Written by Ron Evans

I served as CEO of a large west coast, MD-only anesthesia group from 2008 to 2011. Midway through my tenure, that group lost a major contract with a large regional hospital to an out-of-state anesthesia management firm.  The replacement firm agreed to embrace a model that incorporated the wholesale use of CRNAs at one of the hospital’s two campuses. The hospital appeared to be moving toward a care team model at their other (primary) facility.  Meantime, our MD-only group struggled to find a way to adopt an organizational concept that incorporated non-physician anesthesia providers.

Other issues were admittedly at play that led to our group’s loss of the aforementioned contract.  At the top of the list was a smoldering resentment by some hospital C-suite leaders over a contentious contract negotiation three years prior. It resulted in a less than amicable relationship with the hospital’s CMO.  Our group, however, was not without fault.  For over a year after the preceding contract negotiations concluded, many of the anesthesiologists engaged in passive-aggressive behaviors the hospital correctly viewed as inconsistent with being team players.  A Press-Ganey survey in the initial year after commencement of the previous contract yielded extremely low marks for anesthesia.  Anesthesia leadership recognized the survey was not reflective of their group’s core values or how they wanted their surgeons and other hospital colleagues to view them.  They took proactive changes that were quite evident in the subsequent Press-Ganey survey, which showed a complete reversal in their sub-par ratings.  Despite exemplary ratings at the time of the next contract negotiations, the damage was likely already done.  Hospital administration was convinced it needed to make a change.

During the course of negotiations between the hospital and existing anesthesia group, it became clear hospital leadership believed the care team model was their desired form of anesthesia delivery.  The existing group’s detailed financial analysis showed that unless they moved to a 1-4 anesthesiologist-CRNA ratio, the costs associated with the two different models were essentially identical.  This analysis was presented to the hospital negotiating team.  Nevertheless, the hospital continued to believe the care team model was their answer to a more optimal anesthesia services agreement.  After a contract was awarded to the new anesthesia provider, unofficial reports were that the cost difference between the agreement awarded to the new anesthesia delivery firm with its CRNA component and the one proffered by the existing all-MD group was indeed negligible.

Hospital leadership eschewed the positive strides the existing group made in surgeon and staff ratings of anesthesia services and the group’s analysis showing relatively little or no cost savings for making the switch to a model that included the use of CRNAs.  The existing group also faced an underlying problem regarding how they could make a transition to a care team model.  For any MD-only group, a conversion of this nature represents a major paradigm shift, one not easily accomplished through the process of natural attrition by replacing a departing MD with a CRNA.  There is not a clean 1-for-1 exchange.  In this particular instance, the group never had to face that hurdle. The group’s relationship with one of its major primary hospital sites ended, and almost 30 board-certified anesthesiologists found themselves scrambling to find suitable employment elsewhere.

The above events transpired prior to the passage of the Affordable Care Act (a.k.a. Obamacare) in 2010, but could hospital leadership at this hospital somehow have been prescient?  I doubt it.  Dr. Karen Sibert, discusses in her article Vinyl Records and The Future of Medicine how market forces are driving changes in anesthesia practice.  These forces were likely in play in this particular example, influencing the thinking and behavior of hospital leadership.  The practice of anesthesia has inexorably evolved because of technology and drug advancements. Making anesthesia delivery not only safer, but also less dependent on direct, continuous physician administration, explains Dr. Sibert in her post.

Dr. Sibert references near the end of her article California anesthesiologists’ support of AAs (anesthesiologist assistants), and correctly points out there currently exists a paucity of AA training programs.  Staunch opposition from the American Association of Nurse Anesthetists (AANA) often complicates legislation that would permit more widespread use of AAs in hospitals, since CRNAs often view AAs as a threat to their own profession and livelihoods.

Sooner than later, it seems we must stop engaging in turf battles. We must start exploring which healthcare settings are appropriate for different anesthesia delivery/organizational models not emotionally but rationally. This is not only from an economic perspective, but also efficacious in terms of patient safety and other legitimate criteria.  If MD-only anesthesia groups are indeed becoming anachronistic now, can the care team model incorporating exclusively MDs and CRNAs be far behind?


Ronald L. Evans, MPH, FACHE, FACMPE
Senior Healthcare Consultant

Karen S. Sibert, M.D., is an associate professor of anesthesiology, Cedars-Sinai Medical Center.  She blogs at A Penned Point.


abeo Management Corporation (abeo) serves as a leading source of revenue cycle management and practice management with a specialization in anesthesia. The company leverages its people, processes, and software to serve independent practices, surgery centers, hospitals and healthcare systems with a scope of services that include billing, coding, transcription, practice management, and business consulting.

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