Editor's note: ASA State Affairs staff would like to inform readers that the number of states that allow nurse anesthetist independent practice was inaccurately stated below. Please see Editor's note below.

The practice of anesthesiology has developed into many different patterns since it was recognized as a specialty in the U.S. Some practice types have developed by necessity and others by historical precedent. Different regions of the country and even different parts of some states have had entirely different and somewhat varied practices. There are several combinations, from solo practice, to group practices with either all physicians or combinations of physicians and certified registered nurse anesthetists (CRNAs) or certified anesthesiologist assistants (CAAs). Some groups are owned by physicians, some by CRNAs, and other groups are employed by the hospital clinic or part of a large national anesthesiology group. There are some practices where the physicians work side by side with independently practicing CRNAs, and some hospitals have even dismissed anesthesiologists and utilized only CRNAs. Few statistics are available about what groups are owned by anesthesiologists or CRNAs, but this would be expected to increase since 30 states allow independent practice by CRNAs. That number will more than likely increase. [Editor's note: Forty-five states and the District of Columbia have laws that require physician oversight or involvement in anesthesia care delivery. While governors in 19 states opted out of the Medicare requirement for physician supervision of nurse anesthetists, very few of those states have adopted corresponding laws to eliminate physician involvement requirements.]

The definition of a private practice group as envisioned by many physicians in training would be a group of physicians who work together to cover the anesthesia needs of a single hospital/clinic or system of hospitals. The private practice group could consist of all physicians or a combination of physicians and CRNAs and/or CAAs. The work load for the OR would be directed by the group in coordination with the hospital or clinic. The anesthesia group would then bill for their services. The group might employ the CRNAs or CAAs or those people might be employed by the hospital. Most commonly, the group would have a contract with the hospital or clinic that would delineate the services provided. Depending on the contract terms, the hospital may or may not provide a stipend to the group to supplement the income level of the practice and/or to facilitate retaining a viable group.

The advantages of private group practice are that the physicians can make decisions about the best way to handle patient care as well as the best way to distribute their income without a larger corporation making decisions for them. The amount of salary paid to each physician is determined by the group partners. Following salary payments, contributions for retirement plans and bonus amounts per year can be maximized. The group can decide if they wish to practice as a C corporation, S corporation or a limited liability corporation. Recent AMA survey data indicates that more than two thirds of practices fit into one of these three types (Table 1).

Table 1:

Current Distribution of Types of Corporations of Private Practice Groups in Anesthesiology

Current Distribution of Types of Corporations of Private Practice Groups in Anesthesiology
Current Distribution of Types of Corporations of Private Practice Groups in Anesthesiology

Corporate structure may vary depending on region or state laws. A private practice group should have a strong relationship with a law firm for recommendations of this type. Also, the group should maintain a constant working relationship with their accountant. It is extremely important to retain experienced people in these areas.

Billing for the private practice of anesthesiology can take several forms. Many groups contract with a billing company to do this work, but it can be done through a billing office of the group. If billing is done through an office of the group, there will be employees to pay and an office to maintain. This introduces the need to pay personnel who are not professional employees (i.e., the physicians). Different rules apply regarding retirement contributions for these non-professional employees. In the case of a contracted billing company, there would be no employees of this type.

Some private practice groups employ the CRNAs or CAAs and some do not. In the case of the former, the physicians are the partners and the CRNAs/CAAs are usually employees. However, there are some groups that allow CRNAs/CAAs to become partners along with the physicians. There are some private practices where the CRNAs are the partners and the physicians work for them as salaried employees and may or may not become partners.

The small private practice group that has fewer than 10 physicians can usually do their accounting and management of their practice in an “in-house” manner, which would mean that all payments, receipts, salaries, and retirement contributions could be done by an individual who is a partner in the group. This should be a very transparent arrangement for all the partners to see and evaluate. Larger groups will require more administrative work such that an administrative assistant/COO may be needed. Such an arrangement will increase overhead expenses but will not overload a single physician with too many administrative tasks, which could also be contracted with a third party depending on the partners.

Group practice with physicians and CRNAs/CAAs in the care team model has worked very efficiently in providing care for busy surgical locations and allows the physician the freedom to evaluate patients preoperatively and to treat patients in the PACU as well as perform procedures such as arterial lines, central lines, and blocks for surgical anesthesia or postoperative pain. Also, one physician each day can be the on-call person and help manage the add-on list and other administrative tasks along with the OR staff and surgeons. Often, the on-call physician responds to needs in the obstetrical suite as well. Medicare and many insurers allow a 1:4 ratio of anesthesiologists to CRNAs or CAAs for medical direction of anesthesia, which allows for the best economic benefit to these physicians as compared to a solo practice.

The relationship of the private practice group with the hospital and the surgeons is the most important aspect of a successful practice. Contracts with entities such as hospitals and clinics can be fraught with problems. The group practice should first ensure that the needs of the hospital are met with regard to patient care. Physicians should be adamant that their group not be treated differently than other physicians regardless of contractual status. The medical staff bylaws should apply to contracted physicians in the same manner as non-contracted physicians. For example, the anesthesiologists should not be required to take in-house call to facilitate obstetrics if the obstetricians are not required to do the same. Usually, one partner is chosen as a “medical director” and acts as a liaison for the group. Additionally, some hospitals have requested that the anesthesia group provide special services such as plastic surgery or endoscopy services at a different rate of reimbursement than the group charges for similar surgery/procedures. For example, the hospital may want the group to charge a flat rate for all upper GI procedures or all breast augmentations without considering the time factors or other issues.

The group should be mindful that the relationship with the surgeons as a group is their most important ally. If the group works closely with the surgeons and other physicians/providers in a good faith way, as well as with the administration of the hospital, this is the most effective method for retaining the contract. Close communication with hospital administration and the surgeons is extremely important, along community involvement of the anesthesiologists.

