On Oct. 1, the marketplaces opened for enrollees to take part in the Affordable Care Act. Anesthesiology practices across the nation have been hard at work preparing for the legislation to take effect for months by merging and acquiring each other in hopes of adding a layer of security against an unknown marketplace.

Historically, anesthesiology practices have merged as a means to increase revenue, gain payer negotiation leverage and market themselves as a profitable enterprise.

Now we’re seeing a paradigm shift from wealth (focus on financial gain and salary) to security (job security), and a continued drive to band together to form strength in numbers. Mark Wines, President of Business Services with abeo, has dubbed the current trend “Merger Mania” and said staying attractive to the marketplace is vital for staying relevant during the tumultuous transition.

“If you want to be recognized, you need to be big,” he said. “Size matters when it comes to being recognized.”

If you’re an anesthesiology practice considering a merger, or just someone interested in the market in action, there are things to be cognizant of as the market moves forward.

The Affordable Care Act

One of the key forces driving the latest mania of mergers and acquisitions is the Affordable Care Act. Because of the expansion of healthcare coverage in the United States, healthcare providers are preparing to see demands on their practices begin to rise.

Since they play such a huge role within a surgical home, this does not preclude anesthesiology practices.

“No single group out there impacts the surgical home as much as anesthesiologists,” Wines said.

Under the Affordable Care Act, the game shifts from hospital systems hiring as many qualified surgeons as possible in order to perform as many surgeries as possible towards a more efficiency-based system. Since the ACA identifies quality indicators, hospitals will look towards anesthesiology practices to handle their business with efficiency.

More insured patients will be looking for care under the ACA, which could lead an increase in revenue as well.

Expansion of Services

Another benefit of an anesthesia merger or acquisition is the ability to increase the services of one business. By creating a practice with multiple specialties, the practice is better suited for success in the unknown healthcare marketplace of the future.

This is a trend gaining traction that could potentially become the norm within the industry. Hospital systems are reworking their organizations as well in search of a simplified process, bucking the trend of having multiple anesthesiology practices being used within the system and instead having one large one. Boutique practices with only one specialty will not be able to grasp hold of the increased business.

Marketing your anesthesia practice is becoming a necessity.

Practices would then be able to grow their workforce in a quick and efficient manner without having to go through new hire training. Additionally, expansion of a business footprint in this manner can grow the practices own customer base, as the other practice is likely to bring loyal customers along with it, in addition to the additional patients the new, larger, practice will be able to accommodate.

Obviously, strength in numbers is a time-tested strategy for survival and success. That’s why the addition of other practices can help mitigate the uncertain risk of the unknown healthcare future. It’s a safety net – an added bit of security that dramatically limits the damage that losing out on a contract could do to a smaller practice. It may even eliminate the need for a stipend that can be appealing to hospitals.

Concerns to Consider

Outside of the significant cost conversation, what once made your practice unique may become a thing of the past should you decide to move forward with a merger or acquisition. Maybe you used to run things one way because you were small enough and flexible enough to give you a small market advantage over the competition. Since your overhead increases in a merger or acquisition, your leadership team must learn to coexist with another leadership team. Your employees might not be pleased with the corresponding culture change, which could have detrimental effects on your new practice. How will your 401(k) plan match up now that you’ve doubled in size?

These are all questions without answers at this point. But what is certain is that the marketplace is looking for a practice that can provide a wide variety of services with only once voice to report to. The more you can do, the better suited for the future you will be.

Alternatively, it is a real reality that if anesthesiology practices don’t begin expanding through mergers and acquisitions, that more and more hospitals and other healthcare providers might find it beneficial to expand their own practices in house. With the increased demands and pressures on hospitals, if smaller specialized anesthesiology practices aren’t able to meet those demands, then it only makes sense for them to move them in house.

In conclusion, with the implementation of the Affordable Care Act, the future is unclear as to what the increased pressures will be on the healthcare system as demand rises. One thing which is clear, however, is that larger and more diverse practices will have the advantage. There is a lot to consider and there is no given solution. As a key decision-maker, the only thing you can do is take the information and data you have at hand and make the right practice management decision for your anesthesiology practice, your staff and your customer base.



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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