The Anesthesia Workforce Shift: 3,000 CRNA Grads, Failing AA Bills, Lost Contracts

Randy: [00:00:00] I'm frankly very disappointed in Tracy's overall skepticism and attitude. I think he fails to appreciate how important it is for UnitedHealthcare to deliver, uh, revenue or margin or dividends to their stakeholders and their investors. So I, I, I don't want any part of this conversation

Joe: Well, welcome back. I'm gonna be audacious and introduce this as the number one anesthesia podcast in the world. Uh, Randy Moore, you're back. Good to see you. 

Randy: Good to be back. 

Joe: Good to see you, man. And Tracy Young, an established and well-respected voice, also doubling as the Dos Equis advertising man today, looking handsome as always, as always.

Tracy, uh, you've been on Anesthesia Deconstructed before. Now we're on About the Rest, which is a podcast about anesthesia, business, performance, and leadership. You check all three. Thank you for being on. 

Tracy: Happy to be here. Thanks for having me. Yeah. 

Joe: Yeah, [00:01:00] yeah, yeah. So let, let's get right into the docket here, guys.

I'm gonna share very briefly the first item on our agenda is anesthesia reimbursement. So I'm gonna f- share a few headlines from the week. This is from May 18th, just last month. All sorts of headlines in reimbursement this past month. This, Brian, is actually from my area in Phoenix, Arizona. The potential fallout of UnitedHealthcare's billing policy when reimbursement ignores risk, and effectively what this is, UnitedHealthcare is now not reimbursing.

We've seen this for a long time, not reimbursing for PS status or ASA status. Oklahoma just passed legislation last month to stop this from happening. You can see it on the screen there, physical status III, IV, and V. It requires payment for these things. This was an, an Oklahoma Association of CRNAs-supported bill as well.

Uh, we had this issue in Arizona, have some big costs. This is ef- effectively the, the argument was cost shifting. And finally, Louisiana also passed a reimbursement bill [00:02:00] Coming at it at a different angle, at the 15% angle. So with all that being said, Tracy, you're, you're well known for your reimbursement expertise.

You're well known for your legislative expertise. You know how the sausage is made. What are your thoughts here? 

Tracy: Look, the, um, this is all part of a larger trend, right? The commercial insurance industry and even the government payers, they, they've been devaluing anesthesia services for years. What, what we're seeing in these more recent trends with the QZ reimbursement cuts, with the physical status modifier cuts, are more creative ways from commercial insurance companies to do what they ultimately want to do, which is to increase their profits, right?

They're publicly traded companies. They're driven by, by profit motive and, you know, right, wrong, or indifferent, that is a very, very high priority for them. So when you're dealing with commercial insurance companies, you have contracts with them. You're in-network. They have contracts that they have to follow.

They draft those contracts, and they put a lot of [00:03:00] favorable terms in those contracts for themselves, and a lot of those favorable terms are things like, "Hey, we can change our policy on reimbursement." And when we change our policy, it doesn't cancel the contract, but it allows them to do things like this to increase their profits without having to renegotiate their contracts.

And, and look, anesthesia is easy to pick on. We're, uh, and I think we could debate this. Uh, it's debatable whether or not we're a commodity at this point, whether we're interchangeable. 

Joe: What is a commodity, just for the sake of the audience? 

Tracy: Yeah. The, the big thing right now is the oil and gas industry, right?

A barrel of o-oil has shot up to, like, $106 a barrel. It doesn't matter where that barrel comes from, where it goes to, all the barrels are essentially the same. And the marketplace and the healthcare, which they're starting to see anesthesia, and I, I see Randy at the edge of his seat. He, he wants to argue with me on this.

But healthcare and hospitals in general, they're starting to see anesthesia as a commodity, that their parts are interchangeable- Hmm ... and [00:04:00] anesthesia groups are interchangeable. Insource, outsource is interchangeable, and they keep making these decisions. They keep changing from one vendor to another, et cetera, et cetera.

