Scrub In Podcast | Anesthesiology Is No Longer a Vendor Management Problem

Welcome to Scrub In the surgical directions podcast, examining the clinical, operational, and financial forces shaping surgical care. Today, we are discussing why anesthesiology is no longer simply a staffing, contracting, vendor selection issue, and what hospital leaders should consider before changing groups, employing clinicians, or redesigning their delivery model. And today on the call, we have two of my colleagues from surgical directions, and I will pass over them to introduce themselves.

Hi, I’m Renaye Jenkins and I am the senior anesthesia consultant, and my background is in anesthesia business operations.

Hi, Joe Rodrigo, I’m an anesthesiologist and I work with surgical directions as a physician consultant in anesthesiology.

Perfect well, thanks for both of you being here with me. And I’m hoping we have a nice chat here about the challenges today that we’re seeing in anesthesia. So question one Joe, Renaye and feel free to answer whatever order you’d like. In your opinion, what has changed the most significantly in the anesthesia market and why is it no longer just a coverage issues for hospitals and health systems?

I really do think that the reimbursement issue has caused and impacted the market, as well as the supply of anesthesiologists and CRNAs. And so with that, it’s created that access issue, which has also created other issues is how can anesthesia create more value now that it’s more of a costly service. So I’ll pause there and let Joe give his commentary on that.

Yeah, I agree, Renaye. I think what we’re seeing now is changing of the times. We’re also in a staffing shortage, both due to natural attrition, people retiring, moving on from medicine or unnatural attrition where we saw during COVID, where a lot of people got out of medicine prematurely and we just haven’t been able to keep up with the supply and demand.

And as the supply goes down and the demand goes up, obviously it’s the market’s great for the providers which increase costs back to the health care system. And so, that’s right. Now that’s probably the most glaring obvious thing out there that people are noticing is there’s just not enough providers to go around to be able to supply the services to the hospital systems.

Yeah, I couldn’t agree more. And I think you both hinted at it. I think the big thing is the economics of anesthesia. Just the math is not matching at this point right. Reimbursement from CMS is declined, from the private payers that has been essentially flat with maybe a little improvement. But neither one has come up with the kept up with the inflationary reimbursement pressures that we’re seeing from the provider side, right?

So, I think all of us here are most concerned with patient care, but there is a large economic portion of this that just is not keeping up and creating this really pretty severe supply demand shortage. Locums, premium pay, variable pay, extra hours, closing hours, all of this is leading to a very challenging combination of factors.

Jason, I think you hit on a really good point, locums. If you think five to seven years back and the number of locums companies that we had and what locums truly meant. Locums meant that you didn’t know what you were going to get consistency, you didn’t know if they were going to be the best of the clinical practice.

But now what you see is a lot of your great practicing physicians and APPs are going to locums. And that’s further creating this issue to where the practice management companies or the hospitals are really having a hard time competing. Because the locums know that because of the specialty, they support, they can pay more and charge more. And so that is also causing an issue with what’s changing and impacting the market so much.

Yeah, absolutely. I’ll follow up on that Renaye too, and you’re right. We’ve got providers now choosing locums as a lifestyle and as a career path, as opposed to working with one group or a management company or facility and just remaining there.

A lot of these providers got the taste of locums during COVID and decided one they liked it. They don’t like to have the commitment to one single employer and two, the financial ramifications. Financially, it’s very lucrative, or it can be very lucrative in certain areas of the country.

And so that further stresses the local systems of having a staff, a consistent staff that’s there. And now they’re into the locums market to get these really good quality providers that may or may not stay around for a while, but then they’re also paying the extra premium rate for these providers.

We started the show with this first question was, what’s the problem. And I think there’s multiple layers to this. But if one word comes to mind, it’s migratory, as far as the workforce. I think that is a reality. There is a significant portion of the workforce like Joe and Renaye, you both said that 1099 non-committed for extended periods of time work situation.

And I think it leads to a couple of things. One thing that I see is I have a lot of hospital systems that are asking me how they can eliminate locums. I really think we have to start asking ourselves if that’s the right question. I don’t think in this current environment you can eliminate locums, and I don’t really think it should be a goal.

