Practice Management”
page at www.ASAhq.org.
To help you decide whether purchasing and participating
will be of value to your group, an explanation
of the data in the 2006 Report follows.
Key Findings
The Report’s authors observe that the increase
in the number of operating rooms (O.R.s) that
groups are being asked to staff — as well
as imaging and endoscopy suites, cardiac cath
labs and other hospital anesthetizing locations
outside of the O.R. — has caused a decline
in net medical revenues. Between 2004 and 2006,
the annual number of cases per anesthetizing location
dropped by about 8 percent, from 1,096 to 1,013.
Net medical revenue per full-time equivalent (FTE)
physician declined by more than 11 percent, from
$559,524 to $495,766.
Hospital compensation for anesthesiologists’
services — usually if imperfectly called
“stipends,” which hints at unearned
payments — is now very common. Seventy-eight
(78.08) percent of responding practices reported
that they received stipends from at least one
hospital. Another 20 percent of respondents were
compensated by three, four or five of the hospitals
their groups covered. Of those responding to the
survey question on the dollar amount of stipends,
25 percent reported receiving amounts exceeding
$1 million from at least one hospital. Without
compensation from the hospitals, many groups would
be operating in the red. Across anesthesiology
practices, total costs exceed total net revenues
by $20,000. (The standard deviation is nearly
five times that figure, however.)
The study authors also point out that the data
indicate that smaller practices consisting of
10 or fewer anesthesiologists bill considerably
higher total numbers of units, per FTE physician
(17,792), than do larger groups — almost
twice as many. One reason is the higher ratio
of nurse anesthetists in smaller practices.
Using the Data to Benchmark Your Practice
It is important to note that the statistics vary
considerably with the size of the practice, payer
mix, use of the care team model and the number
of trauma centers covered, among other factors.
Unadjusted averages or medians paint a general
picture of the specialty. To benchmark your own
practice, you will need the statistics for groups
of your own size and situation.
For example if there are 22 FTE anesthesiologists,
the appropriate benchmark for the cost of employed
nurse anesthetists would probably be closer to
the median for groups of 11-30 anesthesiologists
($162,951) than the median for practices of all
sizes ($148,247). There might alternatively be
reasons why the 90th percentile would be the better
benchmark: perhaps the group’s net fee-for-service
medical revenues are at the 90th percentile, $85.43,
rather than at the median level of $35.96. The
Report does not contain geographic breakdowns,
but if the practice is in New York City, higher
revenues and higher costs would be expected.
Where median values appear similar across the
various group sizes, those values may inspire
the greatest confidence. The median number of
FTE anesthesiologists needed to generate 10,000
ASA units (base + time + modifying units) is broken
down by group size:
10 or fewer FTE physicians:
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Thus a 22-FTE group that produced 275,000 units
in a year would be right at the median. If instead
it produced 366,667 units, it would be using only
.60 FTEs per 10,000 units. In other words, it would
be one-third more productive than a same-sized group
producing 275,000 units. The fact that the medians
for all but the groups with fewer than 10 anesthesiologists
cluster around .80 tends to validate this figure,
especially when we already know that smaller groups
make greater use of nurse anesthetists, thus boosting
productivity.
Customizing Information Through Many New Data Cuts
and Cross-Tabs
The 2006 Report is organized into multiple sections
so as to display information that will be meaningful
for your particular practice. For the first time,
pain medicine practices appear separately from “anesthesia-only”
practices, which provide a minimum of pain management
services. Pain medicine operating costs such as
personnel, drug, equipment and building expenses
are far more similar to the expenses of other office-based
specialties than they are to those of the traditional
anesthesiology group. The median total support staff
costs per FTE physician in an anesthesia-only practice
are $15,725, in contrast to a median of $86,042
for pain medicine practices. On the production side,
there are tables showing the numbers of evaluation
and management services, nerve blocks and other
procedures performed by physician, by provider,
by the number of pain facilities staffed and as
a percent of total medical revenues.
Data for anesthesia-only practices are subdivided
into sets of tables for groups with one to 10, 11-30
and 31 or more FTE anesthesiologists; for groups
by care team staffing levels; by payer mix; and
by number of trauma centers served, level of nurse
anesthetist and anesthesiologist assistant staffing
and for academic practices. To permit credible comparisons,
the tables contain not just absolute dollar or FTE
values but include normalizing information showing
values per FTE physician, per anesthetizing location,
per unit billed and as a percent of total medical
revenues.
For these diverse practices, the best approximation
of anesthesiologist compensation, median total physician
cost (including benefits) per FTE physician, is
as follows:
It should be obvious that most users will need to
look at several tables in order to draw conclusions
about the most accurate benchmark levels for groups
of their size, staffing model, payer mix and other
variations. The wealth of cross-tabs facilitates
true comparisons. In addition to the statistics
cited above, the 2006 Cost Survey Report contains
data on ASA units per anesthesiologist, revenues
per unit, revenues and costs per anesthetizing location
— and much more.
Conclusion
The MGMA-ASA Cost Survey of Anesthesia Practices:
2006 Report (Based on 2005 Data) is a source of
management information that may be critical to your
hospital and managed care negotiations. The survey
data come from more than 224 practices, a 36.19-percent
response rate, in a broad geographic distribution.
Payers and consultants increasingly rely on MGMA
reports, including this one, which represents many
hours of work by anesthesiologists, administrators
and staff of the two associations. The Cost Survey
also represents many hours of effort on the part
of anesthesiology practice staff. ASA is pleased
to acknowledge this important contribution through
the offer of complimentary copies of the report.
We encourage you to participate in the new Survey
that, together with MGMA, we launch this month.
In Memoriam: Thomas A. Hurrell
he anesthesiology community in Illinois and around
the country lost a valued friend and practice management
expert upon the untimely death of Tom Hurrell on
January 20, 2007. Tom managed a number of anesthesiology
groups and was a member of the MGMA Anesthesia Administration
Assembly for 22 of his 48 years. Many, many of us
will remember and miss Tom’s sagacity, insight,
energy, devotion to his family and his wonderful
sense of humor. Our deepest sympathies go to Tom’s
wife and three children, for whom a memorial fund
has been established Contributions may be made
to the Thomas A. Hurrell Memorial Fund and mailed
to Holy Angels Church, 180 South Russell Ave., Aurora,
IL 60506; telephone (630) 897-1194.