1. MNASCA ANNUAL EDUCATION CONFERENCE APRIL 14-15, 2011 Presented by: Mary Sturm, Sr. VP Clinical Operations Surgical Management Professionals

2. Strong Anesthesia Relationships for a Strong Center Presented by: Mary Sturm, Sr. VP Clinical Operations Surgical Management Professionals

4. Goals of Anesthesia in an ASC Must Drive Value and Improve Quality

5. Anesthesia Business Models Traditional model Employment model Owner Provider Model

6. Traditional Model Independent group practice model is most common Pros  Typically do not receive compensation from ASC  In a large metro area- may be able to “ shop” providers  Can attempt to cover service levels in contract language Cons  ASC may have less control (even with a contract in place)  Smaller markets may only have one game in town  Can bring hospital mentality to the ASC  Can be more complicated if anesthesiologists and CRNAs have separate contracts with center

7. Employment Model Pros  More control  Can be a revenue center  Can be a recruitment benefit (life style) Cons  Typically salaried, so center assumes risk of compensation even when volumes are low  Recruitment can be difficult in some markets

8. Owner Provider Model (not common in Midwest) A separate anesthesia corporation is established under the same ASC ownership as facility. Anesthesia technical and professional fees are billed thru this corporation and profits are set up as distributions to the owners. The income for anesthesia providers is typically less than if they billed separately. –model is prevalent in GI centers in southern states. Potential for corruption of medical judgment and potential for kickback concerns

9. Current and Future Supply and Demand of Anesthesia Providers

10. Anesthesia Supply Side Average age of MDA and CRNA in United States is 49 Steady decline in # of graduating anesthesiologists 54% of states report shortage on MDAs 60% of states report shortage of CRNAs Surplus of CRNAs predicted by 2020

11. Anesthesia Demand Side Demand for anesthesia service in ASCs grew 300% in last ten years Aging population increases need for anesthesia services

12. Anesthesia Clinical Models Anesthesia Care Team (ACT) is prevalent in most prevalent in Midwest MDA supervising CRNAs (up to four per MDA) Data to show cost effective as well as quality delivery model Minnesota has been “opt out” state since 2002

13. The “Culture” of Anesthesia Are anesthesia providers in the service business providing anesthesia? OR Are anesthesia providers in the anesthesia business providing service?

14. Strategies for “On Boarding” Anesthesia Clinical competence, safety, patient outcomes are assumed. Selection and control on specific anesthesia providers in the ASC Clinical competence in ancillary services such as pain management program, regional anesthesia Provides the same culture of flexibility that you expect from ASC employees

15. “On Boarding” Anesthesia – cont’d Engagement in ASC center activities – Policies and Procedures – Compliance with Infection Control Policies – Protocols for pre op phone calls and patient management – Engagement in QI – Mandatory education compliance – Expectations for expense management (supplies & pharmaceuticals)

16. Some Potential Hills to Die On Restrictive clinical guidelines for patient acceptance (i.e. BMI) Restrictive policies on surgery schedule start and end times Restrictive policies on opening another OR Restrictive policies on same day add- ons Rush to discharge or transfer patients late in the day

17. Anesthesia Providers as ASC Shareholders Align Incentives Wherever Possible Anesthesiologist who perform pain procedures as ASC Investors Safe Harbor Implications If anesthesia providers are not performing procedures per se, may consider model of real estate investment opportunity

18. Conclusion An effective anesthesia model should be a thing of beauty