Private group practice does have some significant disadvantages as well. Many physicians do not wish to deal with day-to-day issues such as billing, complaints from employees, or other administrative tasks with the practice. Economically, the salaried physician with a hospital will usually make a lower salary, have less contributed to their retirement plan, and overall have less control of their environment. For example, if a practice of four to six physicians experiences a shortage of doctors, the remaining number will need to be on call more often and work longer hours. However, those doctors will be rewarded with a better distribution of the practice receipts. Alternatively, in the same practice situation when physicians are employed by a large institution, the institution may require that extra work be absorbed among the remaining physicians without extra compensation. Certainly, the policies of a tertiary care/academic institution may not be applicable to a community hospital that is part of that system.

“The new trend across the U.S. in the last 20 years is for the hospital to take over private practices, which is especially true for anesthesiology. AMA survey data from the last few years shows that physician ownership of group practice has decreased, while physicians as employees has risen along with physicians as independent contractors.”

When physicians are contracting with a hospital or other institution, the same pitfalls mentioned above will apply. The physician should read the contract thoroughly and be sure to understand the basic elements therein. The most important elements are how the physician is treated with respect to other physicians on contract and with respect to the medical staff bylaws of the entity. The physician should also be sure that on-call and other duties are clearly defined. There should be a protocol for complaints by the surgeons or the hospital about physicians arriving late or ignoring calls for procedures. When these arise, the physician should be aware of how they will be treated. Is there a directive in the contract that stipulates each physician can be drug-tested at random or “for cause”? What are the rights of the physician if she/he is presented with this situation? The physician should recognize that civil laws in their state will not necessarily apply in these situations. Rather, the medical staff bylaws or the contract will define the course of action.

In the private practice group, most physicians start as salaried employees and then advance to partnership after a few years. This is variable depending on the size of the group, the state/region of the country, and many other factors. The usual course, defined in the contract, is that the physician will work for a given number of years at a specific salary that may be adjusted each year. After the “probationary” period, generally two years minimum, the doctor qualifies to become a partner. This assumes that the contracted physician has performed well and “fits” into the group. Then, the new partner may be required to pay a “buy-in” of the accounts receivable for the practice. The new partner will shift some portion of his/her new salary to the other partners for a period of time, possibly one to three years before attaining full salary status with the other partners. This type of arrangement implies that if the partner leaves the practice by retirement, relocation, death, or disability, they would then be entitled to a “buy-out” of the accounts receivable – presumably following the same rules as the “buy-in.” Some private practice groups do not require this and thus have no buy-out option.

The new trend across the U.S. in the last 20 years is for the hospital to take over private practices, which is especially true for anesthesiology. AMA survey data from the last few years shows that physician ownership of group practice has decreased, while physicians as employees has risen along with physicians as independent contractors (Table 2). There is no sure way to prevent takeover by a hospital or large anesthesia group when in a private practice group. Anesthesiologists in a private group live in a love-hate relationship with the hospital and the surgeons at all times. The stronger the surgeons feel that the anesthesiologists are performing well, the less likely a takeover will occur. However, as the practice of medicine has become more competitive, smaller hospitals have been taken over by larger entities in order to stay solvent, thus pushing the envelope on eliminating private practice groups of all kinds. The usual groups targeted are anesthesiologists, pathologists, radiologists, and emergency room physicians. If these practices have off-campus sites like pain clinics or other offices, they may be able to maintain some practice outside of the hospital. However, many contracts have a no-compete clause, meaning that if the group is dismissed from the hospital, they cannot practice in the same city/county, usually for a period of two years or longer. A no-compete clause may be challenged in court, but the physician universally loses.

Table 2:

Ownership versus Salaried Anesthesiologists

Ownership versus Salaried Anesthesiologists
Ownership versus Salaried Anesthesiologists

Can anesthesiology be performed as a solo practice in the 21st century? Based on the present environment, it is less likely except for cosmetic surgery or similar types. AMA survey data shows that solo practice by anesthesiologists has remained about the same since 2016 (Table 3). Certainly, there may be coverage issues if the physician is unavailable because she/he is doing another case when a complication occurs. Because of this, a physician in solo practice would be unable to begin a new anesthetic if there were problems with a previous one. This not only would limit the number of cases but also the amount of income. Ultimately, the clinic/hospital or system may be dissatisfied with such an arrangement.

Table 3:

Mode of Practice by Anesthesiologists for the Years 2016, 2018 and 2020

Mode of Practice by Anesthesiologists for the Years 2016, 2018 and 2020
Mode of Practice by Anesthesiologists for the Years 2016, 2018 and 2020

When considering practice type, every anesthesiologist must determine what will allow the best use of their skills and their own professional goals. When joining a group of anesthesiologists, the physician will need to be aware of many different aspects of the practice. First, the top priority should be the cooperation and dedication of the group to care for their patients. This is difficult to evaluate in a single interview when time is critical. The best way to evaluate the group and the job and to gain an overall perspective is to speak with as many people as possible in the OR, including surgeons, nurses, CRNAs, transporters, etc. The physician should ask for a sample copy of the contract with the group in case a job offer is presented. Finding the correct mix of personalities may be difficult, but the basic interaction of the doctors is very important.

In summary, the private practice of anesthesiology is variable and depends largely on the historical development in that particular place. The relationship of the anesthesiologists with the surgeons and each other is of paramount importance.

Stephen G. Cecil, MD, Staff Anesthesiologist, Wayne UNC Healthcare, Goldsboro, North Carolina.

Stephen G. Cecil, MD, Staff Anesthesiologist, Wayne UNC Healthcare, Goldsboro, North Carolina.