Wrapping Your Head – And Your Wallet – Around Value-Based Reimbursement

You no doubt know by now that value-based reimbursement is replacing fee-for-service medicine as the preferred method of paying healthcare providers for their services. We believe that paying for outcomes rather than processes is great for patients. It incentivizes providers, including anesthesiologists and certified registered nurse anesthetists, to do the right things rather than just do more things.

What you may not know is that value-based reimbursement models create a sort of double jeopardy for anesthesiologists and CRNAs in terms of how they’re paid for their services. Consequently, it’s becoming doubly important for anesthesiologists and CRNAs to move outside their comfort zone and assume more responsibility and accountability for producing the best possible clinical outcomes for their patients in the most cost-effective manner possible.

The compensation for anesthesiologists and CRNAs comes in two parts. The first part, which typically represents two-thirds of total compensation, is the professional fees they collect from public- and private-health insurers for the services they provide to patients. The second part, which typically represents one-third of total compensation, is the stipend they receive from the hospital or ambulatory surgery center where they provide their services.

Value-based reimbursement systems put both of those sources of income at risk but in different ways. Let’s use a bundled-payment agreement for knee replacement surgery to illustrate the point. Under the contract, a health plan pays the hospital a fixed fee for all the inpatient and outpatient services provided to the patient by the hospital, the physicians and all the other caregivers involved, starting at 30 days before surgery and up to 90 days after surgery.

If all goes well, the plan pays the hospital, and the hospital pays all the other providers, including the professional fees to the anesthesiologist or CRNA involved in the procedure. A piece of the hospital’s share of the payment helps finance the stipend it pays to the anesthesiologist or CRNA.

If all doesn’t go well, and let’s say the patient develops a surgical site infection two weeks after the procedure. The patient goes back into the operating room suite to have his or her knee drained and the infection cleaned out. Under the bundled-payment agreement, the health plan doesn’t pay extra for the additional procedure. There is no additional professional fee paid to the anesthesiologist or CRNA. The additional cost eats into the money that the hospital uses to help finance the stipend. And, by tying up the operating room suite for a do-over, you’ve eliminating a surgical slot for a new case that would generate additional revenue to pay the professional fee and help fund the stipend.

Not producing the desired clinical outcomes for patients hits anesthesiologists and CRNAs in their pocketbooks two ways under value-based reimbursement systems like bundled-payment deals.

We think anesthesiologists and CRNAs can improve clinical outcomes, enhance the patient experience and, as a result, mitigate the financial risk to their incomes by getting more involved in each phase of the perioperative continuum, from helping patients make the right surgical decisions to helping them follow post-discharge instructions. There are multiple points along that continuum at which anesthesiologists and CRNAs can use their knowledge, experience and skills to ensure that patients are receiving the optimum level of care and service that will lead to a successful outcome.

It’s time for anesthesiologists and CRNAs to stop thinking that their job starts and stops at the entrance to the operating room suite. It’s time for our profession to see its job as the entirety of the patient’s surgical experience. That shift in thinking will produce better outcomes for patients and better business results for anesthesia services.