Anesthesiology in the United States seems to be in crisis.
Partly as a result of pandemic effects that drove doctors to leave the profession or cut back hours, and partly because of the pandemic’s effects on hospital finances, anesthesiologists and surgeons who use anesthesiologists in several states told us they were seeing danger signals that are affecting patients — delayed surgeries, fewer practitioners, longer hours, shorter paychecks.
Another factor in the changing landscape is the increasing appetite from private equity investors to buy anesthesia practices, these doctors said. And as always, the structure of the U.S. healthcare system comes into play — with competition for money driving a lot of decisions.
I spoke to three anesthesiologists in different parts of the country. Here are their stories.
Patients waiting for surgery
“We can’t get enough coverage for our surgery center,” said an ophthalmologist in central Illinois who spoke on condition of anonymity in a phone interview so he could be candid without affecting his job. “Now we have to consider hiring nurse anesthetists so our patients aren’t waiting months for their surgery.”
He said his impression is that this is true elsewhere across the country, for two reasons. “Covid had a big part to play, and also private equity groups are buying up anesthesiology practices,” he said. “Their motivation is to make money, cut corners and increase profits.”
He pointed to an organization called North American Partners in Anesthesia, which is “the nation’s largest anesthesia staffing company, employing 6,000 clinicians at 500 facilities in 21 states,” according to NBC News. “The company is owned by two well-heeled private-equity firms, American Securities of New York City and Leonard Green & Partners in Los Angeles. Four of N.A.P.A.’s nine directors are private-equity executives.”
The ophthalmologist said his center has noticed a shortage, with the anesthesia group they contract with unable to provide services on Mondays. About a month ago, he said, that cut them back from four days a week of surgery to three. Now he and other ophthalmologists have agreed to take training in Advanced Cardiac Life Support, a certification required so they can supervise nurse anesthetists, who have lower qualifications than full M.D. anesthetists, and who are expected to fill the gap on Mondays.
He also operates at hospitals, he said, and the hospital-based locations use nurse anesthetists. So he’s comfortable working with nurse anesthetists.
Nurse anesthetists instead of anesthesiologists
“I do cataract surgery,” he said. “It’s light sedation. Most people can handle that. But anesthesiologists are concerned about their jobs. They feel that nurse anesthetists are pushing them out.” Cataract surgery takes about 10 minutes, he said, and the anesthesia is twilight or conscious sedation, not general anesthetic. The medications are “a touch of versed and a touch of fentanyl,” he added.
He said he has friends who are also surgeons who think an anesthesiologist should be present at, for example, a colonoscopy, but instead many gastrointestinal practices are also using nurse anesthetists.
The anesthesiologist shortage is happening in various places nationwide, he said he has heard. “Before Covid, we didn’t have any issues that I was aware of. It’s in the last six months or so that we have been feeling the crunch a little, and it was a month or so ago that we went to three days a week instead of the regular four,” he said in mid-March.
Private equity buying practices
Private equity has also been seeking to buy ophthalmology practices, he said. In fact his group considered a private equity sale. “They offer a big lump sum buyout, but then you are an indentured servant for a number of years,” he said. “They change the whole outlook of a practice.”
One of his friends, in a gastroenterology group that sold not long ago to private equity, told him “she just hates it.”
“A lot of doctors don’t know what they’re getting into with private equity,” he said. “They see the big dollar signs in the offer for the buyout. But they are myopic. Once they’re knee-deep, they realize that yes, this was a mistake. But then it’s the point of no return.”
N.A.P.A. has come under criticism in New Jersey, in an NBC News article about anesthesiologists in private equity practice, with a hospital suing N.A.P.A., alleging that its severe understaffing “put its own profits ahead of the hospital’s patients.” Hospitals in Pennsylvania and Nevada also had publicized problems with N.A.P.A., the NBC article said.
Private equity companies have bought practices in the fields of emergency medicine, dermatology, dentistry, hospice care, gastroenterology, veterinary care, substance abuse treatment and other fields. Private equity purchases in many areas of business usually involve the P.E. firm coming in, saying they’ll streamline and increase profitability and efficiency — and then loading up on debt, collecting money and getting out.
