Moving Forward: Options for Akron-Canton Cardiac Anesthesiologists

Gabe GanSuzanne KirkendallDerek FineSteven HefterMichael Novello

Columbia University Mailman School of Public HealthOctober 29, 2016

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Agenda

• Objectives

• Trends in the anesthesiology space

• Evaluation of growth options

• Recommendations

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Objectives

To address:

• Internal organization & operation of ACCA, including resolving issues between CAs and NCAs

• Direction of ACCA as an entity, including a full analysis and specific recommendations regarding the potential ‘pathways to the future’

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Acquisition by National Anesthesia Group1

Advantages- Injection of capital- Increased bargaining power in negotiation of reimbursement rates- Financial security against downward trends in marketplace

Challenges- Loss of autonomy- Decreased pay for all shareholders over time- Less long-term financial security for junior shareholders

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Sell to a Venture Capital Firm2

Advantages- Leadership at top of firm remains in place- Can hire management consultants to resolve internal conflicts- Injection of capital for reinvestment in ACCA

Challenges- Fails to directly address internal conflicts- Heavy focus on profit margin could lead to dilution of quality of care

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Be Absorbed by St. Frederick Hospital3

Advantages- ACCA and SFH administration are already linked- Doctors maintain same roles within hospital- Provides stability against changes in marketplace

Challenges- No injection of capital- SFH’s position within larger CHS network may cap earning potential - ACO model provides incentive for SFH to reduce physician compensation

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Remain Independent4

Advantages- Allows profit allocation issues to be adequately addressed- Preserves ACCA’s autonomy and doesn’t jeopardize ties with SFH

Challenges- Fails to follow market trends- Better-funded groups could outcompete ACCA in local market- No injection of capital

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Merge with Canton Anesthesiology Assoc. (CAA)5

Advantages- Retains profit-sharing system and clinical responsibilities- Lowers overhead due to economies of scale- Offers potential for future expansion within CHS hospitals

Challenges- Merger costs, including M&A consulting, accounting, and legal- Different payment systems

Reducing Merger Costs

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Payment Model for ACCA-CAA Merger

Cultural Cohesion

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Potential for Future Expansion

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Questions?