Anesthesia Coverage Shortages — Exploring An Overlooked Long-Term Valuation Headwind

The shortage of anesthesiologists (ANs) and certified registered nurse anesthetists (CRNAs) in the U.S. has become a significant challenge in certain markets. Scarcity in this critical area of health care can disrupt the provision of health services and care quality, and potentially impact the valuation of health care facilities. Some factors contributing to this issue include:

• Growth of elective and outpatient surgeries/procedures: The number of elective and outpatient surgeries/procedures requiring anesthesiology, particularly in the nonoperating room setting, has grown considerably. Nonoperating room settings of care now account for over 50% of all anesthesia services by some accounts, according to an article published in “Anesthesia & Analgesia" and include various diagnostics and minimally invasive procedures (e.g., colonoscopies/endoscopies, interventional cardiology, interventional radiology, neurosurgical magnetic resonance imaging (MRI), etc.). At the same time, proportional demand for all surgical services due to the rapidly aging U.S. population is creating accelerated demand for the services of ANs and CRNAs.
• Slow relative supply growth: According to “Anesthesia Workforce Trends," the number of active ANs has grown approximately 2.5% annually from 36,813 in 2012 to 42,762 in 2024. Over the same period, the number of CRNAs has been growing 9.2% annually, which has served to partially relieve coverage gaps, especially in markets that employ a team approach to coverage (i.e., AN supervision of multiple CRNAs). Today, there are 17% more CRNAs than ANs.
• Inefficiencies and increased down time: A mixed shift towards covering labor and delivery departments restricts daytime availability for strictly surgical/procedural cases. Additionally, schedules that cater to surgeons may create additional inefficiencies for ANs and CRNAs (e.g., unfilled block times, flexible start times, flip rooms, etc.). AN or CRNA travel times to different care settings (e.g., hospital, ambulatory surgery center, endoscopy suite, etc.) throughout the day can also be an issue.

By the Numbers

The National Center for Health Workforce Analysis extensively studies supply and demand for health workers to aid in governmental and industry decision-making. The table below shows projected adequacy levels for various physician specialties to the year 2037.

HRSA Health Workforce, Physician Workforce: Projections 2022-2037, November 2024

• There are physician adequacy shortages in most surgical specialties. It’s important to note that shortages in some specialties may be partially offset by increased use and scope-of-practice of nurse practitioners.
• Because anesthesia is needed for most surgeries and a growing list of outpatient procedures, AN adequacy levels uniquely impact the capacity and throughput for all other surgical/procedural specialties.
• The adequacy level of ANs is projected to be lower than comparable figures for most major surgical specialties.

Why It Matters

• The surgeries/procedures requiring an AN or CRNA are oftentimes the most profitable activity for the applicable facility owner whether it’s a hospital system, ambulatory surgery center, specialty practice, etc. Without the ability to obtain or expand AN or CRNA coverage, case growth will likely be challenged.
• There is fierce competition to secure ANs and CRNAs coverage, leading to higher facility costs, including:
  • Hospitals and ambulatory surgery centers are increasingly having to pay subsidies to secure AN and CRNA coverage of their operating rooms and/or labor and delivery departments. All else held equal, these payments may introduce a new paradigm in the cost structure for such facilities.
  • Nonoperating room settings of care are having to offer higher guaranteed amounts (e.g., increasing guaranteed daily rates) to ANs and CRNAs to secure coverage leading to lower profits.

Health Care Valuation Takeaways

• Understanding local AN and CRNA market dynamics has become critically important when performing the valuation of any operation that relies upon surgeries/procedure volumes (e.g., hospitals, ambulatory surgery centers, etc.). AN supply dynamics may have significant implications for future case growth, profitability levels and risk.
• A valuation professional should also consider an operator’s ability to offset current or long-term deficiencies in AN and CRNA coverage, or other increases in costs, with alternative strategies.
• In markets where CRNAs are performing a larger percentage of the case volume, the valuator should understand the state laws around such license limitations.

It’s important to understand how anesthesia coverage shortages can impact the valuation of your health care facility. As the health care industry evolves in this space, our team can help you navigate the challenges and tailor solutions to meet your specific needs. Contact us today.