I think it should be understanding how I can work with locums and have some strategies for cost containment, have some strategies for locums to W-2 or more permanent placements. I see silos occurring where there’s people in financial roles or other administrative roles that are saying, we need to get rid of locums. And then we have operators and people in the field saying, well, they are an essential part of our system and they are essential to keep our operating rooms open.

And, I see that as a really big disconnect in the market right now, especially with some of the larger systems. You got one part of leadership saying, we need to get rid of locums. We have another saying we need to keep OR doors open for our patients and our surgeons. And the two aren’t necessarily co-existing well, right? So I just think that there’s a bigger picture here that a lot of the hospitals and health systems that I go to are missing. And I’d love your reaction to that from the two of you.

No, I think you’re absolutely right. I think that the days of saying that, getting rid of the locums, I think now it’s a matter of how do we mitigate it’s not the fact that they’re going to go away, but what is the norm, right? What is this new norm in regards to. Because you have people, like you said Jason, that is their way of life, that is their career path.

And so it’s finding a solution and how agile are you as an organization going to be. Because if you don’t have a solution to the 1099, to the factor of them being able to have that agility to be able to work at multiple locations, then locums will become part of that norm. And then the strategy is, how do we mitigate that.

Exactly. It’s how do you balance all these different types of providers within your system. Because I think it’s going to be very difficult in the future to have a stable workforce, it’s only W-2 or only committed to you. So the administrators now have to look at, well, how do we mitigate it. Like you said, how do we make this all work together and blend it together.

And unfortunately it’s difficult with the premium rates the local providers require and then direct 1099 versus W-2 employment, they all don’t really mix together well. There’s animosity amongst the different groups. But I think we’re in the period of time where there’s no way you’re going to be able to function in certain size systems without locums or without 1099 contractors. It’s just, this is not 2000, 2005. And we all had, permanent jobs and most places were staffed really well. It’s a different world right now.

Yeah. Laugh being the vintage I am. Online dating was so taboo back in the day. That has changed, and so have locums. I mean, it’s no longer a fringe part of anesthesia staffing. It is a desirable place for a lot of our providers to be and we just have to recognize that.

Joe, you’ve done an amazing job at some of our clients with locum strategy and partnerships and finding the right partnerships. And I know we may not be following script here, but I think it’d be a key moment for you just talk for a minute or two about some of the things you think about when thinking about locums and locums vendors, and the advantages of some over others.

Yeah, absolutely. Fortunately or unfortunately, I’ve had the opportunity to work with, quite a few locums companies, big large companies, medium sized companies, small kind of mom and pop type of companies. And when we’re putting together a locum staffing plan during a transition what our needs are and how we’re going to go about recruitment of these providers.

First and foremost is I want to partner with a company that I trust, the leadership of the company. So the ones that are more physician owned or provider owned, those providers that still are actually doing some clinical work, I think they’ve got a better finger on the pulse of what the nature is. And then I also feel like those companies attract higher quality providers because they are able to vet these providers better than some of the other companies that are in it, just for sheer profit.

So you have a business person trying to vet the qualifications and skill sets of a provider and they’ll give them a piece of paper and the provider will fill out their answers of what they do, what they don’t do, what they’re good at, what they’re not good at. But they really don’t know the questions to ask, or they really don’t know how to look into, what these providers have done in the past and assess the cases they’ve done, case logs and things like that to really make sure the right– you’re finding the right provider, that’s the right fit for that location.

Skill sets, abilities, tasks, desire to work, certain shifts, or they might not want to work certain shifts. For example, cardiac providers are pretty rare. And their skill sets can range from, I do some hearts to I do heart transplants and very, very complex things. Pediatrics providers or even general providers that have skill sets of acute pain, nerve block skills do a lot of obstetrics where they’re really good with epidurals and spinals.

All of those little things mean a lot. So when you’re looking at a program and assessing what needs they are, how many local providers, what services do we have to cover, what are the shifts. It’s really important to one understand the client and exactly what they need and what the skill sets are, and really work hand in hand with these locums companies to find those right providers.

