Anesthesia challenges piling up

From reimbursement declines to provider shortages, anesthesia leaders are facing new and longstanding challenges.

Anesthesia reimbursements are facing a sharp decline.

CMS anesthesia reimbursements declined 8.2% from 2019 to 2024 — from $22.27 per unit to $20.44, VMG Health said in a May blog post. Another report from Coronis Health found that if an anesthesia provider generates 10,000 billable units from Medicare, the total revenue potential is only $218,000, assuming that all revenue could be collected.

Private payers are also cutting pay for reimbursements. Anthem Blue Cross Blue Shield’s health plans in Ohio, Missouri, Connecticut, New York, Nevada, and Maine will reduce QZ services performed by certified registered nurse anesthetists to 85% of the physician fee schedule beginning Nov. 1. Additionally, Cigna announced in March 2023 it was lowering the reimbursements for non-medically directed procedures performed by CRNAs by 15%.

“Anesthesia reimbursements continue to be misunderstood by CMS, insurers and even our own colleagues,” Thomas Durick, MD, anesthesiologist at Columbus-based Ohio State University Wexner Medical Center, told Becker’s. “We allow the government and insurance companies to dictate what our services are worth (such as the recent bundling of ultrasound services into the most commonly performed regional anesthesia procedures for a reduced total reimbursement). We do the same (or more) work each year for less reimbursement and more challenges to get paid. Until we fight to be seen as more than nameless, faceless plunger pushers with opposable thumbs, we will remain in the shadows.”

The anesthesia provider pool is shrinking.

There is also an increasing shortage of anesthesia providers. Nearly 30% of anesthesiologists are projected to leave the practice by 2033, according to a white paper from Medicus Healthcare Solutions. Additionally, there are currently over 7,700 people per one anesthesiologist in the U.S, while over 17% of current providers are nearing retirement and over 56% are over 55.

And more anesthesiologists are leaving the field. More than 2,872 anesthesiologists left the workforce from 2021 to 2022, according to a report from Definitive Healthcare.

There’s also fewer new anesthesia providers. There are 172 anesthesia residency programs in the U.S, with 1,609 positions offered. In 2023, of 1,353 medical students seeking an anesthesiology residency, 46% did not match.

Anesthesia demand is growing.

ASC and office-based procedure growth has made surgeries more accessible, but the explosion of outpatient care has spread the existing pool of anesthesiologists even thinner.

“Now, you’re not just running 12 operating rooms, you’re running 12 operating rooms and six rooms over at that ASC,” Mark Thoma, MD, and chair of anesthesia at San Francisco-based The Permanente Medical Group told Becker’s. “Maybe you need at least 18 people in the morning instead of 12, and where are they coming in? Whether it’s an anesthesia practice or whether an anesthesia care team with [certified registered nurse anesthetists], you just need those bodies. Within the hospital, we’re seeing the horizontal explosion of non-OR anesthesia – so catheterization labs, gastroenterology, interventional radiology, etc.”

Anesthesiologists are facing rising levels of burnout. 

Over 50% of anesthesiologists said they felt burnt out or both burnt out and depressed, according to a 2024 Medscape survey. This is a slight increase from last year’s survey, when 47% of anesthesiologists reported being burned out.

Fifty-four percent of anesthesiologists attributed their burnout to a lack of control or autonomy over their life and 44% attributed it to too many hours at work.

The No Surprises Act is creating obstacles to secure reimbursements.

The No Surprises Act and its independent dispute resolution process have created even more obstacles to secure reimbursements.

The act has “led to unintended consequences for anesthesia providers,” and the IDR process has been used by payers to “reduce reimbursement by refusing to go in network with anesthesia providers,” according to VMG Health’s 2023 “Physician Alignment: Tips & Trends” report.

An influx of private equity interest is affecting the industry.

Anesthesiology practices are facing challenges as more groups look to private equity for financial profitability.

Around 20% of anesthesia practices make up private equity physician practice buyouts, according to a study published in JAMA Network in February 2020. The study also found that 33% of anesthesiologists have been acquired by a private equity physician practice buyout. However, as anesthesia provider salaries grow and reimbursements decline, investors are pressed for ways to enhance revenue.

“If you Google search right now on private equity and anesthesia, you won’t find a single positive story going on in the market,” Jack Dillon, CEO of Anesthesia Practice Consultants, said in a June Becker’s panel. “It’s all pretty devastating to communities.”

Private equity has led to higher patient costs and lower care quality. Another JAMA study, published in 2022, found that prices increased 26% on average when anesthesia companies, backed by private-equity investors, took over a hospital outpatient or surgery center compared with independent practices.

Many ASCs can’t afford the rising cost to provide anesthesia.

ASCs are struggling to afford to pay anesthesiologists as costs soar.

“Anesthesia used to be a seemingly unlimited commodity,” Jeff Dottl, principal at Ventura, Calif.-based Physicians Surgery Centers, told Becker’s. “They were lucky to be invited to work at your surgery center. The tables have turned, and now if centers have anyone to cover anesthesia, it usually comes at a hefty price.”