ENGLEWOOD, Colo. -- Anesthesia practices in the best financial shape are those performing more surgical procedures, handling less chronic pain care and doing little Medicare business, suggest data from the first-ever Medical Group Management Association (MGMA) Cost Survey for Anesthesia Practices: 2004 Report Based on 2003 Data.
While surgical anesthetics represent only 71.33 percent of total cases, they generate 82.75 percent of a practice’s median revenue. Similarly, obstetrics represents only 7.06 percent of total cases but generates 10.05 percent of revenue. Conversely, chronic pain cases represent 9.84 percent of a practice’s cases, but generate only 3.41 percent of revenue.
“It’s not surprising that surgical anesthetics represent the greatest share of practices’ revenue, but I am pleasantly surprised by the relationship between case volume and revenue in obstetrics because of its reputation as a financial drain,” said Shena J. Scott, MBA, FACMPE, president of the MGMA Anesthesiology Administration Assembly and administrator of the Brevard Anesthesia Services PA in Melbourne, Fla.
The survey data suggest that larger practices are less likely to use non-physician providers (NPPs) than smaller practices. For practices with 10 or fewer physicians, the ratio of NPPs per physician is 1.33 and the cost of NPPs as a percent of total medical revenue was 36.53 percent. For practices with 31 or more physicians, the ratio of NPPs per physician is .37 and the cost of NPPs as a percent of total medical revenue was 9.63 percent. Likewise, those practices with 50 percent or more of their revenue coming from government payers also had the highest ratio of NPPs to physicians (1.71) compared with those having less of their revenue coming from government payers.
Almost 86 percent of the survey respondents report that they receive a stipend. Perhaps as a result of more clout or market share, the largest practices (31 or more full-time-equivalent physicians) receive a median total direct stipend of $996,044. That compares to $482,124 for practices with 10 or fewer FTE physicians and $470,500 for practices with 11 to 30 physicians.
“One look at how Medicare’s anesthesia reimbursement rates affect practice revenue, and it is clear why so many practices receive stipends from their hospitals,” said Scott. The survey found that for practices with less than 30 percent of revenue coming from government payers, median revenue per ASA* unit is $39.78 compared with $31.11 for practices with more than 50 percent of revenue coming from government payers.
“Clearly, commercial payers and hospital stipends are subsidizing Medicare patients,” Scott said. “The market can only sustain that disparity for so long. At some point, the laws of economics will force the best-quality providers out of heavy Medicare practices and Medicare patients will suffer from compromised or reduced access to care.”
*American Society of Anesthesiologists. ASA units are anesthesia-specific codes of base units and, when appropriate, time units for the purpose of capturing and billing for anesthesia work.
The MGMA, founded in 1926, is the nation’s principal voice for medical group practice. MGMA’s 19,000 members manage and lead more than 11,500 organizations in which more than 237,000 physicians practice. MGMA’s core purpose is to improve the effectiveness of medical group practices and the knowledge and skills of the individuals who manage and lead them.
Source: MGMA