And I’m honest with the administrations that are going through these transitions that you’re going to bring in, these providers anticipate about 25% of them are not going to be there very long. Because they’re either not going to be a cultural fit, they’re not going to be a skill set fit, or maybe just whatever reason, it’s not the right place for them to be. So there’s going to be a lot of turnover, so you’ve got to set the expectations as well.

That’s great. Switch subjects in just a minute. But vendor management systems that is a big word as a lot of the larger systems start talking about locums right. And what locums vendors have good VMS, which ones don’t, how does that? Renaye or Joe, I’d love to hear your thoughts on VMS. And I know enough about it to be dangerous, but just your thoughts on how it incorporates into this large puzzle of vendors and locums.

Yeah, I’ll be brief, and then I’ll let Joe, since he has a lot of experience. But what I will say, with vendor management, it’s all about transparency, right? Be honest with me as a client and help me to understand what are all of the factors that are built in. How are you going to help me with making sure that there’s the consistency of follow through. You resolving conflict or issues or those type of things.

Really understanding what are my needs and are you trying to respond to them rather than trying to just have a warm body. You in the vendor management I’ve worked with, companies that are really great partners. And I think that’s where it really begins with. Like, are you a partner, are you someone that’s going to respond when I reach out, is it the fact that we’re going to play this game that you’re going to ignore me.

And that’s really what it’s about, from whether or not if you are a vendor with the hospital or you’re a locums vendor, what does partnership mean? Because a lot of people throw out that word, but they’re not truly a partner.

Yeah, vendor management [LAUGHS] systems and companies are a hot topic right now. They’ve really come to fruition in the last four or five years, I think. And I understand why they came about and why in some instances, they’re probably necessary.

When you’re looking at large systems where you’re trying to fill, say, hundreds positions for whatever specialty, and you might have several hundred locums companies that all want your business. And so having them all funneled through one common management team makes a lot of sense. Most hospital systems don’t have that infrastructure to do it. So from that standpoint, vendor managers make sense and I understand where they come from.

On the other side, I’m trying to help defray costs for health systems, when you’re adding a third party in the middle of another third party that you’re trying to contract with, you’re adding costs at every layer. And it’s like three tier system when it comes to alcohol in this country where you’ve got the producer, you’ve got the distributor, and then you’ve got the retailer. There’s a tax at every stop.

And so when you look at vendor managers, there’s increased added costs not only to the system, but also to the companies that have to pay to be part of this vendor management system. And it’s not an insignificant money. It’s pretty significant money.

And so, in my eyes, every layer that adds cost to the system is detrimental to what we’re trying to do. And when these hospitals are running on fine margins and then we’re bringing these vendors in, they’re paying more money, and then there’s a five percent cost to the system.

And so from that standpoint, I’m not a big fan of vendor managers. But again, like I said, I’ve realized in that hospital systems that don’t necessarily have the infrastructure to manage a hundreds different companies and all the providers that are coming through and trying to vet everything. And so it kind of does funnel down.

The other issue I see with the vendor managers is these vendor manager companies are also owned by the same parent companies that own the locums companies. And so just the cost that filters up, that’s all set forth by these companies. It’s a little frustrating. As we’re trying to rebuild departments, make things more cost effective, make things more efficient. And then we’re just layering more costs on the front.

So, like I said, I’ve got my first taste of vendor managers probably in the last couple of years. And it seems like almost every health system is implementing them or partnering with vendor managers as they try to outsource these services.

Great answers. And I think we probably need a separate podcast for the following. But there’s a lot of places we go where the strategy of their locums during a transition or what not– would be to let’s get as many locums companies in here as we can. There’s others that go with one company that will supply all their needs. I know we’ve gone back and forth internally about the advantages of that. And again, that can probably be a discussion in itself.

But just to wrap up so we can move to some other relevant topics in the world of anesthesia. Joe, Renaye, what would be your big takeaway as far as where we’re going in the next three, five years anesthesiologists– anesthesiology, and its relationship with locums and hospitals? Just view from 30,000 feet where we’re going, what we need to think about.

