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00:00:01
Anesthesia: Building an In-House Team
76 Plays13 days ago
This week, we’re joined by Wes Battiste, an experienced anesthesiologist and ASC developer, to talk about a growing trend: surgery centers building their own in-house anesthesia teams. What once seemed like a wild idea is now becoming the best path forward for centers looking to stay profitable.
Then, in our Data & Insights segment, we dive into 10 key metrics from spine centers—some promising, some concerning, but all worth paying attention to.
Plus, a personal update: After nearly three years hosting This Week in Surgery Centers, Erica Palmer will be passing the mic. You’ll meet your new host, Alex Larralde, in this episode (she interviews Wes!), and you’ll also start hearing from Grant Duncan in the coming weeks.
Resources Mentioned:
https://www.hstpathways.com/specialty-data/spine
Brought to you by HST Pathways.
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Transcript
Podcast Introduction and Format
00:00:01
Speaker
Welcome to This Week in Surgery Centers. If you're in the ASC industry, then you're in the right place. Every week, we'll start the episode off by sharing an interesting conversation we had with our featured guest.
00:00:12
Speaker
And then we'll close the episode by recapping the latest news impacting surgery centers. We're excited to share with you what we have. So let's get started and see what the industry's been up to.
Introducing Wes Baptiste and His Experience
00:00:27
Speaker
Hi everyone, here's what you can expect on today's episode. Wes Baptiste is a seasoned anesthesiologist and ASC developer. He's done it all from opening centers to consulting to M&As, and he's on today to talk about how you can build an in-house anesthesia team.
00:00:44
Speaker
The industry dynamics between surgery centers and anesthesia providers have changed drastically in the last five to 10 years. And there was a time when the idea of a surgery center having their own employed anesthesia team seemed crazy.
00:00:59
Speaker
But now it's becoming the only solution for some centers to remain profitable.
Host Transition Announcement
00:01:04
Speaker
After my conversation with Wes, we'll switch to our data and insights segment. Today, I want to cover data from Spine Center specifically.
00:01:12
Speaker
We've got 10 key metrics to cover, some encouraging, some a bit concerning, but all highly interesting and actionable. Before we jump in, though, I have some exciting and bittersweet news to share.
00:01:25
Speaker
After almost three years of running and hosting this podcast, it is time for me to hand over the reins. I have loved every minute of hosting this week in surgery centers, especially getting to meet with and learn from so many ASC leaders.
00:01:40
Speaker
But I have decided to take the leap change career paths a bit. and go all in on growing my nonprofit. So my chapter at HST and with this podcast will come to a close at the end of the summer.
00:01:54
Speaker
But fear not, we have put in a tremendous amount of time searching for the perfect host to take things over, and you'll actually get to meet her this episode. Over the next few weeks, I'll be transitioning out and Alex Lerald will be transitioning in.
00:02:10
Speaker
She is fantastic, super smart, and I know all of you will love her. You'll get to hear her this episode as she's the one who interviewed Wes. You'll also start to hear from Grant Duncan.
00:02:23
Speaker
He'll hold some interviews as well moving forward. He has a bunch of industry knowledge and always asks the most insightful questions. So you'll be introduced to him too in the coming episodes.
00:02:34
Speaker
I know change can be hard, but it can also be really exciting. And honestly, I'm stoked to just get to become a listener of the podcast moving forward. So thank you all for being such an amazing audience. And for the second to last time, i hope everyone enjoys the episode and here's what's going on this week in surgery centers.
Wes Baptiste's Career Journey
00:03:00
Speaker
Hey Wes, welcome to the podcast. Can you tell everybody a little bit about yourself and how you got started in the ASC industry? Of course, Alex, and i thank you, H2 Pathways this week in surgery centers for having me on.
00:03:15
Speaker
My experience is about 40 years in healthcare. care In 19, I began as a respiratory therapy tech at Emory Hospital as an undergrad. 10 years later, I finished anesthesia school there in 1991, a decade of doing anesthesia, and in 2000, built my first surgery center.
