Answer: Availability cost is the cost of staffing the requested coverage, including time without cases. Completed case revenue is the revenue the team generates through case activity. Low delivery volume does not remove the staffing commitment. A business executive frames the gap between team revenue and team cost as the subsidy the hospital must make up.
The short answer
The hospital is asking for physician availability around the clock. That request concerns staffing. Completed cases concern the activity that generates revenue. These are related parts of the financial picture, but they measure different things.
An anesthesia executive calls anesthesia a capacity cost because a provider must be staffed in a room throughout the day regardless of case volume. In that explanation, fewer cases do not remove the need to staff the requested coverage.
For your obstetric coverage discussion, the central distinction is straightforward: maintaining availability requires a team, while completed cases generate revenue. The financial comparison is between what that team costs and what it can generate.
What usually goes wrong
A practice management executive says hospital administrators want continuous anesthesia coverage but resist paying providers for time when they are not caring for patients. That creates tension when the requested availability extends beyond the hours occupied by cases.
Low delivery volume describes case activity. It does not, by itself, describe the staffing commitment needed to keep a physician available. Counting completed cases answers a different question from identifying the team needed for coverage.
A practice management consultant identifies another part of the same problem: generating enough revenue to recruit and retain sufficient qualified providers to meet facility coverage needs. The revenue discussion therefore connects directly to maintaining the team that provides availability.
What a veteran checks first
- The distinction between requested physician availability and completed case activity.
- The staffing commitment associated with continuous coverage.
- The relationship between team revenue and team cost.
- The recruitment and retention needs associated with facility coverage.
- The role of hospital subsidy support in the business executive's explanation of a revenue shortfall.
How the costs fit together
The anesthesia executive's capacity cost explanation puts staffing at the center of the comparison. A provider must be assigned regardless of how many cases occur. Completed case volume alone therefore does not measure the commitment involved in maintaining coverage.
The practice management consultant connects revenue with recruiting and retaining enough qualified providers. From that perspective, the business question includes whether revenue supports the team needed for facility coverage.
An anesthesia practitioner gives an obstetric example. A hospital wanted physician coverage for labor and delivery, with a physician nearby rather than necessarily inside the hospital. The practice added people and changed its scheduling to provide continuous coverage. The example shows how a coverage request can affect both staffing and scheduling.
Immediate availability is the requirement in question. The practitioner's example involves a nearby physician. Keeping that distinction clear helps frame what availability the hospital is requesting and what staffing commitment is being discussed.
A business executive explains the funding comparison as team cost against the revenue the team can generate. In that executive's framing, the shortfall is the subsidy the hospital must make up. This separates the revenue from completed cases from the cost of maintaining the coverage team.
Questions to bring to the partner meeting
- What physician availability is being requested?
- What staffing commitment does that availability represent?
- How does completed case activity relate to the requested coverage?
- How does the team's revenue compare with its cost?
- How does hospital support fit into the discussion of any shortfall?
Sources
- Adam Spiegel, CEO of NorthStar Anesthesia
- Jeff McLaren, CEO and founder of Med Action
- Jody Locke, MA
- Tom Ellis
- Tony Mira, President and CEO