And the commodities are necessary. That's the other important aspect of a commodity. Anesthesia is necessary. Hospitals cannot run their operating rooms without anesthesia. So in a sense that hospitals are willing to subsidize, in other words, pay out of their own pockets to continue to get this commodity above and beyond what commercial insurance payers and government payers are willing to reimburse for the service- 

Joe: Mm-hmm

Tracy: it's helped to commoditize us further, and it's helped to incentivize these payers to say, "Why do we need to continue to reimburse anesthesia at high rates when hospitals are going to subsidize it and pay the difference?" So they keep devaluing our services, propping up their profit margins, and we're kinda stuck in the middle, and we're fighting back a little.

But, like, if you take a-- This is a giant elephant Anesthesia's a [00:05:00] gnat on the elephant's rear end, frankly 

Randy: I'm frankly very disappointed in Tracy's overall skepticism and attitude. I think he fails to appreciate how important it is for UnitedHealthcare to deliver, uh, revenue or margin or dividends to their stakeholders and their investors.

So I, I, I don't want any part of this conversation. 

Joe: Better be careful, man. There's, there's Mangiones out there. You know, they're all over Chicago. Be careful 

Randy: Obviously, um, Tracy and I are much more aligned on this than, uh, I, I'm probably s- I was signaling. I think if you, if you zoomed out a little bit even more, I think anesthesia is a big, fat, rich target for, uh, the UnitedHealthcares and the Aetnas and the Blue Cross Blue Shields of the world for a variety of different reasons One is they know that there is a financial backstop, which is the hospitals and health systems in the United States.

They know that, uh, at the end of the day, if they're driving down reimbursement, someone else is gonna have to pay for that. It's not going [00:06:00] to be- Yeah ... the anesthesia clinicians, and it's not going to be the anesthesia groups that employ anesthesia clinicians. It's all going to be passed through. And which is, you know, one of the more perplexing things of this conversation, it is and it isn't.

One is that, you know, the American Hospital Association has been largely kind of on the sidelines, but Tr- Tracy's point is well taken, which is, you know, healthcare in the United States is a $4-plus trillion business. Anesthesia is maybe a $30 billion piece of that, and it is- we are definitely a gnat, you know, in, in, in aggregate if you compare to the total spend in the United States on healthcare.

So all of this is very important to us. It's very important to our clients, very important to the groups that we are either employed by or are managing. But writ large across the ecosystem, most people don't care, and UnitedHealthcare knows that, right? And, and other commercials know that. They also know that, uh, this is where I get myself in trouble sometimes, that m- m- the unique [00:07:00] nature of advocacy in the anesthesia community with the AANA on one side of the aisle and the ASA on the other side of the, of the aisle with zero coordination, uh, is zero, you know...

Yeah, and this is a- these are issues that impact the entire anesthesia community, but the AANA and the ASA still is very much positioned as the Hatfields and McCoys here. And, and, and they're not sharing resources. They're, uh, not coordinating. They're not collaborating. 

Joe: If that's the case, we're, we're definitely the people played by Kevin Costner in that classic- -uh, AMC version of that.

I think you're- Yeah ... totally right there. But, well, I, I wanna go back to this commodity thing real quick because Tracy, to, to restate your position or characterize your position, anesthesia is a commodity. Why pay high prices for a commodity? Drive the price as low as possible, and Randy and you both effectively said hospitals fill the gap, right?

But Randy, you're kind of known for talking about how culture is a differ- [00:08:00] differentiator locally, nationally, so on and so forth. So, uh, if I fire North Star and I bring in NAPA, and this is a commodity and I'm a hospital executive effectively comparing the management costs and the subsidy costs, et cetera, how do you combat that?

Randy: It is by providing a superior product. Uh, that's, that, that's the- that's how you differentiate. So there is no- and this is like with COVID, workforce disruption, and with surprise billing and other reimbursement headmins- headwinds, anesthesia's moved from you compete on price, meaning your ability to get a higher price, to now that's been largely mitigated, to now you are competing essentially on your ability to recruit and retain CRNAs and, and anesthesiologists And if you're effective in doing that, then you're gonna differentiate yourself in a market.