Quickly. I just think strategizing on what the environment looks like with locums because they’re not going away. And what I would say is that the hospitals administration needs to learn their market. They need to know what are they competing against. What are they trying to sustain to retain. Because once you know your market, then you’re going to know a better fair market rate that you’re going to have to offer for that. So that’s what I would say is to learn your market, learn your environment so that you can make better decisions regarding locums.

Yeah, absolutely. I think you hit the nail on the head there. It’s understanding your market and what your needs are. But the way I think we can help health systems and hospitals think about it and manage it going forward is just one of the projects you worked on recently, Jason. Where the health system as they were insourcing, they also set up their own entity to basically supply their own locums from within house.

More of a direct 1099 contract type of thing, but you’re able to get these providers in under your umbrella and control your costs and your market rate. So you’re controlling that market that you’re in, as opposed to letting the local companies dictate your own market.

And I think it’s great. And it can work on so many different levels, because your own providers can provide services at other facilities within your system that they typically wouldn’t work at, or even provide services or allow you to expand services or pick up more contracts.

So, I think that it’s one of the things by understanding and looking at that market in where the providers are coming from that are working in your locums market. Is also key to if you’ve got a lot of local providers, then that gives you the ability to capture those providers and control costs by developing your own product and trying to keep it internal. And I think that is something that we’re going to see more and more of going forward.

I couldn’t agree more. I don’t necessarily think our clinicians want to be locums, I think what they want is to be 1099’s. And I think Joe, you were getting at Renaye, as far as knowing your market. We have found real, reasonable solutions to being able to offer from a compliance legal risk.

Some 1099 options that are getting market share of those clinicians that would otherwise be going to locums and inserting some of that tiered tax system that Joe has eloquently described. So, it’s possible. I personally think that capturing that 1099 market needs to be a priority for a lot of health systems.

Absolutely and it’s going to be more costly than W-2 employment on salary or an hourly basis. However you save some money on the benefit side, but you save significant money by not having to go to a third party company to provide these providers because all of the different levels of markup. So I think it’s one of those strategies that health systems don’t really want to hear about because they think of it all as locums. They kind of group it all together.

But again, if you can control it, that’s the thing. If you set it up, you can control it. You treat your providers well, they’re going to work in your system and they’re going to stay in your system. And I think that’s key of understanding it and building it and managing it yourself.

If you do the math of incremental costs of locums, over big systems or big hospitals with a lot of operating hours and operating minutes, these numbers turn real big very quickly. That 100, $150 an hour incremental cost of locums over a 1099 or W-2. The zeros start adding up over the course of a year.

And that’s why we think it’s very crucial. And finance people that are probably listening to this are shaking nodding their head. Yes, I agree. But I think a lot of people don’t realize, yes, it’s important to keep our eyes open, that is critical. But understanding that incremental pay you’re paying in the local market over some other options is really important math.

Yeah, one of the thing– one of the cost areas I think that’s missed by hospital leaders is, OK, well, we don’t want 1099 because they’re basically locums are paying these rates, but they’re still not as high as the locums rate. But there’s a huge variable cost in there that will go away if you internalize and hand build your own product, which is the travel cost.

Airfare, rental cars, hotels, things like that, that increases your cost significantly, probably about a third of your cost– a quarter to a third of your cost of locums is going to be all of that ancillary cost. And so if you’re able to control it and keep it more in a local level, then I think, you’re going to save a lot of money on the back end.

Yeah, I agree. Great discussion, I do want to move on. We talked about the micros, right? We talked about salaries, we talked about some reimbursement. I want to move to a little bit higher level here and talk about, subsidy, stipend your P&L for the year if you’re employed. We talked about some of the pressures that are increasing salaries or at the local level, use of locums.

Besides what we’ve talked about, how much of the cost problem? Are there other parts of the cost problem we’re missing in the macro level. So the reason why my subsidy for my vendor has doubled, the request doubled last year and this is just outrageous. I think those of us on the phone call now after what we just talked about, the math, maths.

So, what is it that we’re missing from the previous conversation that we incorporate into the macro level. And what are some strategies to think about as far as containing some of that cost.

