The Business Psychology of Anesthesia Practice

Private practice–
your next adventure
Tom Archer, MD, MBA
UCSD Anesthesia
What Do All of These Jobs
Have in Common?
We are all workers in service
Does This Fact Make You
Competition Implies That the Customer is Free to
Choose Between Competing Alternatives
• Aren’t we doctors above that?
• Doesn’t competition lead to haste and errors?
• Isn’t competition grubby?
• Shouldn’t the public just trust us to do the right
A fact of life in private medicine.
You are competing with other
anesthesia groups and with other
anesthesiologists in your own
The challenge is to maintain a
high level of service without
compromising safety.
Whether you like it or not,
personal relations are every bit as
important as technical or “medical”
The 3 “ables” of the
anesthesiologist: Available,
Affable, Able.
Arrogance or Apathy– Not an
• You will be expected
to be a “team player.”
• If you are apathetic or
• Your customers will
take their business
The Patient as Customer
• Patients are more demanding than 30
years ago.
• Scrutiny of medical practice (by everyone)
has intensified.
• Physician is still a respected authority
figure, but…
• Physician must realize that she has to
please customers and is part of a team.
• The days of prima donnas are over.
Are We In Business?
Or Are We Practicing Medicine?
• Isn’t business all
about money?
• Doesn’t business
subordinate quality,
ethics and patient
care to the Almighty
Are we in business?
Or practicing medicine?
• Is there a conflict
between business
and medicine?
• NO!
• Good medicine
implies good
business, and vice
The business of medicine
• Efficiency, quality and customer service
never go out of style.
The Business of Medicine
• In a competitive health care environment, providers
will give the best care they can at the lowest price.
• Competition fosters improvement and innovation.
• State health care monopolies foster slow, inefficient
and bureaucratic care.
• Academic medicine frequently lacks incentives for
production (monopolistic mind-set).
Good doctors and
good business people:
• Give the best customer service they can
(technical care, bedside manner,
punctuality, courtesy).
• Don’t waste time or resources.
• Know their customer’s needs and wants.
• Know how to work in teams.
Service and safety issues
• Safety Issues are sacrosanct and must not be
• Service issues (start times, cases on Saturday
and Sunday, after midnight, etc.) are negotiable.
• You need to clearly understand the difference.
• Monopolies (us?) often camouflage a desire to
avoid service as a safety issue.
Customers and the Golden Rule
Modern business philosophy:
patients, family, surgeons, nurses,
administration, technicians– these
people are all our CUSTOMERS.
This is really a restatement of the
Treat your customers– your fellow
human beings-- with respect and
with consideration for their
aspirations, needs and fears .
Private practice– what will it be
Possible contrasts with
academic medical centers:
– Faster pace (no one is in
– Great emphasis on good
interpersonal relations
(being nice) and consistent,
good results. No rewards for
originality or extra frills.
– Emphasis on collegiality
rather than conflict
(everyone’s earnings
depend on everyone’s
– Pay is based on cases
performed– not on salary.
Anesthesia groups are not all the
Anesthesia Groups
• Look at more than just:
– Types of cases and how much money you will
– Work hours, call schedule, vacations and
CRNAs supervised.
Your Job is to Get Behind the
Window- Dressing and Find Out
What the Group is Really Like.
Anesthesia Group Culture
• Some groups are
healthy and promote
the happiness and
prosperity of their
• Other groups are
dysfunctional and full
of psychopathology.
What Does Your Gut Say?
• Do people seem happy?
• Do group members seem
to like one another? Or
do they gossip with a
newcomer like you?
• Do members appear
over-worked, unhappy,
and yet greedy for more
Are New Group Members Treated
• They get poorly
paying cases.
• More nights and
• Buy-ins are
• Many new hires don’t
make partner. They
get booted out before
they become eligible
for partnership.
How are the MDs compensated?
• What is the incentive
• What behaviors are
• What behaviors are
Straight Salary
• You get paid the same whether
you do a lot of cases or not.
• More common in academic
• Does NOT reward production
or efficiency.
• Disadvantage: slackers can
slack off.
• Big advantage: allows time for
teaching, research, innovation
and careful, methodical care.
“Eat What You Kill” (Type 1)
• “Fee for Service” from
individual patient.
• You receive specific collections
from patients whom you
• If you have indigent patients,
you earn ZERO!
• If you have all insured patients,
you earn mega-bucks.
• FTC: Price-fixing via sham
• Fraught with abuse potential–
schedule manipulation, etc.
“Eat What You Kill” (Type 2)
• “Fee for Service”
(Based on Group
Average Unit).
• Money is pooled for
entire group. Your
month’s income =
Group’s Total
Collections X (Your
Units / Total Group’s
“Eat What You Kill” (Type 2)
• In my opinion, EWYK
Type 2 is the best system
for private practice.
• This system rewards
work and efficiency and
ignores payer mix.
• Schedule manipulation
and lies just stop.
Do You Hear About Conflicts Over
Anesthesia Service?
• Do surgeons want more night
and weekend coverage than
group wants to provide?
• Do the anesthesiologists have
a “can-do” service orientation?
• Does the group work with
nursing and administration to
provide service as a team?
• Or does the group blame
nursing or other hospital
employees for inadequate
Who runs the group?
• A group of old
cronies, in a murky
and capricious
manner? Or…
• An elected Board of
How does the medical community
view the anesthesia group?
• As money-grubbing
technicians? Or…
• As team players?
Is the “group” really a group, with a
clear business purpose?
• Yes, the group takes care of
all the patients in an
efficient and compassionate
• No, the so-called group is a
loveless marriage of
convenience between
competing individuals.
A Good Anesthesia Group
• Healthy, happy individuals, who enjoy
caring for their patients.
• Internally, the group functions as an
anesthesia team, with a clear business
• Minimal to no schedule manipulation,
cheating and lying.
A Good Anesthesia Group
• Externally, the group works constructively
with nursing and hospital administration to
provide care as a hospital-based team.
A Good Anesthesia Group
• The compensation structure aligns
individual incentives with business goals.
• Best system is income pooling with
individual compensation proportional to
services provided.
• Individuals who participate on Medical
Staff and hospital committees are
respected and rewarded.
The New Member (You)
• Well trained.
• Knowledgeable.
• Eager.
Advice for the new member:
• Be humble– there’s more than one way to
skin a cat.
• Ask lots of questions– and learn!
• Try to understand why they do what they
do– it MAY make sense! (Or it may not!)
• Ask the established and respected
practitioners how they would do things.
One Final Note
• Try really hard to be respectful, pleasant and
courteous to EVERYONE.
• I am VERY serious about this and this is VERY
• Arrogance and being a jerk is our most common
• This point has nothing to do with your “technical”
care, but it has everything to do with your
success in your new work environment.
Good Luck!

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