Successfully Negotiating Anesthesia Service Agreements Post-COVID

Successfully Negotiating Anesthesia Service Agreements Post-COVID

The healthcare environment is constantly changing — and the payment landscape is no exception. As hospitals slowly emerge from COVID, managing precious resources has never been more important — shining a light on anesthesia service agreements. 

A new challenge facing hospitals is the high number of anesthesia providers retiring post-COVID and the rapidly escalating compensation demands for anesthesiologists.   More and more hospitals are being faced with anesthesia as the rate-limiting factor for surgery as groups are saying “this is how many people you can have today”.   Sometimes this is temporary, but in many cases, it’s permanent and often leading to a formal breach of contract notices.  

Anesthesia is the lowest reimbursed service in healthcare which gives rise to the unique subsidy approach in the contracting process.  Hospital leaders must adequately prepare for anesthesia contract negotiations to secure good rates with the provider groups.  And like so many other negotiations, knowledge is power.  

How Long Do Contract Negotiations Take?

Anesthesia contract negotiations can be lengthy and expensive, especially if a hospital is changing groups altogether (the ‘nuclear option’). On average, negotiations can take 6-9 months to hire a new group. This can kill productivity as the old group leaves under unfavorable circumstances and given there is also ramp-up time involved in the onboarding process for the new providers. 

Given the lack of available providers nationally, groups must come to terms with different staffing models, more incentive-based subsidies, and in many cases longer hours for significantly higher compensation.  

Read, ‘5 Tips for Increased Anesthesia Program Efficiency.’

Honest Broker for Your Anesthesia Contract Negotiations

Because changing anesthesia provider groups is so traumatic, hospitals and providers can both benefit from a third-party intermediary who can align stakeholders and keep the process on track.  

Sullivan Healthcare Consulting (SHC) can be the honest broker in contract negotiations with your current anesthesia group. It is often prudent to avoid the RFP process altogether, and in this scenario, our experts can bridge negotiations—working towards a mutually beneficial outcome to save goodwill, time, and money. SHC is discrete and you can be confident in our ability to remain neutral and ensure billing/recovery is fair and transparent. 

How Sullivan Healthcare Consulting Can Save You Money

SHC offers comprehensive operational anesthesia consulting services customized to each client’s specific needs. Our primary offering is an Anesthesiology Department Assessment that focuses on improving anesthesia provider efficiency and reducing hospital costs in the operating room and other anesthesia delivery areas.

We help to turn your anesthesia department into partners dedicated to growing your surgery business.

How We Save You Money

  • Identify how many locations are running
  • Document hours of utilization and capacity
  • Verify level of service to ask for in an RFP
  • Determine any instances of double subsiding the same people
  • Identify how many anesthesia groups you’re using
  • Understand payor mix 

Sullivan Healthcare Consulting: Realistic & Sustainable Outcomes

SHC brings a much broader and national view of anesthesia, having worked in thousands of ORs over many years. We have seen every possible scenario when it comes to anesthesia: the good, the bad, and the most inefficient. Our team understands that anesthesia does not exist in a vacuum and that a 360-degree approach to evaluation is critical to sustainable success. We operate under a holistic and strategic lens — uncovering root causes and implementing achievable long-term solutions. 

To learn more about our anesthesia consulting services and how Sullivan can help improve your organization’s performance, contact us today

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