Yeah, I think one of the big issues that’s driving costs is a three letter word that we haven’t said is what is an FTE. An FTE years ago meant the fact that you had a physician or you had an app and they did the work. And so the work was done and they were OK with receiving a salary for that. Now, it’s about the availability.

And it’s getting the hospitals to understand that having in-house OB, because it was a satisfyer for the obstetricians and because of reimbursements and because of salaries, it didn’t cost as much, but now you’re having to pay for availability for that. And people now have mindsets that I only want to work 40 hours, or I only want to work 45 hours per week. And so all of that gratis work or call or availability now has a price tag to it.

And I think that’s what the strategy that hospitals need to look at is all of the availability we are requesting, is it necessary. Is it providing towards the productivity, which we know when we look at it for utilization. Are we really getting our return on investment for having anesthesia available. And, there may not be any productive hours. So I think that’s one of the really big factors in what’s striving cost is.

Because an FTE five, seven years ago doesn’t equate to an FTE now in the availability that maybe didn’t have a price tag associated with, it now has a six to seven figure cash payment tied to that.

Yeah well said Renaye, you touch on so many points. It’s hard not to expand on them all. But I think you’re right. You’re looking at hospitals that don’t understand they’re paying for availability. They want access to the ORs for their surgeons at all times. And sometimes that doesn’t make sense when you’ve got providers that are not actually generating revenue by doing work.

And, and as you look at these FTEs like you mentioned too, you’re right. Nowadays FTEs are based around a 40 hour week, just like non non-medical people. And back 15, 20 years ago or so when Jason and I started practice, you worked until the work was done.

And then the other thing that I think is big is staffing models. How are you going to staff? Where can you cut costs? How can you cross cover things? And as things go forward, we’re seeing less and less anesthesiologists in medicine. And so it’s much less frequent to see a physician only anesthesia model from that standpoint. But it’s also the most expensive model because it’s one to one.

So if you’ve got 50 ORs, you need 50 physicians, 50 physicians could all come at a premium price. Well, you can defray some of that cost by going to a care team model in appropriate locations. Sometimes you do want a physician, one on one with the patient. And so developing the right staffing models and managing those is crucial to help defray the cost of anesthesia.

And JC is as we try to build some of these models for these health care systems recently, talking with them. Oh, well, we have to have only physicians here because that’s what the surgeons require.

OK well, if that’s part of the requirement and you got to understand, that comes at a premium cost. And so you have to set that to the side in its own pocket. Where can we save costs and other locations. Where can we do a four to one model, a three to one model. Where can we do some independent practice models, things like that. So, all of that together is affecting what we do from a cost standpoint.

I think you both spoke so well about that. To me my mind automatically goes up a couple levels to what we talked about a little bit more. A little bit about for the locums was coordination and strategy. I use the word migration before, I’m going to use two words here, it’s availability and productivity.

And [SIGHS] I think this is another case of where I see disconnect within hospital and system leadership. Anesthesia costs so much, we’ve gone over that at length. Whether it’s locums, 1099, your W-2s, there’s a cost there. If they’re not generating money and they’re sitting in a break room like I go so many places they are not contributing or making any money from that activity. And therefore the stipend is going to go out of control or in the opposite direction.

But if there’s a health system and there’s a strategy to build a certain surgical services option or line that has a contribution margin that is overall beneficial to the hospital or health system, they may want to pay for that availability. They may want to say, I want CRNAs and physicians and AAs available for the ortho spine doc that I’m trying to recruit to my system, and I want to make sure that rooms open.

That’s OK. But that has to be communicated and strategized and coordinated with the other section that is doing all they can to reduce anesthesia costs. So we blame the vendors a lot on the anesthesia costs. And they’re coming to me with more requests, they’re coming to me with requests more money. But there is some responsibility here from a hospital standpoint. And you have to keep your people productive, you have to keep them billing.

Five CRNAs or AA sitting in a break room for two hours straight in some of the places I go, raises a big red flag to me that their ORs are not operating efficiently, they’re not operating at a high utilization. And that balance beam of cost versus revenue is out of balance.

