VOLUME 27, ISSUE 1

Since becoming President of the TSA, I have had a continuous stream of phone calls, emails and text messages concerning the consolidation of Anesthesiologist groups. The messages seem to be falling into two groups; those that are part of large groups and those that remain independent. I have worked in both small or micro groups as well as large corporate organizations. Personally, I enjoyed the control and flexibility that the small groups gave me, but there is something to be said for the lack of worry about billing and the regular pay check of the large corporation.

The driving forces for consolidation include economies of scale in billing, regulatory, and contract negotiation. Today, the gains from scale and contract negotiations offset the costs of operating large groups, including paying a profit to investors in the case of for-profit groups. There are also potential risks for these large groups. A national single payer system would invalidate much of the savings that are generating the profits. In this situation, to quote Kevin Costner in Tin Cup, “everyone gets what they get”. In a single-payer world there would be little incentive to size for contract negotiation. For today a single-payer system is not an option, but given the mess that Obamacare is creating, who knows what the options will be in 10 or 15 years. For today I continue to see consolidation in the large metropolitan markets, but much less so for the smaller markets.

Another twist to the current consolidation market is the role that hospitals are playing. Hospitals are under pressure with some of the demands of Obamacare and the changing insurance market as noted earlier. An easy target are subsides that are paid for non-economically viable anesthesia coverage. There has been a considerable increase in requests for proposals for anesthesia coverage to outside groups, even in situations where relationships have existed for years. Look for more on this topic in future articles.