“In the healthcare sphere, private equity has tended to find legal ways to bill more for medical services: trimming services that don’t turn a profit, cutting staff, or employing personnel with less training to perform skilled jobs — actions that may put patients at risk, critics say,” Kaiser Health News reported. “KHN, in a series of articles published this year, has examined a range of private equity forays into health care, from its marketing of America’s top-selling emergency contraception pill to buying up whole chains of ophthalmology and gastroenterology practices and investing in the booming hospice care industry and even funeral homes.”
Covid and pay rates affect another group
Another anesthesiologist, this one from a small private group that works servicing one hospital in an urban location in Washington State, said his group is also in crisis. He cited low Medicare and Medicaid reimbursements as one factor — with them paying 20 cents on the dollar compared to private insurance. His hospital has a substantial number of Medicare and Medicaid patients. That means they have less money to pay staff, so they’re less able to compete for employees on pay.
“After Covid, a lot of folks got out of the field,” he said, also speaking on condition of anonymity to protect his job. “Suddenly there’s a shortage of anesthesiologists and [certified registered nurse anesthetists]. Then other hospitals started offering more and more money to bring anesthesia providers in. We started losing people — we were not able to recruit, if you could work across the street and make 20 percent more.
“We approached the hospital with this problem and they said, ‘That’s nice.'”
As a result, he said, over the last six months, the group that was at 32 full-time equivalents is now down to about 12. They lost five members to cross-town jobs, a couple to retirement, and a few new hires decided to move out of state to other jobs; some are retiring but have not announced yet, he said. A few went to “locum tenens,” which is the name for traveling work.
“We are trying to decide if this group is viable,” he said. “The hospital is going to offer more money, but is it enough money to start hiring and retaining in a meaningful manner?”
He has thought about leaving, and says it’s on his “to-do list.” He’s looked at other jobs in town, but “other hospitals are a different flavor of dysfunction.” He doesn’t want to move and uproot his family, and he’s not excited about going to a locums role, either locally or traveling more widely.
Covid’s effects on the profession
How big a factor was Covid? “We didn’t lose anyone in our group,” he said. “Watching the news, it sounds like a lot of folks who were close to retiring, it pushed them over. Covid was maybe not the cause, but more the unmasking of burnout rates across healthcare — not just anesthesia but also others.
“Physicians derive a lot of their being from what they do,” he said. “But because there are more corporate physicians, employees, worker bees, tools, just providers — we don’t have the autonomy to do our work the way we used to, and that takes a lot of the joy out of it.”
Are other specialties in his hospital affected in the same way? No, he said. “Most of them are hospital employees, and the hospital already has their paycheck. But for us, they are saying, ‘You are private contractors. It is your job to take care of this. We are not going to supplement you.’ “
As the anesthesia group staff hemorrhage continues, he said, they are considering that they may not meet the “minimum call” obligation to staff operating rooms for the hospital. “We are at the onerous level right now, but at some point it’s going to be impossible to staff,” he said.
Cutting back on surgery
“We have cut back significantly on surgery. Historically we staffed 18 or 19 rooms a day. We are now staffing 10 or 11.” This may mean, he said, that surgeries are delayed. The hospital is trying to bring in temporary locums staff, but that level is under negotiation with the hospital — will the locums staff replace his group’s staff going forward, and how will the money work?
Meanwhile, he said, patients are waiting. “We have surgeons with six-month backlogs. They are trying to work through the Covid backlog. Clinics are understaffed because there is a huge nursing shortage. It’s a big question which bottleneck is the worst bottleneck at the moment.”
Surgery levels have been reduced because of Covid, and that has affected his income for several years.
How much does private equity affect this problem? “We hear the private equity nightmares — groups selling to P.E. and cutting staffing levels and squeezing hours, and squeezing pay as much as they can,” he said. “Though from a societal standpoint, P.E. buying anesthesia is not affecting as much as emergency room. You have to have one body per patient for anesthesia.”
There’s one silver lining, he said. “Right now, the demand for anesthesiologists is so high that I could have another job in three weeks. There’s a fair amount of comfort there, but the question is what job and where?”
“If you have a good payer mix — that means, fewer Medicare and Medicaid patients, and more private insurance — the reimbursements can be fairly substantial,” he said of doctors assessing their paycheck or potential paycheck for a job. “For a private gastroenterology office, they reimburse anesthesiologists pretty well for how long they take.
“You don’t want my hospital, with a large indigent population and emergency and trauma care.”