Now, again, if that’s because we’re strategizing from a system level, from a service line level, that’s OK. But the two need to coordinate and get on the same page and make this the most effective it can.

Yeah. To follow up on that, Jason, you think about when you’re starting up a hospital or opening a facility or opening up another site within a facility you know that there’s going to be that start up cost. And part of that start up cost is the availability of the providers to be there. So that way you can bring in that volume and attract those surgeons to do those cases.

But ongoing, like you said, you’ve got to be able to strategize and look at those efficiencies, look at the productivity. If it’s not matching up, it’s just a cost system is all it is. And anesthesia is a cost center. We generate some revenue, but we’ll never be self sufficient. And so where can you mitigate all of that. And so being able to evaluate that on an ongoing basis is crucial.

Vendors can play an amazing role in helping hospitals with that. But the key is bring anesthesia to the table, have those conversations, make anesthesia a part of the governance. Have operating meetings with your anesthesia team to understand. Because it becomes a double edged sword for anesthesia because they want to provide the coverage and availability.

But as you stated before, when there’s so much white space within the day and then you’re going to ask anesthesia to flex later on into the evenings, that’s what drives the cost. And sitting at the table and understanding what’s driving that, to come up with solutions is better than just playing a subjective. I think this is what’s going on.

Anesthesia can be a help, unfortunately, they don’t drive the volume, but they can help with the management of it. But they need to be at the table to have those conversations with the surgical committees and with the administration.

The alignment of the anesthesia provider in the hospital and the expectations. And I think the hospitals are clear on their expectations or they might not even know what their expectations they really are. But you’ve got to think about it more as a true partnership than just a transaction where I pay you money for a service.

And I think that’s where we’ve seen a vacuum over the last 10, 15 years, is things have become just so service, transactional based. A lot of the private groups are gone, we’re dealing with vendors. And we’re providing a service, you’re giving us a check and we’ll give you what you pay for. But if you need more need to pay more. As opposed to, let’s build in a partnership metrics, KPIs, whatever we need to do and make both sides honest as a true partner in the service that they’re providing.

I couldn’t agree more. And I think just to wrap it up before we go on to the next subject. Someone has to be doing the calculus, in my opinion. Having flip rooms or swap rooms or two anesthesia resources for a cataract surgeon, flipping, cataract procedures is way different than an orthopedic surgeon doing knee replacements.

And those resources and understanding the cost of what anesthesia is for those rooms, and then understanding the revenue from the procedure and procedural care, the facility fees, whatever it be is really important in that coordination effort. Bringing anesthesia to the table, bringing the procedures to the table and understanding what’s the best for the system.

What would you say if you’re an administrator and anesthesia for years and years have been this kind of smoldering fire. Now that the embers are getting a little hotter. I’m hearing more about anesthesia.

At what point is a hospital leader do you just say, I need to really consider a change to my anesthesia services, whether it’s employment, another vendor, RFP, what not. What is that trigger point? I realize there’s a continuum here. But what are some things that come to mind when someone really says, I need to get help here or I need to make some decisions.

That’s a hard question because I think it’s several things. I think it’s when you start to look at your metrics, when anesthesia isn’t the only factor that indicates utilization. But when you hear about cases having to be canceled or when just see that, either your attrition from your group, you see the resignations, that’s something that is happening.

But again, when you hear those rumblings or when you feel uneasy about anesthesia, I think, one of the big things that needs to be addressed address is, what and why. What is my heartburn? What is my true issue? What are my symptoms? So that you know that you’re actually addressing the correct thing.

And then why am I needing a change? Because understanding your why will help you to get to a better solution. People think that going to employment maybe the best option, but it’s why are you doing that. If you’re doing that for a cost, that may not be the best decision for you. If you’re doing it because you want control and there’s no other vendor options or options for you, I think that’s when you really need to. Or if you’re struggling to answer those questions of what and why, really need to reach out to the experts.

