In this podcast, NorthStar Anesthesia CEO Adam Spiegel and Chief Anesthetist Officer Randy Moore discuss the future of anesthesia and the profession of CRNAs heading into 2024. They cover topics such as the anesthesia business sector, the CRNA supply shortage, private equity-supported firms, Surprise Billing rule implementation, and the state of hospitals today. This episode provides valuable insights into the challenges and opportunities for CRNAs in the coming years.
The anesthesia business sector is facing challenges due to a supply-demand imbalance, with increased demand for anesthesia providers but lower reimbursement rates from payers impacting revenue for anesthesia companies.
The future of anesthesiology is being shaped by factors such as the aging population and the CRNA shortage, which is leading to different practice models being adopted by hospitals and ASCs, focusing on effective leadership, culture, and flexibility.
Private equity involvement in anesthesia-related businesses has attracted attention, but the limitations of their traditional business model, combined with the impact of the No Surprises Act, are making it less profitable and leading to a decline in private equity investment in anesthesia.
Deep dives
Impact on Anesthesia Business Sector
The anesthesia business sector is facing challenges due to a supply-demand imbalance. The movement of surgeries from hospitals to ASCs has increased the demand for anesthesia providers. Hospitals, under pressure to increase revenue, are expanding their capacity, requiring more anesthesia coverage. ASCs are also experiencing increased volume and are looking for additional staff. This demand has led to a rise in wages for CRNAs. However, anesthesia companies are facing difficulties as payers are paying lower reimbursement rates, impacting their revenue. The No Surprises Act has further compounded the challenges, as hospitals are hesitant to pay higher subsidies. This situation prompts hospitals to consider different practice models and negotiate prices.
Future of Anesthesiology
The future of anesthesiology is being shaped by various factors. The demand for CRNAs continues to increase due to the aging population and the CRNA shortage. Hospitals and ASCs are adopting different practice models, such as physician-heavy, care team, and QZ models, depending on the surgeon composition and cost considerations. The No Surprises Act has also impacted practice models, with Cigna paying less for non-medically directed cases. Overall, there is an increased focus on managing anesthesia practices effectively and efficiently with a strong emphasis on leadership, culture, and flexibility to meet the changing needs and expectations of clinicians and patients.
Private Equity and Practice Models
Private equity involvement in anesthesia-related businesses has attracted attention. Private equity firms have facilitated groups of anesthesia practices to negotiate better pricing with payers. However, the No Surprises Act has significantly impacted private equity-backed firms, limiting their ability to negotiate pricing. Anesthesia practice models vary based on factors such as hospital preference, surgeon composition, and availability of physicians or CRNAs. The cost implications of different models are considered along with the need to maintain high-quality patient care. Hospitals are exploring various arrangements, either through private equity or independent practices, to navigate the changing landscape and ensure optimum financial and operational outcomes.
The Impact of Private Equity in Anesthesia
Private equity in the anesthesia space is becoming less profitable due to the limitations of their business model. Private equity firms traditionally buy assets, raise prices, and then sell for profit. However, consolidation in anesthesia has made it difficult to raise prices as the cost of providing anesthesia remains the same. Private equity firms are finding it challenging to generate returns in this environment, leading to a decline in private equity investment in anesthesia.
The No Surprises Act and Its Impact on Anesthesia
The No Surprises Act aims to address the issue of surprise medical bills for out-of-network services. However, the act has shifted power to the payers and created challenges for anesthesia providers. Anesthesia groups are experiencing reduced payments from payers, with threats of further reductions if they do not accept lower reimbursements. The only recourse is the independent dispute resolution (IDR) process, which is costly and time-consuming. The act has tilted the scales in favor of payers, leading to increased financial struggles for anesthesia providers.
We’re closing out the year with what’s becoming an annual conversation on the podcast. Today we’ve invited back NorthStar Anesthesia CEO Adam Spiegel and Chief Anesthetist Officer Randy Moore, DNP, MBA, CRNA, to update the state of the profession and discuss what’s to come for CRNAs in the year ahead. From business strategy shifts to workforce development to Surprise Billing, we’ll cover some of the top issues impacting anesthesia and CRNAs heading into 2024.
Here’s some of what we discuss in this episode:
A high-level look at what’s happening in the anesthesia business sector.
The status of CRNA supply shortage.
What’s going on with private equity-supported firms.
The impact of Surprise Billing rule implementation.