It is one of the most enduring challenges faced by the specialty and one unique to anesthesiology – the discrepancy in Medicare payments for anesthesia services known as the “33% Problem”. Whereas Medicare rates for other specialties represent between 75% and 85% of their commercial payment rates, payment for anesthesia services are less than one-third of commercial rates. In fact, it has been determined by some that the real number is likely now in the mid-20% range. ASA’s economic experts have been working ceaselessly to address this issue since the early 1990s, soon after the flawed Resource-Based Relative Value Scale was established in 1992. Today, ASA continues to devote significant resources to the 33% Problem, including through our Payment Progress Initiative (, and the issue has been explored extensively in the ASA Monitor (

This month, the Monitor reached out to two anesthesiology thought leaders who have long been intimate with the 33% Problem as both clinicians and health care executives. Below, Joanne Conroy, MD, President and CEO of Dartmouth-Hitchcock Health, and David Reich, MD, President and COO of The Mount Sinai Hospital, offer insights and possible solutions to the specialty’s lingering 33% Problem.

As a hospital executive, what is your perspective on the “33% Problem?”

Dr. Conroy: “This is not a new issue. It has been going on for years, and there are several factors at play. Number one, I’m not sure that people completely understand anesthesiology billing, which is very different than other billing processes. As a profession, we have debated for years whether or not to eliminate time units. Secondly, anesthesia delivers really important services, not all of which are reimbursed. We are a clinic model, and we pay for RVUs, but a lot of the RVUs are not reimbursed for many of our providers. Their activities, however, are very important to maintain and improve quality and access to care at our institutions. We could not run our inpatient services without these hospital-based specialties. In my opinion, insurers recognize this at some level. They know, whether or not they reimburse them appropriately, we will fill that gap so those providers actually have a market-competitive compensation.”

Dr. Reich: “The issue of Medicare reimbursement is a longstanding problem in anesthesiology, and a key factor remains educating the public and policymakers on the critical role safe anesthesia services play in the health care of this nation. We must do our best to ensure the quality and quantity of anesthesia services don’t decline as a result of this issue. Anesthesia departments and groups working with health systems must be up front about the challenges they are facing. To facilitate funds flow from a health system, it is important to exercise a high level of transparency and be willing to share details regarding income sources, including commercial and all federal payers. When the aggregate of all of the challenges faced by a department leads to a situation where a deficit might occur, it’s time to have an honest discussion with the health system to see if a stipend can be negotiated based upon a verifiable and reasonable set of formulas.”

How does this issue impact health care at an institutional level?

Dr. Reich: “Instability in an anesthesia department or group can lead to staffing challenges for perioperative and procedural services. As a result, the larger institution will suffer. Transparent communication regarding staffing requirements and fair market value analyses of regional and local reimbursement rates is critical so that facilities understand the issue and can help address provider needs. It is in a health system’s best interest to have smooth operations, and anesthesia services are key to that.”

Dr. Conroy: “Clinic models like ours pay based on our RVU. Whether they get paid for that RVU or not, they’ve delivered that service, and we make sure they get paid for it. When you have an exclusive contract with a private group, a different approach is taken. And so, the impact really depends on whether or not it is an integrated network or independent group. If you asked 50 CEOs who had independent medical groups with an exclusive contract, they would often say that the group that costs them the most is anesthesia. This can create a level of unnecessary conflict between the hospitals and anesthesia groups. I have seen more CEOs make bad decisions about their anesthesia groups than I have with any other specialty. It creates a level of conflict that can disrupt hospital operations. Therefore, it is important to identify and address the cause rather than just treating the symptom.”

Do you have any advice for anesthesiologists contending with this issue in practice?

Dr. Conroy: “Anesthesiologists demonstrated their value during the pandemic. Even though surgical volume dropped, they were available and providing services in many other ways. Anesthesiologists stepped into leadership roles and many teams were securing airways and keeping everyone safe. Now is the time for anesthesia departments to cement the relationship – that is based on transparency and trust – with their facility partners.”

Dr. Reich: “It goes back to having a seat at the table and being active participants in the operational concerns of the health system or hospital. Anesthesiologists are indispensable, but we have to demonstrate that on a daily basis, through our leadership in perioperative and procedural work. Be a key supporter of the organization. Be up front about workforce challenges. Recruitment and retention of anesthesiologists is a challenge. This is part of the reason why it’s important to be at the table, so that all stakeholders can communicate their needs and work together to find solutions.”