Uh, and that's how you're successful. And there's other things around transparency and, and, and, and, you know, obviously providing a great service to the, to the patients and to the [00:09:00] surgeons, all of that's important. But differentiation today, uh, in our bus- business ecosystem is largely found in your ability to recruit and retain.

The best way to do that is to have great leaders and great culture. 

Tracy: 100% agree. And look, when, when I talk about anesthesia being commoditized, I'm thinking as an industry. But then, so that's a market, right? The, the entire industry is a market, and then we have micro markets inside the industry. So at the hospital level, at the city level, in regional, um, levels, the service can be...

You can differentiate even with, with inside of a commodity through quality, through service. You know, our, our organization's growing rapidly. I, I think we've, we've probably picked up 25 to 30 new facilities in the last 14 to 16 months, hired roughly- Yes ... 300 to 400 anesthesia cl- clinicians And we're not doing that because we're the lowest price part of the commodity chain, right?

We're [00:10:00] doing it through differentiators, through service, through culture. And what Randy mentioned, the most important part, being able to recruit and retain providers. You'd be amazed, like we, we go into hospitals, we start day one, they need 14 operating rooms covered. And when we start on day one with 14 anesthetizing locations covered, the surgeons, the hospital administrators, they are like on cloud nine- They're, they're shocked

because the previous group, the previous group was only sending six or seven a day, and surgeries were lasting all night, being pushed to the next day and the next day and the next day, and they were losing volume to different places. So, you know, while, while it is a commodity, that's the macro market, right?

That's how it's viewed. But on the micro level, the individual hospital, the individual regions, it, it's, it's, there's more differentiators at that point. 

Joe: Tracy, I didn't mention at the top of the call that you're the, uh, incoming president of the AANA, right? I think most listeners of the podcast know what that stands for, the American Association of Nurse Anesthesiology.

And [00:11:00] Randy, you, you've spoken about this before. A- ASA and ANA, AANA don't, you know, communicate a lot. I think that's a fair characterization, right? And even in the... Look, I, I, I learned about this bill. You guys see it on the screen there. I learned about this bill through Jenny Schmidt, who I, I'm not sure what her official role is.

I think it's like the Queen of Oklahoma or something like that. She's done a lot of great work there. She mentioned that they coordinated with, uh, with the Oklahoma Society of Anesthesiologists, but I notice conspicuously that, you know, there's nothing here about that level of coordination. Randy, do you wanna, do you wanna just finish your comment there, and then we'll, we'll go to Tracy for your reaction on this newsletter?

Randy: Well, I mean, this is the thing. So this is what happens, uh, and we, we see this in, in other advocacy-related areas when there isn't a You know, a, a one-size-fits-all approach to solving a really difficult problem, then the states will, will come at it, right? So- 

Joe: Mm-hmm ... 

Randy: we've seen this out in Ohio. We're now seeing this in other [00:12:00] states where the state associations, whether it's they're doing it in a coordinated way or they're just, you know, running at this, you know, independently, they are now run- they are now trying to address these reimbursement issues, these policy decisions.

My hypothesis here is like, this is what we're going to see. Like, we're going to see state by state some legislative action to try to, uh, reverse some of these policy decisions, which is going to be very expensive, obviously, and going to take a very, very long time and will not be completely successful.

Obviously, the, the AANA has wanted action from the federal government on this, which would obviate the need from having to do a 50-state strategy, which is essentially what is going to have to happen. And obviously, not all 50 states are going to have the political capital, the financial capital, or just the fire and ability to come after this stuff.

So you're going to start to see states where CRNAs are in a very good position from a reimbursement perspective, and you're gonna see states [00:13:00] where CRNAs are, are getting screwed. Uh, and, and you're gonna see, you know, 15, 20, 30% delta between what a CRNA is reimbursed with at QZ versus what an anesthesiologist is reimbursed.

