Demand for anesthesia providers is growing as reimbursement is shrinking, says NorthStar Anesthesia CEO

Ambulatory surgical centers have seen a steep rise in popularity since the pandemic — and with more places to have surgery  comes a large need for anesthesiologists at these facilities. 

Adam Spiegel, CEO of NorthStar Anesthesia, told Becker's ASC growth began even before COVID-19. However, hospital OR capacity has also remained steady, creating a big demand for anesthesiologists and certified registered nurse anesthetists. 

"The problem is, during the pandemic, like every other workforce, we actually saw a contraction in the number of providers," Mr. Spiegel said. "People retired early, people decided that they could go part time, some just decided to leave the workforce altogether. And as a result, we've been in this situation where demand far exceeds supply when it comes to anesthesia providers."

As the demand for anesthesiologists and CRNAs continues to climb, so do their salaries. Mr. Spiegel explained that anesthesia providers are only partially compensated by the revenue NorthStar earns from each case. 

"If you have trauma, you have to have an anesthesiologist sitting there, because if somebody comes in with a gunshot wound, they need to have anesthesia," Mr. Spiegel said as an example. "So, you must have providers ready even if there are no current cases. And that costs money, because if there are no surgeries, we are not getting any reimbursement from payers, and then the hospital has to subsidize the costs for that anesthesiologist."

Reimbursement for anesthesia expenses through Medicare and insurance companies have declined, Mr. Spiegel said. This has led to costs being subsidized by hospitals or ambulatory surgery centers, depending on the case. 

"To put it in high level terms, we've seen about a 20 percent increase in cost over the last couple of years for anesthesia providers. But we've seen a decrease from payers, if you combine Medicare and other payers, by 5 to 7 percent."

Additionally, the current shift toward care team models also affects employment and compensation for anesthesiologists and CRNAs. With certified nurses being able to perform as anesthetists in many states, it is becoming more cost effective to hire multiple CRNAs as opposed to multiple anesthesiologists. 

"Now, what's interesting is, that hasn't slowed down the need for more anesthesiologists," Mr. Spiegel said. "Because I think, overall, the pie is growing. So anesthesiologists probably aren't growing at the same rate as CRNAs in terms of demand, but the current demand way, way exceeds the number of anesthesiologists now or that are coming out of training."

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