In this article, we explore why costs are escalating across the industry and how hospital leaders can shift to strategic cost containment and investment. Discover actionable ways to manage your spend while maintaining a focus on quality and patient experience:
- Optimize your OR grid
- Reduce locum reliance
- Optimize Revenue Cycle Management for Anesthesia’s Distinct Needs
How to Contain Anesthesia Costs
By Kurt Jones, M.D., M.B.A - Chief Clinical Officer (USAP) | Sean Sipko, Executive Vice President - USAP Business Development
Hospitals across the country are facing an uncomfortable truth: Anesthesia costs are growing — sometimes quickly and without a clear understanding why.
Financial pressure is mounting from all sides. According to a recent report, Medicare reimbursement for anesthesiology dropped 9.5% in 20241, one of the steepest cuts across all specialties. At the same time, clinician compensation continues to rise by at least 3% annually, and many anesthesia service agreements now include inflation-linked escalators tied to the Consumer Price Index or fixed percentage increases.
As a result, many hospital leaders are watching their anesthesia costs expand year over year — with little control and few options. But with the right data and a focused anesthesia strategy, they can take steps to keep those costs in check while maintaining a focus on quality and patient experience.
Here are three proven ways hospital leaders can better manage anesthesia spend — and shift from reactive increases to strategic cost control.
1. Optimize Your OR Grid
Anesthesia is a critical component of surgical services — one of the most economically and strategically important parts of a hospital. Yet many ORs function below their potential due to underutilized rooms, inefficient scheduling and/or a mismatch between staffing and demand.
By leveraging appropriate data, hospital partners can identify costly inefficiencies, such as unused block time or avoidable second shifts. For example, a USAP partner hospital used caseload data to set a 55% utilization threshold for block time. Surgeons who didn’t meet that benchmark lost their block, creating opportunities for more efficient, revenue-generating cases. The result? Better OR efficiency for anesthesia and the hospital without adding rooms or staff.
Sometimes, it’s not about adding capacity — it’s about using what you already have more wisely. Improving efficiency can help reduce anesthesia costs.
2. Reduce Reliance on Locums
Hospitals that rely heavily on temporary anesthesia staffing are paying a steep premium. As hospitals know firsthand, a 2023 NIH study found that locum coverage can be 65% more expensive than full-time anesthesiologists2. Hospitals using locums labor for extended periods in either employed programs or with other anesthesia partners have experienced significant financial costs not to mention the impact on perioperative teamwork and culture.
Reducing locums dependency requires proactive recruiting and long-term workforce planning. As is often said, “posting an open position on gaswork.com in not enough.” By partnering with an anesthesia provider with a recruiting system that includes partnerships with training programs, a national recruitment network hospitals can reduce the likelihood of needing premium labor to augment full time staff, reducing costs and improving teamwork and culture as a result.
3. Optimize Anesthesia RCM, Distinctly
Effective revenue cycle management (RCM) is important for all specialties of course, but the distinct challenges are sometimes underappreciated. For example, anesthesia clinicians do not bill using relative value units (RVUs) like other specialties but instead bill based on anesthesia units which have both a base amount and a time-based component. Moreover, the rules for medical direction and medical supervision when practicing care team models have evolved over the years. And, there is also the challenge of capturing patient care activities and corresponding charges for unscheduled care outside the OR such as epidurals. These challenges are just the tip of the iceberg of what makes it so crucial for hospitals to ensure their inhouse anesthesia or private practice partner has optimized RCM for the distinct challenges of anesthesia.
In analyzing your RCM performance, a good place to start is an accurate measurement of “net collection rate” for anesthesia claims, but a common mistake is to use “charges” as the denominator rather than “allowables.” Clean claim , self-pay-after-insurance and return-to-provider percentages are also key performance indicators that should be considered in analyzing your RCM performance.
As with any professional services organization, better collections from improved RCM performance directly impact the bottom line and can be significant. For example, two Midwest practices that joined USAP in 2022 saw 5% and 19% improvement in collections respectively, not to mention improved patient and provider satisfaction.
Let’s Take Back Control of Anesthesia Costs
The cost of anesthesia isn’t going down. But that doesn’t mean you’re powerless. With the right partner, hospitals can take a proactive, collaborative and data-driven approach to minimizing anesthesia expenses in a more strategic way. By building smarter systems that align operations with outcomes, hospital leaders can regain control, drive efficiency and improve performance. That’s where USAP comes in.
We meet with partner hospitals regularly to review performance, identify inefficiencies and refine plans. We don’t just show up with an invoice. We show up with solutions. That’s the USAP way.
Looking for a more strategic approach to anesthesia? Connect with a USAP expert and discover how smarter anesthesia management can support your hospital’s financial and clinical goals.