1. Threats to Our Prosperity Alexander A. Hannenberg, M.D. First Vice President American Society of Anesthesiologists Tufts University School of Medicine Newton-Wellesley Hospital Newton, MA

2. Woo B. N Engl J Med 2006;355:864-866 Median Compensation for Selected Medical Specialties

3. Areas of Concern  Demographics  Recalibrated Hospital DRG Payments  Rapid Growth Anesthesia Services  Shift to Quality-Based Payment

4. Unprecedented Lift in Anesthesia Work Value $16.19  $55.00 = 29.4% $20.19  $55.00 = 36.7% 2008 Best Case Scenario

5. Medicare Eligible Population Growth Sources: Projections of the Population by Age are taken from the January 2004 Census Internet Release. Historical data are taken from "65+ in the United States," Current Population Reports, Special Studies, P23-190 Data for 2000 are from the 2000 Census and 2002 data are taken from the Census estimates for 2002.) millions

6. Dependency on Hospital Support Academic Anesthesia Departments Tremper KK et al Anesth Analg 2006;102:517–23

7. Rebasing Medicare DRGS (Healthcare Advisory Board) Shifting Profit from Surgery to Medicine? Margin Utilization Cost

8. DRG Adjustments 2007 IPPS

9. The Cash Cow of the Hospital

10. Specialty Supply & Demand Residency Enrollment 1999-2007 JAMA 9/6/2000; 9/5/2007

11. CRNA Workforce 1989-2005 Grogono 2004

12. On-Call Stipend Support to Many

13. Medicare One Year Spending Growth 2005-2006

14. Responses to Rapid Growth  Medical Necessity Requirements  Payment Reduction  Less Complex Typical Patient / Service  Advanced Technology / Pharmacology  Non-Coverage Determination  Service-Specific SGR Calculation   Volume  Annual Update

15. Growth in Endoscopy Anesthesia Medicare 2003-2006

16. Anesthesia for All Endoscopy -2002 Endoscopy volume per CDC -Anesthesia Fee = 5 Base + 3.74 Time Units Medicare CF $17.76 Non Medicare CF $50

17. Aetna: May 2006 ASA 1-2: No payment in office setting ASA 1-2: Payment at Sedation Service fee in facility ASA 3-4: Base+Time Methodology All: Manual Submission & Review

18. Shift to Quality-Based Payment  Medicare PQRI 2008: $1.35 Billion  California IHA: $55 Million --> 200 groups  Massachusetts BCBS: $190 Million  Medicaid: 43/50 Programs

19.  1 of 74 PQRI Measures available to anesthesiologists  2008: 140 Measures  2 Measures for OR Practice  2 Measures for ICU Practice Opportunities for P4P Revenue

21. ahannenberg@partners.org

22. Anesthesiology Medicare:Commercial Ratio 2007 Update $16.19  $55.00 = 29.4% Bierstein K ASA Newsletter Jul07

23. Medicare Payment Increase  RUC Recommended 32% Work Value Increase  Work = 77.2% of Anesthesia CF  Maximum Impact --> $4.00 Increase (2008)  32% x 0.772 x $16.19  $16.19 --> $20.19  Other Factors  Budget Neutrality ($0.33)  Practice Expense ($0.19)  SGR Reduction ($1.95)  Expected Range: $20.19 - $17.72

24. American Society for Gastrointestinal Endoscopy Guidelines for the use of deep sedation and anesthesia for GI endoscopy “The routine assistance of an anesthesiologist for average risk patients undergoing standard upper and lower endoscopic procedures is not warranted and is cost prohibitive.” Gastrointest Endoscopy 56:613, 2002

25. Anesthesia for Interventional Radiology Medicare 2005-2006

26. Peripheral Nerve Block Procedures

27. Growth in Interventional Pain Procedures

28. Whither 1.6 Million Cataract Anesthetics? April 2007

29. California Integrated Healthcare Assn.

30. Boston Globe 5/10/06 Incentive Explosion Blue Cross Blue Shield of Massachusetts

31. Fee Increases for Quality Incentives Blue Cross Blue Shield Massachusetts 5/29/06

32. Medicaid P4P Activity

33. Variation: Anesthesia for GI Endoscopy 2% 40% Anthem-Wellpoint 2004