The 2018 Advanced Institute of Anesthesia Practice Management (AIAPM) conference hosted in Las Vegas offered a wide variety of sessions focused on billing and practice management. However, the greatest takeaways stemmed from the bigger picture look at the healthcare industry and where anesthesia sits within it. As a highly specialized niche within healthcare, anesthesia doesn’t always follow suit in the same timelines as other specialties when it comes to major healthcare trends like value based care or mergers and acquisitions. Reasons vary from regulatory requirements to physician preference on why, but the truth is anesthesia is unique. More importantly, the value anesthesia can offer the healthcare industry is greater than just the service of anesthesia provided to patients.

The specialty of anesthesiology continues to demand specialized knowledge

While this may seem like a silly point to make, here’s the reality: the AIAPM is full of presenters that provide services to anesthesia groups. These anesthesia billing companies, attorneys, billing and coding auditors, and technology vendors all have one thing in common besides their anesthesia-specific focus.

anesthesia quote with picture of complex spiderweb

Jack Mayo and Daniel Prevost AIAPM 2018

That is their list of real-life examples of anesthesia groups that suffered a significant loss or unfortunate misstep at the hands of a service provider that didn’t have a thorough knowledge of anesthesia. We won’t argue that perspectives outside of the industry can generate creativity and new ideas but use caution when seeking support and counsel from healthcare companies that have little or no experience in anesthesia.

However, anesthesia practices are not self-contained. To be successful, they must have solid relationships with contracted hospitals, health systems or ASCs whose core focus is not anesthesia. To show your value to those outside the anesthesia market, you have to first understand the value your practice can bring through leadership and collaboration. It’s important to align yourself with the right service providers with the right anesthesia knowledge that will make you look good.

There is an imbalance across the healthcare delivery continuum

How large of an imbalance? Jeff Swearingen with Edgemont Capital Partners, LP, presented data1 on the relative enterprise value of the top three largest players in each of the following healthcare sectors:

  • Payors $380.2B = United Health, Anthem, Aenta
  • Hospitals $102.9B = HCA, Tenet, UHS
  • Ancillary Facilities $93.0B = Fresenius, DaVita, Encompass HealthQuote on anesthesia from AIAPM 2018
  • Physician Staffing Services $23.5B = Envision, Mednax, Team Health

Compare the relative value of the smallest sector, Physician Staffing Services at $23.5 billion, to the largest, Payors at $380.2 billion, and you find a scale imbalance over 15:1 across the health care continuum. What’s more? Providers didn’t even make the list of the top four sectors in the healthcare market and anesthesia is an even smaller piece of that pie. Money talks! It’s clear the Payors sector has incredible influence in the health care industry and over the sectors where the point of care actually takes place.

Healthcare consolidation will continue as top players grasp for more power and influence. This is surprisingly a trend where anesthesia has been a rollercoaster of consolidation, decentralization and then back again. But is that changing? The anesthesia M&A lookout for 2018 and beyond is something to watch closely. Keep an eye out for a follow up from us on this in the near future.

A shift in leadership’s approach to strategy and practice governance could provide greater sustainability to certain anesthesia practices

How do you adapt to the greater picture of market consolidation? Position your practice to take on a mindset of growth. This may not be exactly what your group desires though. While discussion is prevalent around growth strategies for positioning a practice to sell or acquiring other practices to grow larger, what we hear a lot less about are strategies that support anesthesia groups who are shrinking or wish to remain viable at their current size. Growth can mean more than just M&A. It often means growing your network, your value and your reputation.

Many groups work hard to build relationships with the hospital to arrange hospital-only contracts or exclusive hospital arrangements. In some cases, choosing to decline service inquiries from surgery centers down the road which would have yielded small revenue. But hospitals continue to lose surgical case volume to outpatient settings; we are seeing hospitals close and consolidation of hospitals to larger health systems isn’t slowing down.

What happens if volume decreases at the hospital or if they sell to health system with national anesthesia management? Do your agreements have competitive clauses? Will the surgery center be receptive to you knocking on the door? Having the right mindset for leadership and showcasing your value early and often in business relationships can help your practice with contingency planning long before the situation arrives where you may need it. Check back here soon for our follow up on strategies to help sustain your practice in response to what’s happening in the hospital landscape. 

Were you at the 2018 AIAPM conference? We would love to hear your thoughts or questions from the conference in the comments below.

Missed out this year? No worries! With so many valuable insights out of this year’s AIAPM conference, we have more to share. Check back throughout the month for more upcoming coverage from the 2018 AIAPM conference.


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1 Source: Company Press Release, Wall Street Research, and Capital IQ as of 3/11/2018.

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