So that is the unfortunate but undoubtedly the direction we're gonna be going here, unless there's some kind of Hail Mary intervention by the federal government, which- 

Joe: The federal government's known for its efficiency and effectiveness, so I'm sure- ... we're gonna, you know, we're gonna see that. Yeah, at some point, uh, the, you know, we've gotta start laying down arms, so to speak, with on these reimbursement issues.

Tracy, again, not asking you to speak on behalf of the AANA or anything, but you have a unique view, right? So can you speak to this from all, all your different hats? I think this is a question a lot of people are wondering. Why aren't we working together more, right? And maybe this is, maybe this is the opening back from Thought Bridge in the '80s or '90s.

Tracy: Yeah. Look, it's a great question, and, and just to reiterate, these are my viewpoints. These are not the viewpoints of the [00:14:00] association, of the, uh, American Association of An- Nurse Anesthesiology, not the viewpoints of the anesthesia management company that I work for. But I can tell you that the ASA and the AANA agree on about 85 to 90% of everything, right?

It's that 10 to 15% of things that makes That makes collaboration really, really difficult. And a lot of times when you start with those 10 or 15% of differences, and y- that's the table stakes that's laid on the ground and saying, "Hey, until we agree on these things, we can't do anything together." When that is what's led in conversations, the conversations immediately die.

And I can tell you historically, and Randy, Randy has a viewpoint into this that, that extends before my years of, of being involved in the association, that frequently a lot of those conversations start with that. In other words, "We know we're never gonna agree on these things, [00:15:00] however, until we do, we can't work together."

Right. Is, is that, Randy, is that your experience as the CEO of the AANA back, back before I became, uh- Yeah, yeah ... involved? 

Randy: Yeah, I, I think that's right. I think that's right. And, um, then it's, you know, not to get, get us too far into the wilderness, uh, on this topic, but I, I would say it's also a reflection of the governance and leadership of both organizations, right?

Mm-hmm. And so it's really hard if a lot of the people who make it to the board of directors at the ASA, and I would say to some degree at the AANA, are on the militant end of these 10% issues, uh, and are not really attached to the business side or the consequences of what happens when these reimbursement issues play out, then they're gonna be focusing on the 10% issues.

Joe: You don't wanna name names there, Randy? You don't wanna name any of the militant people? 

Randy: I'm not, it's, I'm not- I'm just kidding. No, no, let's- 

Joe: I'm just kidding. Just adding a little humor- Yeah ... to the conversation. 

Randy: Let's keep it theoretical. Yes. 

Joe: Keep it theoretical. Yeah. All right. 

Randy: In a very weird and nerdy way, this is a [00:16:00] governance issue.

Uh, not a federal governance issue, not a state governance issue, but a association governance, governance and leadership issue as well. 

Joe: What do you mean by that? 

Randy: Well, I mean, the, the, the ultimate positioning an organization takes is reflective of its board of directors, right? So the management team of any organization, so I say management team, think of the CEO and his or her team, they're not setting policy or strategy, the board is.

And the, you know, and if the board is 30%, 50%, 75% Focused on the 10% of issues versus the 90% of issues that really drive the day-to-day outcomes, then it's really hard for us and for them to put the baggage in the parking lot and say, "Let's go focus on- Something productive ... the issues that mean the most. Yeah.

Joe: Yeah. 

Randy: And it's a reflection of how people land on a board of directors, full stop. It's, you know, it's not a competency-based model. And so it's a [00:17:00] model where even today, I mean, people are actively campaigning on Facebook as we speak- Hey ... which is the worst possible way- 

Joe: Hey ... 

Randy: to identify and- What are you doing?

and, and promote leaders. So- 

Joe: You are- So, um- Okay, so 

Randy: for those who don't know- And the ASA model is not, is... And to be clear, the ASA model- It's not better ... is 

Joe: not much better. Yeah. So, 

Randy: yeah. 

Joe: So for those who don't know, like, it's funny 'cause we're recording this on May 22nd. It probably won't be released until June.

I'm currently in an election. Uh, look, Churchill said democracy is the worst form of government except for all the others. So you're, you're, you're right. I think, you know, competency-based, you know, when you go to a more corporate style of governance, you're hiring people for their skills, background, experience, competence, that works really well.