00:03:30
Speaker
from the ground up in 2010, a second, 2020, a third. ah Since then, that also included anesthesia practices associated with those ASC entities. And since then, the last few years have mainly involved in advisory work on both the ASC and the anesthesia practice side, everything from M&A to feasibilities to turnarounds.
00:03:50
Speaker
um And now with anesthesia, quite a bit of work with just the modeling. and I've been doing most of that work and now exclusively with Avonza Healthcare
In-House Anesthesia: Benefits and Strategies
00:03:57
Speaker
Strategies. So that's where I'm at. Great. and Thank you so much. I'm actually really glad we were able to get you on the podcast because as we're about to get into the industry dynamics between surgery centers and anesthesia providers have changed drastically since COVID.
00:04:12
Speaker
It used to be very uncommon for an ASC to have their own in-house anesthesia team, especially if there was only one or two ORs, but now that's becoming a real viable option for people.
00:04:24
Speaker
So i would love to talk about your experience there and what prompted you to build an in-house anesthesia group instead of outsourcing. I think from the very beginning, the benefits were obvious. This is 25 years ago. First of all, it's a mindset shift because anesthesia historically has been ah service and it's outsourced contractual entities such as pathology or radiology.
00:04:48
Speaker
But to integrate and to collaborate with the ac there were the benefits were just, for me, were obvious in the beginning. Now they are substantially um more beneficial, but the integration just, it creates an OR utilization metric that's easily managed.
00:05:03
Speaker
your staffing, you can tailor it to the needs, not just in hours, but also in skills and preferences and those pieces for the ASC. And then they are seeing the RC, the revenue cycle becomes obviously very transparent and there's just inherent benefits in that integration.
00:05:17
Speaker
Anesthesia usually is not able to collect a prepay from a patient. They're not privy to the insurance verification from the surgery center or the hospital outpatient department side. So patients are balanced billed.
00:05:28
Speaker
Integrated into the AAC, your insurance verification is transferred to the anesthesia practice. Pre-pays are collected, bad debts reduced, um patient collections are improved. The benefits were were inherent from the beginning.
00:05:40
Speaker
From a recruitment and ah retention perspective, how does that work when you're looking to bring somebody in-house and have them be on your team full-time? Your, your, it's value there is to utilize your ASC provider, your partners, your medical staff, your surgical staff, but for their referrals, you get first person referrals versus with locums that you don't know who you're getting or what you're getting.
00:06:03
Speaker
oh And so that's the first step and that's how we worked. So the, the recruiting was really best referral base are the people who are already there and who they know. And then second to that, you know, the, the, the retention and in this market, that's challenging because everybody's offering another dollar an hour you know,
00:06:18
Speaker
another $10 an hour. yeah I think that really comes from the relationships as as well. You want to create a culture, culture of caring that that make people want to work there. But most clinicians, somewhere in them, the money drives them, but they did this for a reason. They did it because they really do want to care for patients and they really value an authentic environment where that happens.
00:06:36
Speaker
And so he's just creating that culture makes it a place that people want to work and then you're able to retain them. You know, just as your OR nurses and your OR techs, you would not consider just ah farming that out to a service. You want them to feel a part of the team.
00:06:50
Speaker
know, a lot of people down in that model are considering equity for their anesthesia providers just to create that true sense of ownership in ASC to integrate them even further. Absolutely. That's a great point about the cultural benefits. I imagine that it's a very different type of job, you know, being in a surgery center versus working in a hospital versus another care setting. What are ah some other benefits or for a practitioner to work in an ASC?
00:07:16
Speaker
Generally the ASC, it's controlled hours. You know, the historic model is Monday through Friday, seven to three. Etsy, Boston with ASCs. Some people are extending hours. There are some folks doing Saturday hours. um There still is an element of control. You know, when when you walk in the morning,
00:07:30
Speaker
your schedule, it may be a long schedule, but that is the schedule. You're not going to finish at four o'clock and the ER is calling that there's a rupture aneurysm that you need to hang out and take care of. The level acuity is less, so it can be a a little bit less stressful environment. The pace is quicker, um but it also ends up being, think that environment is different. It's just very different. It becomes the physicians, especially if you have a syndicated center who are partners there, their attitudes are different ah when they're an owner ah versus just ah a utilizer.
