With Long-Term Vision and a Strong Foundation in Clinician and Patient Care Excellence, NorthStar Is Poised to Accelerate Its Success in 2023
January 2, 2023 - by Adam Spiegel, CEO of NorthStar
As we open 2023 and reflect on how challenging the last few years have been as an anesthesia provider, both for our individual clinicians and our corporate teams, I thought I’d share why I’m so proud of what we have accomplished.
The last three years of the pandemic presented serious challenges to all clinical leaders in health care. NorthStar was not immune to these headwinds, but, because of our solid foundation aimed at succeeding over the long term, it has been a remarkably successful three years for us, and we are poised for an even stronger 2023 and beyond.
Our Long-term Focus is Different by Design
The seeds of this progress go back to the partnership with Cranemere in 2018. As a provider of permanent capital and expertise, Cranemere brings a long-term perspective on business building and partnership with management teams. Cranemere provides capital for growth and substantive sector expertise to create real and lasting partnerships with our customers, employees and broader community. Since Cranemere acquires businesses for the very long term, NorthStar and Cranemere’s other companies do not operate under pressure to cut costs and drive short-term gains. Instead, we can focus entirely on making good decisions that will benefit all of our stakeholders and build sustainable growth and value over the long-term. Cranemere’s track record bears out the reality of this promise – Cranemere continues to own each of the companies it has acquired since its inception in 2014.
When I accepted the role of NorthStar CEO a little over four years ago, this was the ownership model that appealed to me. By contrast, the short-term focus and the buy-and-sell cycle of other investors in healthcare companies seemed to me to be the opposite of how to build long-term value and provide quality patient care. I shared Cranemere’s approach of having a vision for the long term, something that I thought was critical to the mission of bringing healthy and sustainable growth to a practice management firm for an area as crucial to patient care as anesthesia. The model has also allowed us to distinguish ourselves from large anesthesia players that are owned by firms with more common business models. Unlike NorthStar, many of our peers can face ongoing financial pressure due to leveraging and being highly dependent on high-reimbursement payer contracts, which are increasingly hard to obtain. It's no coincidence that over the past year several peers with significant scale have indicated a desire to exit through a sale or similar transaction, while NorthStar keeps our laser focus on building sustainable growth for the long-term.
Investing in Our Team
The great results NorthStar has been able to deliver for our patients, clinicians, and our hospital partners, including how well we have weathered the pandemic storm, are a direct result of our model.
For example, since 2020, while COVID-19 upended healthcare and many companies were forced to make difficult decisions, NorthStar stood out among its peers by prioritizing our team members and putting clinicians first:
- We kept our clinical teams whole while other businesses reduced headcount;
- We purchased and distributed PPE to clinicians across the NorthStar footprint;
- We enabled clinicians to leverage continuing education and continuing medical education funds to purchase PPE for themselves;
- We provided COVID-19 PTO to clinicians who tested positive for the virus; and
- We increased clinician compensation to retain talent while focusing on partner negotiations.
To boost recruitment and solidify NorthStar’s standing as a practice leader in anesthesia, we also invest consistently in research, residency, Student Registered Nurse Anesthetist (SRNA) training programs and leadership development. Specifically, over the last two years, we brought 72 residents into our ranks and placed 117 SRNAs at NorthStar sites, and NorthStar leaders published more than 25 peer-reviewed articles in industry journals.
Investing in Quality Outcomes
Since 2019, we have also established NorthStar’s Office of Clinical Quality, which works to instill high quality clinical performance across our sites. This has resulted in notable regulatory recognition. In 2019, under the Merit-Based Incentive Payment System for the Centers for Medicaid and Medicare Services, 92% of NorthStar’s clinical sites received an “Exceptional Performance Payment Adjustment” for high quality scores. In 2021, with an even higher threshold set by CMS, this score rose to 97% even amid numerous challenges caused by COVID-19. And, for 2022, I am proud that we are on track to repeat or exceed that performance.
The Office of Clinical Quality also focuses on identifying opportunities to improve clinical practice across the field of anesthesia, and on implementing them at scale. For example, teams across our footprint regularly collaborate with surgeons, nurses, and other clinical providers to develop pathways of care that put the patient at the center. This collaboration is part of a larger care program called Enhanced Recovery After Surgery (ERAS) -- a longstanding, proven pathway of care in surgery, providing significant improvements in the quality of care delivered.
Investing in Patient Safety
A critical component of ERAS is the use of opioid sparing techniques. In 2020, for example, our clinicians at Norton Hospital in Kentucky cut opioid use in half for spine patients by using non-opioid medications and increasing the usage of nerve blocks. Since then, our teams have increased nerve blocks alone by nearly 300% with improved patient outcomes and patient satisfaction.
Expanding Access to NorthStar’s Industry-Leading Standard of Care
Over the last four years, we have nearly doubled the size of NorthStar’s operations primarily through organic growth, enabling us to greatly expand access to high-quality anesthesia care during a time of exploding demand. To get granular, in the last two years alone, we have onboarded 128 new anesthesiologists, 401 new CRNAs, and added 48 new NorthStar sites through organic growth. In 2022, we cared for approximately 1 million patients and completed approximately 1.2 million cases across our 22 states.
These are all areas in which we have substantially invested and will continue to invest. We have done so because we know these investments translate to quality patient care, recruiting and retaining the best talent, and best serving our hospital partners, all of which will have impact over the long run.
The buds of these investments are just starting to bloom, which is why I believe NorthStar is so well-prepared not only to withstand the industry challenges we know we face in 2023 and beyond but to reach even greater heights.