But, you know, fundamentally trade associations are a democratic, i.e. G popular mechanism, generally speaking. There's some ways to disconnect that and, and disconnect, you know, mob rule, right, from governance. It's just, it's difficult to do. I think we've m- made some progress. Tracy, brief [00:18:00] comment from you on this, then we'll, we'll move, move on to our next segment.

Tracy: No, look, I, I keep going back to the point where, um, both organizations are, are focused on patient safety, right? We want what's best for the communities and the patients that we serve. We also are focused on making sure that our members are getting, um, the recognition and the knowledge and being able to practice in the way that, that they're trained and educated to do so.

The, the difference lies in the communication and the understanding that both organizations and both professions, and I'll include the third profession, uh, anesthesiologist assistants, we're all not going anywhere, right? And when we recognize that the reimbursement issues, the patient safety issues, the things that, that we all agree on, when we can lock arms in those areas, our knack grows a little bit, right, on this elephant.

We become a little bit stronger. We're a little bit more cohesive. But when we [00:19:00] focus on our differences and when we focus on the areas where we disagree, right? 'Cause I don't think, um, you know, I'm gonna speak for me personally, right, and, and probably the everyone else on this call, none of us are anti-physician, right?

We're just pro-CRNA in the, in the advocacy of the things that we want to promote. So we don't wanna hurt physicians. We don't want to hurt AAs. They're humans, right? They're, they're just like us. They made a career choice, probably relatively unknowingly, that they're gonna be entering this highly politicized, um, career where there's this-- there's all these competing forces.

And where we can lock arms, we should, for the benefit of our members, for the benefit of the communities we serve. 

Joe: Well, it's well said, and we're all in organizations in our, our professional lives that have MDs and CRNAs. I, I say it this way: We like to think both and. All right, everybody, that's a good place to stop.

We're-- we have a brief, brief break. We'll be [00:20:00] back. Stick with us.

We're gonna move to some private equity. Private equity is all over the internet right now. Let's go over some headlines. This is from Wall Street Journal, "New state laws to bar private equity from medicine start to show their teeth." Uh, this is from May 15th, 2026. This is from last October. Cal- California's Newsom signs bill to curb private equity's role in healthcare.

Right up the street, Oregon bill to block private equity medical deals heads to the governor's desk. This is from May last year. This eventually gets signed, culminating in this case here, where Apollo MD, if anybody's watching, I can't say glaucoma, I can never say it properly, the eye doctor who's so popular on social media.

He's been all over this. I believe he lives in Oregon, and he's got a unique history. He, uh, did have some very interesting commentary on this and effectively what happened. Apollo MD, large, I presume, private equity group comes in. The local physicians sued them, in [00:21:00] part over the fact that they were out of compliance with this recently passed law.

And the conclusion of that lawsuit was a private settlement. However, Apollo MD has exited that deal. The local physicians have taken on. Two more brief slides before I get comments here, just so people know what this actually does, right? In California, it requires disclosure of material transactions, effectively, and I'm vastly simplising it-- simplifying it.

But if a giant group is coming in, there's some sort of transaction, some sort of merger, some sort of partnership. If it meets certain criteria, they need to tell the government about it, right? So they have insight on what's going on, but it doesn't prevent it outright. Oregon was a little bit different and more stringent.

I'm more familiar with this law in that it bars, uh, MSO or PE control of An anesthesia group, for instance. Notably, when I looked at the language of this bill, 'cause I'm a nerd on these things, CRNAs are not actually named in here, [00:22:00] but there's probably some impact. I know Sound recently started up there.

So, uh, with all that being said, gentlemen, private equity, the government, they're weighing in. Uh, let's start with you, Tracy. I know you have a lot of experience in this area. You've been in the business a long time. You've seen this trend come and go. Why don't we start with you? Thoughts and reactions. 

Tracy: So bashing on private equity is the, um, it's the topic du jour for the last year, and, uh, somewhat rightfully so, right?