Financial and Operational Benefits of In-House Teams
00:07:56
Speaker
So circle back the environment has been really key to 25 years ah of successful in anesthesia and ASC, you know, because have one liners, can't remember a paragraph. So i use one liners. I have one that says people make the place and good people make good places.
00:08:11
Speaker
It tends to be the old as, you know, birds of a feather flock together. The more good people you have, the more good people you attract. On the ASC side, and the benefits are just so obvious. You start to align your goals between your ASC and anesthesia.
00:08:23
Speaker
You obviously have that control over staffing and whether it be scheduling for or optimize optimization, utilization. And then you have full transparency. You get some budget optimization because you get full transparency in the financial matters, so all the financial
Challenges and Feasibility of In-House Anesthesia
00:08:34
Speaker
matters. so um And if you're in situation which five years ago was not common now, it's very common, whether there's a stipend or an income guarantee, um you have full transparency into that. And the stipends and income guarantees are are not real good incentives for either the anesthesia providers to staff well or the revenue cycle to do a great job of collecting because the money's going to come either way.
00:08:54
Speaker
um So when you take control of that, it's a huge optimization. and and Maybe it doesn't do away with the stipend or income guarantee, but it it must assuredly in all the models that we run when we do this, it surely reduces it. Absolutely. Yeah. Could we dig into that a little bit? The financial operational benefits of this model?
00:09:10
Speaker
What other ways do you see ASCs benefiting operationally? So in ASCs, ah we have to staff our rooms. So oftentimes the hospital has a room they can't staff, they just stack. They stack the cases to after hours. We don't have really after hours in ASC.
00:09:24
Speaker
So our model of our rooms and our schedule. And so by bringing it in-house, again, that control over the staffing, but also that retention I talked about. Right. Viders don't tend to come and go quite as quickly. ah I'm circling back and back, creating that environment that they, they feel valued. So so again, it's a mindset shift. They're, they're not just someone coming in, providing a service that actually valued part of the team and they're integrated into the team. Their input is valued.
00:09:47
Speaker
And how, how we staff with ah four providers, but we've got five rooms. How do we do this? And that worked between the OR, that's the scheduling between anesthesia. Cases are good. Our adage in surgery centers are cases are good. Volume is the number one metric across all surgery centers. Payers, payer rates, payer mixes, all those things.
00:10:03
Speaker
ah Case acuity, case mixes, but yeah the volume is the key driver. So how do we accommodate the volume? And the biggest bit is that there becomes some element of control over that. And again, the RCM is huge because Managed care rates, oftentimes if you have an independent anesthesia group, they're not able to negotiate very well or have much leverage for your commercial payers.
00:10:23
Speaker
Whereas an ASC, you've created more leverage. You've created and another entity that now already has contracts with Blueat and Cigna, United, Humana, and they can leverage that on the provider side to hopefully instead of say $40 per unit, they can leverage to be $50 per unit. And those are just direct pass-throughs to that bottom line to help offset that stipend or income guarantee or order to become profitable.
00:10:44
Speaker
Yeah, exactly. Exactly. ah What are some of the challenges? We've talked a lot about the benefits, but when you're bringing somebody in-house, obviously now they're going to be an employee, they're going part of the staff. With that comes the need for time off, vacations, that sort of stuff.
00:10:58
Speaker
How are you mitigating against some of the the challenges and risks of bringing the team in-house? Yeah. So, I mean, it ends up being a risk benefit ah decision, but, and and we do a lot of this modeling and through our advisory work and um there's obviously a financial risk if you're on the hook for their salaries.
00:11:14
Speaker
But oftentimes we don't look at W2 roles. A lot anesthesia providers like the 1099 role. They're able to then maintain their self-employment status, but yet it's a 1099 quote guaranteed 1099 role. And, you know you have to step around those rules and make sure you're compliant there.
