9 Steps to Negotiate an Anesthesia Stipend
Anesthesia services are integral to the success of hospitals and ambulatory surgery centers (ASCs). However, over 90% of all anesthesia providers receive financial support from the facilities where they provide coverage, making negotiations around a fair market value (FMV) anesthesia stipend a critical component of sustaining both the facility and the anesthesia group.
Today, anesthesia groups face significant financial challenges. Physician, CRNA (Certified Registered Nurse Anesthetist), and AA (Anesthesiologist Assistant) salaries are on the rise due to a growing shortage of anesthesia providers. Meanwhile, reimbursements from Medicare and other payors continue to decline, creating a difficult financial landscape. Ensuring the financial viability of anesthesia groups while maintaining service quality requires an effective stipend negotiation process.
At Lumina Health Partners, we’ve worked with hundreds of groups and have found the following seven-step process to be highly effective when negotiating anesthesia stipends.
1. Define Anesthesia Service Needs
The first step is to clearly outline the anesthesia service requirements, which will form the basis of your negotiation. This includes:
- Determining the number of operating rooms (OR) running by time of day and day of the week.
- Assessing the number of out-of-OR locations (e.g., labor and delivery, endoscopy) that require anesthesia coverage by time of day and day of the week.
- Identifying daily call requirements and the expected response times.
A clear understanding of these needs ensures that staffing and resource allocation are aligned with the facility’s operational demands.
2. Define the Number of Anesthesia Providers Required
Once service needs are established, it’s essential to define the exact number of anesthesia providers required to meet those needs. This includes:
- Calculating how many physicians, CRNAs, AAs, and residents are required on a daily basis.
- Accounting for full-time equivalents (FTEs) needed to cover paid time off (PTO) and other leave.
Having an accurate staffing plan ensures that there are no gaps in coverage, while also preventing the overstaffing that can strain the facility's budget.
3. Identify Opportunities to Reduce Service Needs
Efficiency improvements can often reduce service needs, which, in turn, can lower the overall stipend required. Key areas to evaluate include:
- Improving block time utilization to ensure that ORs are being used efficiently.
- Tightening flip room allocations to minimize downtime between cases.
This not only reduces costs but can also improve perioperative efficiency, leading to better patient outcomes and satisfaction.
4. Define the Cost of Anesthesia Coverage
Next, it’s important to calculate the total cost of providing anesthesia services. This includes:
- Benchmarking appropriate compensation levels for physicians, CRNAs, and AAs based on market data.
- Considering additional costs such as overhead, including administrative support, malpractice insurance, and other operational expenses.
Understanding these costs provides a solid foundation for the financial discussions that will follow.
5. Determine Current Anesthesia Collections by Payor
Assessing the current collections is crucial to understanding the revenue side of the equation. This provides a baseline of what the anesthesia group is earning for the services provided.
6. Identify Opportunities to Improve Collections
There may be opportunities to increase revenue by improving collection rates. To explore this:
- Review existing contracts with payors to see if reimbursement rates can be renegotiated.
- Identify ways to enhance the net collection ratio by reducing denials, improving billing practices, and optimizing coding.
Higher collections may reduce the stipend amount needed to cover any financial gaps.
7. Define the Difference Between Collections and Costs
Finally, calculate the difference between the group’s current collections and the total costs of providing anesthesia coverage. This gap will help determine the size of the stipend. It’s also useful to assess the difference between optimal collections and optimal costs to see if there’s potential for further improvements.
8. Structure the Stipend
In most cases, anesthesia stipends are composed of two parts:
- A fixed monthly payment that ensures financial stability for the group.
- A variable portion tied to meeting performance expectations, such as reducing OR turnover time or improving patient satisfaction scores.
This structure incentivizes the anesthesia group to continuously improve efficiency while ensuring they are fairly compensated for their services.
9. Create a Collaborative Environment
The stipend negotiation process offers an opportunity for anesthesia groups and hospitals or ASCs to have productive discussions on how to improve perioperative efficiency, enhance patient care, and create a positive work environment that attracts and retains top-tier anesthesia providers.
SUMMARY
By following this structured, data-driven approach, both parties can reach a fair and sustainable financial agreement, ensuring long-term success.
For more information about our anesthesia services and how Lumina Health Partners can help guide you through stipend negotiations, visit our anesthesia services page.