Want to save a quick $20 billion in healthcare?

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With or without repealing, replacing or revising the Affordable Care Act (ACA) there is another way to save $20 billion in healthcare. 

On Jan. 21, direct the secretary of Health and Human Services (HHS) to require Medicare and encourage every other insurance entity to stop paying for medical direction of certified registered nurse anesthetists. One anesthetic, one provider, one payment. Period.

{mosads}Thirty years ago, Certified Registered Nurse Anesthetists (CRNAs) were the first advanced practice nursing group to obtain direct reimbursement from Medicare. CRNAs are full service anesthesia providers who practice independently without physician supervision in many states and no state requires supervision by an anesthesiologist.

Prior to this regulation, only anesthesiologists were directly reimbursed. As part of the compromise to institute this new paradigm, anesthesiologists were given the ability to be reimbursed for medically directing as many as four CRNAs.

It was, and continues to be, an arbitrary and needless ratio. There was no evidence to support 1:4 or any other ratio as being safer.

In fact, legislators who wanted to hold anesthesiologists accountable for being paid to do something put it there! This scheme allowed anesthesiologists to collect double what they could if they performed the anesthetic themselves. Seven criteria were imposed in order for such reimbursement to be non-fraudulent, yet fraud has been and continues to be a very costly problem in reimbursement for anesthesia services.

Among the criteria is the requirement that an anesthesiologist be present at the beginning of an anesthetic. However, a recent study by anesthesiologists indicated that even at a ratio of 1:3 there was an average delay of 22 minutes waiting for an anesthesiologist to comply with the regulations.

While waiting, operating room charges are running at as much as $80 per minute — which makes anesthesia charges, also running at about $1 per minute, seem like a bargain. Multiply this by the estimated 15 million hospital operating room surgical procedures performed each year and the numbers are staggering: well over $20 billion in waste from one small segment of the healthcare delivery system.

Reimbursing for medical direction, except in cases of complexity or acuity, which can and should continue to be reimbursed at 100 percent per practitioner, or teaching anesthesia residents or student nurse anesthetists is wasteful and only incentivizes inefficiency with no increase in safety.

This further leads to hospital-paid anesthesia group stipends (entitlements), often at additional taxpayer expense. Also, keep in mind that training anesthesiologists is paid for by taxpayer funded Graduate Medical Education dollars, while CRNAs pay for their training mostly out-of-pocket at no cost to taxpayers. 

Recently the American Association of Anesthesiologists (ASA) has been promoting the concept of the PeriOperative Surgical Home (PSH) as a more efficient and cost-effective method of administration and reimbursement of anesthesia services in the U.S.

While the PSH might gain some utilization in larger hospitals and Accountable Care Organizations (a product of the soon-to-be-defunct ACA) willing to accept bundled payments, that is not the venue where most anesthetics will be provided. Currently, there is no real mechanism for reimbursement for these PSH anesthesia services outside of bundling and there are a plethora of surgical hospitalists and intensivists who already manage many of these activities.

But this new scheme misses the point and the huge opportunity to truly impact efficiency and cost effectiveness without compromising quality or access.

Removing payment for medical direction (except for the situations noted above): 

  1. Cuts costs dramatically for facilities and taxpayers

  2. Does not decrease safety

  3. Promotes proper utilization of the two independent, fully-trained, full-service, highly skilled anesthesia providers in the U.S.

  4. Drastically reduces or eliminates any current or projected provider shortages

  5. Eliminates fraud in anesthesia billing

If, for some reason, a hospital wishes to continue with arbitrary, costly staffing ratios that do nothing to increase safety, or access or to improve patient outcomes, then it can certainly pay for it. But this one simple change virtually mandates the kinds of efficiencies that the PSH can only flirt with.

Surgeons do surgery, radiologists read X-rays and pathologists evaluate tissue specimens. Why don’t highly skilled anesthesiologists — trained at taxpayer expense — do anesthesia instead of medically directing? Eliminating payment for medical direction will assure that all those highly competent, and thoroughly anesthesiologists trained to provide the full range of anesthesia services will actually provide them.

There are additional bonuses as larger facilities streamline their anesthesia services and unneeded providers relocate to underserved areas, increasing access to care. Competition to provide services will increase and facilities will have more options to customize personnel and practice models.

Patient wait times in cold and anxiety-producing operating rooms will be eliminated. The anesthesia professional guilds — the ASA and the American Association of Nurse Anesthetists — can stop wasting time and money on turf battles and denigrating each other and devote themselves to patient care and research, and there’s that $20 billion or so in savings.

These solutions will not be greeted with much enthusiasm from the darn-near-socialist professional trade associations. There is too much money and power involved and generations of ill will for them to abandon their deeply entrenched beliefs and talking points.

However, neither they nor our patient population can afford the current unsustainable, inefficient and costly model of anesthesia services and reimbursement.

Twenty billion dollars in immediate savings isn’t that huge in the macro-economic sense, but it’s a damn fine way to start your first day in office.

Jay Horowitz is CRNA ARNP lives in Florida and has been in practice for 30 years.


The views expressed by contributors are their own and not the views of The Hill.

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