00:11:28
Speaker
But a W2 versus a 1099, that takes some of the challenges out because a W2, you obviously, there's all the HR and all this compliance and all those benefits and all those just quality measures that you have to meet in a W2.
00:11:39
Speaker
So oftentimes we recommend a 1099, a full-time 1099 or a part-time 1099. And that takes some of those risks out from the HR side, but you also have... Obviously some compliance and then now you have quality reporting for anesthesia as well.
00:11:53
Speaker
So there are some operational, I wouldn't call headaches, but there are some additional operational challenges that that someone has to manage if you own it. You know, that's not third party or someone has to manage that. And then the other challenge is if you bring it in house, you do then have to go get those rates. You do then have to go get those managed care contracts. You know, it's not through someone else. You know, now you own those rates and now you go back to negotiating with payers for rates or for your commercial payers. So that's the other challenge. But being able, we usually see is that's more of an advantage, a challenge on the front end, but more of an advantage on the back end.
00:12:25
Speaker
That makes total sense. So in terms of staffing, when you're bringing the anesthesia team in house, you raised a good point that I hadn't thought about. You have additional compliance, other things that you need to manage now having an anesthesia practice.
00:12:37
Speaker
What other staffing considerations are there around that? Are there other people you need to hire, other part-time roles? What does that look like? So the beauty of that is that most of those pieces are already in place. And generally you already have a biller, you have an insurance verifier, um which anesthesia did not have prior. ah you You know, you have a collector and you also have the biller is able to, when they bill for Dr. Jones's knee arthroscopy, right behind that, they're able to submit the same claim for anesthesia. you have a speed to bill too. do You're reducing days in receivables because it's not having to then
00:13:11
Speaker
be transferred, usually what happens with an outsource after it's billed, the AOC's record transfer to the billing company, they have to code, they have to do their pieces. So there's a three to five day lag. So you're reducing that revenue cycle. So those pieces are already in place.
00:13:24
Speaker
If you know, you already have an HR department, you already have someone over payroll. Most of the infrastructure is already there in the AOC. It's generally fairly seamless with the exception of just what employee model are you putting in place?
00:13:38
Speaker
And then your payer rates and then your managed care side. Those to me are the the two bigger challenges that that we face if we went into bringing in-house. That makes total sense. And that actually leads really nicely into my next question. So if I'm an ASC and I'm evaluating whether this is for me, what do you recommend I do? What is kind of my first step?
00:14:00
Speaker
yeah It starts with, I call it a feasibility study, just like we would do if you wanted to build a surgery center. We really need to come and look at a feasibility study, run an impact analysis and see, again, make it numbers, make it number data driven.
00:14:13
Speaker
Have another one-liner. Numbers don't lie, but they don't tell the whole story either. So there are also indirect benefits, but but we need to look at the data side. And so a feasibility study, just to run through everything we've talked about.
00:14:23
Speaker
If we bring this in, what does that look like? How will impact our bottom line? And that bottom line could be related to, we can accommodate more volume or we can increase the revenue side for anesthesia, XYZ.
00:14:34
Speaker
um Just to look at all the those metrics and see what that impact is. That's the first part. The second part is, are we able to go out and find the staff um that we would need for anesthesia with, again, with first person referrals, you know, with our staff or who's already here, would they consider transitioning to that model with us and becoming a part of the
Advice on Authenticity and Patient Care
00:14:51
Speaker
center, not just retail, not just to consume. Would they be, want to be a part of this? answer is oftentimes yes, especially with some of the folks now considering equity roles. Anesthesia has always been kind of carved out of an equity role in the ASC, but now I think the importance into what they deliver, ah there's value. So a lot of people are considering limited equity roles.
00:15:09
Speaker
for them. And then the third thing to consider is whether or not you do this as a hybrid. um I've done this one of my centers, there was an anesthesia entity that already had rates and I partnered with them. I owned it, but I partnered with them much like AOCs were partnered with a management company, but but not a 51%, a limited equity, but you take some of those benefits. So there's lots of advisory work there, but it always starts with just that feasibility. Is this right or not? Is a green light or red light?