Yeah, I agree, Renaye. The question always comes up, or at least I will ask administrators when they decide they want to make a change. It’s like, well, why do you want to make a change? What is that one thing? Is it– And it’s usually the two things we’ll say are probably the most common cost, you got to reduce their cost. Or the current provider is not providing the services to the level that they want.

Now it could be you’ve partnered with the wrong provider or there is some conflict with that provider in the hospital or whatever, or it might not be their fault at all. It’s a difficult market, difficult to recruit, costs are going up. And so, the administrators are like, well, I need to get rid of this vendor because they keep asking for more money.

Well, if we go in and look at it, it might be a legit ask for money because of the increasing cost and shortage of providers out there. But you have to be honest with the administrators, like really need to look deep into what all the factors are. It’s never just one solitary factor and I find that most of the time it comes down to money. The cost just keep going up. And so then, all right, you want to make a change. What kind of change do you want to make?

Like Renaye said, there’s employment option. There’s repartnering with the vendor that you already have or moving on to a new vendor. So you really need to assess it. And I think where once they decide they want to make a move, and I tell them, all right, well, if it’s about cost and so put out an RFP, I think a lot of places miss the boat. They just automatically go into negotiations with vendors, they don’t really put out an RFP.

An RFP is good from the standpoint of if you have five people give you an evaluation and a cost, and you look at it and things are pretty close, then you can feel very confident of where that cost should be. Now, you may have somebody that’s way here. Somebody that’s way down here.

But I think one of the benefits to that is when you’re going to be able to compare staffing models, FTE numbers, you’re going to be able to compare cost and to see where things really lie. So maybe that increased cost that you think is atrocious might be truly necessary and market based on what’s happening.

But, the administrators are always– I think the number one thing they’re always looking at, they just see this big check going out the door, all this money, money, money. But it’s not always about that. And then if it’s a control issue because you’ve got a terrible vendor, well, that’s completely understandable. But it doesn’t necessarily mean you need to control it by employing as well. You can still find someone else, potentially someone else to partner with that may be better.

Yeah, I think right now vendors are getting a little bit of a bad rap in this space. It’s just I don’t know if it’s transitory or whatnot. There’s a lot of advantages that some of these vendors do bring to the table.

Speaking of transitions, whether it’s an RFP, employment or whatever, what do you think is a couple things, two or three that health care leaders maybe underestimate about anesthesia transitions. And Joe, I know you hit on a couple of them and you don’t need to repeat those. But if there’s anything else that comes to mind, I think it’d be a great way to wrap up this session.

I don’t think we hit on the RCM. Anesthesia is very different than other specialties, and with the transition, understanding the billing element, because that also can be a cost driver. If you’re leaving a lot of money behind. They seem to think that even they may do it internally, but I think really honing in the fact of making sure that you have an RCM expert in anesthesia because it is ever changing with all of the modifiers. That is one of the aspects that I think is overlooked or not thought about, but it becomes a very important factor when making a transition.

Yeah, for sure. And I think to follow up with that on the RCM side, it’s also contracts. I think there’s a lot of systems will have initial anesthesia contracts, and they just kind of let those carry. They don’t renegotiate, they don’t reassess the market. Those should be looked at every two, three, four years at the most to make sure that you’re getting the fair market rates that you deserve. The insurance companies aren’t just going to throw money at you and say, oh, hey, here, take some more of our money. You’re going to have to ask for it.

And as Renaye knows way better than I do, obviously it’s going to be dependent on the market and location that you’re in. But, you’re going to have to be in constant negotiation with the insurance companies to make sure that these rates are fair. And you also want to be well aligned with your competitors in the market too.

Insurance companies are notorious for the small groups get paid a little bit less because they don’t have that kind of market share, even though they may actually have better quality, better KPIs, things like that. And so, that’s another thing too, is partnering with the insurance companies to prove yourself, like, hey, we deserve this money because of our quality outcomes.

Yeah. And Joe we talk a lot about having a strategy for your tins as it relates to your payers. And that’s a really important point of it as well. I really appreciate the both of you. I think this is a great conversation. And I think we also uncovered a few possible topics for the next talk. So thank you very much.

Thank you.

Great thanks, Jason.

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