At a Midwest practice, ‘doing better than most’
A third anesthesiologist, this one from the Midwest, also speaking on the condition of anonymity to protect his job, is in a private practice that serves one hospital. He said his private practice has spent a lot of time to make it so “we are almost impossible for the hospital to replace.”
It has been a struggle, he said — in fact, it’s “always a fight.”
About 10 years ago, he said, the hospital was looking to save money and go with a different model than his private practice. “That pushed us to take ownership in the hospital,” he said. “We’ve been on committees. We have a presence. We grew from 20 to 42 people.” As a result of this fight to maintain autonomy, he said, “I think we’re doing better than most programs out there,” though “we are less profitable than we were five years ago.”
Hospitals are making less money, he said, because they were hit hard by Covid and the resulting limitations on surgery. Beyond that, he said: “We’re a necessary evil to most hospitals. We don’t bring in patients, but we’re a vital part to keep the operating room going.”
His private practice is unusual broadly in that it is not hospital-employed, he said. Maybe 5 percent of groups nationwide are doing that. The hospital pays them nothing; they bill patients directly.
“Our group would make more money than a lot of the other employed groups in the area, but we probably work a certain percentage more hours than others,” he said.
Private equity tried to buy them
Several years ago, when the hospital was looking to make a change, the N.A.P.A. management was “poking their head in, looking to acquire our group,” he said.
N.A.P.A. was brought in by the hospital to buy the practice out, he said, “But we said no, and the surgeons said no.”
In a compromise, he said, N.A.P.A. took a management stake for a year. “We lost about six figures of income from improper billing,” he said. “We got rid of them after a year. We saw just how poorly they managed it, and more importantly, how poorly they bill. It was introducing one more element of waste into the system.”
As a result, he said, his practice “started our own anesthesia management company, and it’s going well.”
Covid changed work-life balance
Is anesthesia an outlier in terms of medical specialties in undergoing something of a crisis?
“I have friends across a whole cross-section of specialties,” he said, adding that he’s around 5 years away from retirement. “As a whole, Covid hasn’t changed the work. We still have a lot. But when we had that little break from Covid, it was eye-opening for my generation to have a little pause, and the idea that I might want to work a little less. That was really good.
“But Covid decimated our nursing staff and surgical tech staff. Our operating rooms are much less efficient. We are seeing millennial surgeons who are incredibly slow, and who also have a different idea of work-life balance.
“Our workday is much less efficient — fewer cases, or if it’s the same number of cases, it’s longer and less efficient because of the problems with nurses and surgical techs.
“Another element — with the work restrictions placed on residents, they come out of training not ready to hit the ground running. A gall bladder that we thought should be 45 minutes is now three hours.”
Other specialties have also been hit in his hospital, he said. “I’ve seen our cardiology group get decimated. We lost a 30-man cardiology group. Now we have a revolving door of locums covering cardiology. They are trying to recruit a team, but they’re just not being successful.”
Change in hospital economics
The economics of hospitals have changed with the pandemic, he pointed out. “With Covid, a lot of hospitals lost a ton of money when the operating room shut down. The hospitals became busy with things that didn’t yield a lot of billing — anesthesia, radiology, the E.R. — the groups that don’t bring revenue in, but have to be staffed. They’ve tried to squeeze profits out of different areas.”
Another trend he has noticed is the “exponential rise” in administration in hospitals: “The medical community and the administration will always be butting heads. They look at hospitals as a corporation. We look at it as human patient care.”
When administrators say they are after “100 percent patient care, their actions indicate that it is 100 percent bottom line,” he said.
In the pressure to save money, he said, “they are creating areas that are so unappealing to work in that the only people they can attract to work there will be locums, because they have flamed out other places.” Inevitably, patients will bear the brunt, he said.
The private equity groups like N.A.P.A., based in Long Island, N.Y., are scooping up more and more anesthesiology practices, he said, with promises of a lot of money. But at some point after that happens, the remaining doctors realize that the business model “is not built for sustainable growth, and groups are struggling to find new partners and keep employees,” he said. A group goes from 10 people to 8 people to 6 people, and then recruitment becomes much more difficult, especially in a place outside of major metropolitan areas.
The initial offer to buy a practice out promises a bonus of a couple of million dollars, he said. “Then for the next few years, you’ll be underpaid by a couple of million dollars. It’s a wash.
“It’s basically a way of sending money from [his city] to Long Island,” he said. “For P.E., their goal is to make money.”