00:15:35
Speaker
That makes absolute sense. From a timeline perspective, to operationalize implementing this model, I don't have an in-house team, but I want to have an in-house team. This is my goal. About how long would that take me to build typically if I'm going through this feasibility study starting there?
00:15:55
Speaker
So yeah, the feasibility work can happen pretty quickly. You know, it's just over a couple of months, it's mostly data driven. So, you know, a month or so to complete a feasibility and and then the variables for the timeline become the staff who, and and then the managed care side.
00:16:10
Speaker
Because you really want to try to address that on the front end. yeah Anesthesia used to thrive on an out-of-network basis, but with the Transparency Act and everything else in place out of network, that doesn't work the same. It's not good for your patient experience. It's not good for your ASC because they come back and complain to your ASC that they got this unexpected bill from anesthesia. So addressing the managed care, that possibly can be the most rate limiting factor is addressing that on the front end before you actually contractually make this happen.
00:16:36
Speaker
That makes sense. So it's a good heads up for anyone who's considering going down this path for sure. Are there any other thoughts you have on that topic? Any other words of wisdom for people considering this model or any other model really to try to get away from some of the challenges that we're facing right now with anesthesia and ASCs?
00:16:56
Speaker
you So I go back to, um, I started my first surgery center and I, uh, I was clinician, I wasn't a businessman. And I had a very simple approach and I still try to promote that approach and just kind revolves around authenticity and it's just keeping your on the prize.
00:17:12
Speaker
And so what is the prize? And the prize in our in our world, healthcare care is not supposed to be EBITDA, you know, it's supposed to be taking good care of moms, dads, brothers, sisters, daughters who are having outpatient surgery. And so just keeping your eye on that and doing that really well. My mindset was if I develop the very best product out there, it's got to work. And 25 years later, it works really, really well.
00:17:33
Speaker
And you know, the EBITDA follows it in a very successful way, but we can kind of get that backwards. And so my advice is is truly, I love the ability to try scale that because it gets lost. It it becomes a business, but it's still healthcare.
Weekly ASC Improvement Tips
00:17:45
Speaker
And so it's a little different. so ah Focus on the prize, invest in your people. I said it before, people make the place, good people make good places. And the way you do that is when more people do what you do, not what you say, you've got to be the one that cares. If you're the admin, and the CEO, if you're the nurse manager, and if you're the MDA, the anesthesiologist, if you're the medical director, show them how to care and and they'll follow what you do, not necessarily what you say. So that's my advice.
00:18:10
Speaker
that's my advice That's great. That's great. And on the topic of advice, if I could get some more words of wisdom from you for our listeners every week, we like to ask the people we have on as our guests, if you could give people advice on one thing they can do this week to improve their surgery centers, what tip would you give everybody out there?
00:18:31
Speaker
One thing, on your busiest day this week, you've got if your busy day is 20 cases or your busy day is 50 cases, on your busiest day this week, Go around, I call it patting butts and kissing babies. quick cheer Cheerlead your folks.
00:18:46
Speaker
Tell them how hard, tell them you recognize how hard they're working. You value them and then buy lunch for your center. Busiest day of the week. And just see how far it gets. just see what it does for you.
00:18:57
Speaker
It'll do wonders. I love that. A culture of caring, not just for your patients, but for your staff as well. You can't go wrong there. Exactly. Well, Wes, it has been such a pleasure talking to you about building in-house anesthesia teams, anesthesia in general, the state of ASCs. But ah we really appreciate your time and hope to have you on again. Thank you so much.
Data Analysis from Spine Centers
00:19:20
Speaker
Thank you, Alex. I really appreciate it. Awesome.
00:19:29
Speaker
HST Pathways recently released 12 benchmarking reports, with each report taking a deep dive into one single specialty at a time, comparing data from 2023 to 2024.
