The good old days of February and early March are a distant memory. In Part 1 of Anesthesia Finances in the Age of COVID-19 we described the dramatic impact a projected (and increasingly realistic) 80% decrease in anesthesia group professional revenue would have on anesthesia financials with a fully supported staffing model. In a fixed subsidy the impact was up to an 87% decrease in partner physician compensation while in a revenue guarantee, using our assumptions, the hospital subsidy increased up to 66% from baseline.
Realistically, most anesthesia groups (regardless of their size) and hospitals are not going to be able to absorb such a significant financial hit for long. Most facilities have significantly reduced the number of anesthetizing locations as elective cases have disappeared, and many previous subsidy support levels have been dramatically reduced or eliminated. We are aware of one large hospital system that has already asked many of their anesthesia groups to take a 50% subsidy reduction for the next 90 days and one smaller anesthesia group that has agreed to reduce their subsidy by the same percentage (20%) the hospital reduces it’s employed surgeon’s compensation.
Our objective for this installment of our series is to model the impact of several examples of these changes on anesthesia group finances.