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From the *Division of Management Consulting, Departments of Anesthesia and Health Management and Policy, University of Iowa, Iowa; and Department of Anesthesiology, Jefferson Medical College, Philadelphia, Pennsylvania.
Address correspondence and reprint requests to Franklin Dexter, MD, PhD, Division of Management Consulting, Department of Anesthesia, University of Iowa, Iowa City, IA 52242. Address e-mail to Franklin-Dexter{at}UIowa.edu or web site www.FranklinDexter.net.
Abstract
Institutional support to anesthesia groups for clinical care is very common, particularly when compensation for certified registered nurse anesthetists and anesthesiology residents is considered. Poor contracts can reduce incentives for good operating room (OR) management. We show that two types of agreements for institutional support are rational, and that alternatives to those models increase profit for either the hospital or anesthesia group at the expense of the other. For both agreements, costs are based on survey data, not actual costs. Terms in equations are not recalculated regularly, thereby preventing undesirable incentives such as the anesthesia group profiting from reduced OR workload. Support is not based on hours worked late, because such an agreement would ignore the underutilized OR time sustained by the group. The support would create a disincentive to decision-making that would reduce overutilized OR time such as decreasing turnovers and starting add-on cases expeditiously. For groups with uncommonly low net collections, group profit is higher if the hospital provides support expected to assure a reasonable (fair) income for the group to recruit and retain members. For what is likely the majority of groups, with average net collections per anesthesia hour exceeding the hospital’s compensation per scheduled hour, expected profit is higher if institutional support is payment at a reasonable rate (fair market value) for the expected incremental hours of underutilized OR time (i.e., nonbillable idle time) caused by the specialty-specific staffing (i.e., OR allocations). Such an agreement creates incentives whereby the hospital and anesthesia group both profit from increased OR workload and from more accurate specialty-specific staffing.
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