00:19:40
Speaker
Using our own unique data set from our clients, we were able to extract data points so that anyone in the industry could compare themselves to their peers. Two quick disclaimers, we only pulled data from clients who gave us permission and we omitted any extreme outliers.
00:19:54
Speaker
So today I want to look at data from spine centers specifically, and this data was pulled from over 131,000 cases across 300 centers from 2023 to 2024.
00:20:08
Speaker
So the first up is OR block utilization. Spine centers saw a dip in ah OR utilization from 25% down to 23%. Now this is in important and important one as always because underused OR time is a silent cost killer.
00:20:24
Speaker
In a specialty with complex resource-intensive cases like spine, low utilization not only signals inefficiency, but can also stifle case growth and revenue potential.
00:20:35
Speaker
The benchmark in many top-performing specialties hovers closer to 50% or higher, with 70% always being the goal. So 23% is both a red flag, but also an opportunity.
00:20:48
Speaker
The next is pre-auth rates. So on the bright side, pre-authorization approvals jumped from 38% to 47%, which is a major win. Why? Because denials and payment delays often stem from incomplete or missing pre-auths.
00:21:04
Speaker
This improvement suggests better workflows or payer tech adoption, and that trends translates directly to cleaner claims and fewer headaches post-op. Insurance verification rates held steady at 80%.
00:21:18
Speaker
So no change here from 2023 to 2024, but that's not necessarily a bad thing. You know, an 80% verification rate sets a stable foundation for reimbursement and operational readiness.
00:21:30
Speaker
But that said, many GI and ah CV or cardiovascular centers are now hitting verification rates in the high 80s to low 90s. So spine still has some room to grow here.
00:21:42
Speaker
All right, let's talk cancellations. So case cancellation rates nudge down slightly from 22.7% to which is a move in the right direction, but spine still has one of the highest cancellation rates of any ASC specialty.
00:21:59
Speaker
The real kicker is that a staggering 9% of cancellations were due to insurance-related issues. That's more than double the industry average of 3.6%. So that's a clear call to action for better pre-surgical financial clearance and communication between front office and billing teams.
00:22:19
Speaker
On the financial side, some mixed signals. Patient deposit collection rates rose from 65% to 67%. It's a modest gain, but in an era where out-of-pocket expenses can derail access to care, every percentage point matters.
00:22:35
Speaker
Transparent estimates and digital payment tools seem to be paying off. Meanwhile, days to bill improved. Centers are now billing on average in eight days instead of 10. That's crucial for cash flow, and a two-day gain is nothing to overlook.
00:22:51
Speaker
It reflects stronger EHR integration, better coding discipline, or hopefully both. But here's a concern, claim denial rates. So denials increase from 9% to 10%. It might sound minor, but each denied claim is a delay in revenue and a potential write-off.
00:23:09
Speaker
as the ah As claim volume grows, so does the impact. So combine that with reduced OR utilization, and we're looking at a potential margin issue here.
00:23:21
Speaker
And speaking of margins, net revenue per case took a hit. It dropped from $6,854 $6,255, which is an decline.
00:23:36
Speaker
so that's a big one with inflation rising supply costs and higher labor demands declining per case revenue can't be ignored and finally case volume The average center saw a drop in spine procedures from 65 cases to 60.
00:23:53
Speaker
So overall, fewer cases, less revenue, lower utilization. This trend isn't isolated. It may reflect broader challenges like referral leakage, patient hesitation, or network shifts amongst payers.
00:24:07
Speaker
So what's the big picture? The data tells us that spine ASCs need to double down on surgical scheduling efficiency, payer coordination, and reimbursement strategy. If you run a spine center or spine is in your specialty mix, now's the time to refine your tech stack, revisit case workflows, and consider patient education that reduce cancellations and improve collections.
Closing Remarks and Call to Action
00:24:30
Speaker
And that officially wraps up this week's podcast. Thank you, as always, for spending a few minutes of your week with us. Make sure to subscribe or leave a review on whichever platform you're listening from. ah hope you have a great day and we will see you again next week.