We can help you to assess and improve your performance of your professional services agreements.
See how we helped a large not-for-profit health system to stabilize coverage across 150 different anesthetizing locations!
Determining how to align and engage anesthesiologists is critical to developing effective clinical partnerships and ensuring anesthesia teams are fully integrated. Strong alignment supports collaboration across surgical services, quality and safety initiatives, and workforce planning, while enabling anesthesiology groups to identify opportunities for continuous improvement and help health systems achieve key strategic and financial objectives.
These efforts can be supported by developing the right anesthesiologist–hospital affiliation models to address evolving workforce needs, including coverage requirements, care team optimization, subspecialty expertise, and call responsibilities.
While professional services agreements (PSAs) can be an effective strategy for securing and stabilizing anesthesia coverage, health systems must ensure these arrangements are structured to support operational efficiency, compliance, and long-term financial sustainability.
What were this system’s challenges, how did we approach them, and what were the outcomes?
CHALLENGES
- Independent Group struggling with recruitment and retention due to reimbursement challenges and increasing market pay
- Critical need for significant increase in annual subsidy to maintain Group viability and anesthesia coverage
- Costly physician-heavy staffing model with 220 anesthesiologists and 10 CRNAs
- Compressed timeline to renegotiate PSA set to terminate in 3 months
- Limited system experience negotiating agreements at this level of investment and complexity
- Regional issues with anesthesiologist collaboration w/ providers and staff and misaligned coverage expectations
APPROACH
- Assessed Group’s operational and financial performance – including insurance collection and denial rates
- Established a playbook for the organization to prepare for the negotiation process and align on key financial and business terms
- Modeled OR utilization to determine the appropriate number of anesthesiologists and CRNAs required across all locations
- Replaced hourly transactional approach with shift-based model to determine FTE requirements and associated funding levels
- Led negotiation of financial terms and performance metrics, reviewed contract language, and evaluated proposed terms to ensure regulatory compliance
OUTCOMES
- Stabilized Coverage: Negotiated PSA terms to include clear performance expectations and metrics and identified the optimal number of providers to satisfy coverage needs.
- Transitioned to a New Model of Care: Established clear expectations and a potential roadmap for a care team transition within the term of the agreement.
- Enhanced Service Line Strategy: Developed a sustainable anesthesia strategy to best meet organizational goals and surgical services growth.
- Improved Financial Performance: Determined appropriate subsidy to support market-competitive and compliant compensation with a plan for review of collections to validate the subsidy in future years.
- Enabled Effective Governance: Created model for ongoing relationship management – including supporting contract language, a guide to manage JOC responsibilities, and provided orientation for the health system for their work with the group under the 3-year agreement.
Is it time to renegotiate?
Professional services agreements are an integral part of a health system’s physician and service line strategy.
Selecting the appropriate model, designing effective terms, and monitoring compliance and performance are critical to driving desired results.
