Anesthesia has become increasingly consolidated in recent years as private-equity backed anesthesia groups have solidified their place in the industry — often leading to higher costs for ASCs facing other significant market pressures.
According to an April 2022 study published in JAMA, anesthesia prices increased an average of 26% when anesthesia companies, backed by private-equity investors, took over HOPDs or ASCs, compared with independent practices. About 20% of anesthesia practices made up private equity physician practice buyouts, according to the study, and about 33% of anesthesiologists were acquired by private equity physician practice buyouts.
But some see a major shift on the horizon. Aaron Kalin, DO, medical director and chair of anesthesiology at Adventist Health and Rideout in Marysville, Calif., told Becker’s that workforce demands and the need to better control anesthesia costs are driving a shift away from utilizing PE-backed groups and independent contractors back toward in-house anesthesia.
“When you look at the trend, long ago, you had partnership groups that quickly dissolved because there was no leader. [They were] democratic-run groups where you couldn’t get anything done, and you saw these partnerships dissolve,” he said. “Then you saw anesthesia groups, they were employed. Then you saw the private equity boom, and these PE companies bought up these little groups and wrote contracts with hospitals to manage the entire service line. Now you’re seeing a pendulum swinging back. Where I sit on the board of directors for a big integrated health system in California, we’re looking to start bringing anesthesia back in house.”
At the core of this shift is a need for ASCs to become more closely aligned with their anesthesia partners, as cohesion and collaboration between administrators and anesthesia providers becomes non-negotiable.
“You have this full arc. You went from a private partnership group all the way through employment, coming all the way back where everyone’s saying, ‘Where’s the value?’” he added. “And the real value is having aligned incentives. You have to take care of your people, but you have to have a seat at the table.”
Having aligned values with anesthesia providers will also become more essential as ASCs prepare for higher case volumes and acuity with CMS’ recently proposed addition of more than 250 procedures to the ASC covered procedures list.
“Anesthesia runs the perioperative surgical home. We run the preoperative optimization clinic to get these patients ready to come in for surgery,” he said. “So the trend is swinging back from partnership feedback — it’s now going towards, let’s bring anesthesia in-house.”