There's been some bad actors that have done some things that have, that have harmed, um, healthcare, right? Quite frankly. The ironic part is, um, there's also publicly traded companies that have profit motives that are doing similar things and the same things. Uh, but the focus is on private equity. And we're a reactive society.

We don't, we don't pass laws to be proactive, to make sure that well intentions are out there and people are being cared for well. What we do is we, we see one or two bad actors, and we pass sweeping legislation to try and fix that and curb that. [00:23:00] Uh, No Surprise Act is a good example of that. Very, very well-intentioned legislation.

Some pretty harmful unintended consequences around how that reshaped the marketplace in some areas, in some ways as well. But, but what we do here, you know, by being reactive and, and passing these laws And focusing on a narrow set of players, we're often missing the bigger picture, right? And the bigger picture is how we're, how we're delivering healthcare in the United States.

The Oregon Act is really about, you know, the Corporate Practice of Medicine Act and these friendly PCs. Friendly PCs are something that anyone in the business in multiple states or in any of the states that have Corporate Practice of Medicine Acts is well aware of. It's a concept that probably ninety-nine percent of CRNAs and physician anesthesiologists are completely unaware even exist, right?

It's a little bit frustrating because private equity is getting a bad name right now, and private equity is not always associated with negative events, negative outcomes. If you recognize private equity for [00:24:00] what it is, it is an entity that has a profit motive, just like publicly traded companies and just like privately held companies, right?

People that go into business go into business to make a profit because they're accepting a certain amount of risk. Yeah. 

Joe: I'm probably closer to the, uh, the crowd on this, right? I'm pretty s- you know, I saw what happened with Red Lobster, right? And I'm a little bit, um, newer in my career. Notice how I didn't say younger.

Randy: Is this all about Red Lobster? Is this your, this is your backend- 

Joe: Look, Red Lobster, I said it's a perfect example of- 

Randy: It has nothing to do with Red Lobster being a terrible, terrible restaurant chain. It-- This is all about private equity. 

Joe: Maybe. Maybe a little. Um- Okay ... but I think, you know, when, when people talk about profit motive in healthcare, it's broadly misunderstood.

And what I always remind people is individuals, we all have profit motive. And we all know that because we hire individuals, and they say, "I wanna make as mu-much as I can and work as little as I can." And that's a very natural thing. It's okay, right? We-- That's, that's just [00:25:00] life. That's, that's profit motive, right?

I think what you're describing, Tracy, is where things get really out of balance. So I don't want people to hear that and think all profit is bad because anyone who says that tends to like to get paid Right? So the old saying is, you know, "The only problem with socialism is when you always run out of other people's money."

Right? So I'm, I'm revealing a, a very slight, very, very slight political bias there. I'm not a socialist. But, um, I just, I needed to weigh in there. So Tracy, I'm sorry. I wanted to make sure your, your thoughts were not mischaracterized there and just add that nuance. Please, please continue and we'll go to Randy.

Tracy: No, look, I, I think that was kind of the end, uh, of, of the frame of reference, right? Um, even non-profit organizations quite frequently become bad actors from a financial standpoint- 

Joe: Yeah ... 

Tracy: even though they're non-profit organizations. So- For sure ... the characterization of private equity is, um, based on some, a handful of bad actors that have done some really bad things, and they really need to be [00:26:00] punished.

Um, we just kind of, you know, we react. I, I'll give you a perfect example. And- Yeah ... and this is, this is gonna be, this, this is gonna be a peek behind the curtain inside the AANA, right? And, and, uh, probably something I shouldn't even say, but look, let's be controversial. When I came on the AANA board, we had a list of policies and procedures that thick of things that you cannot do.

And every one that you read through, you think like, "Oh, I remember when that individual did that." So a policy was created to, to correct one person's actions from years past, right? And there's like a binder that's that thick of all those things. Like, really, are we policing everything? And that's what we're doing in this reactive legislation- Yeah

as well too. It's like a couple of bad actors. I say target the bad actors. Make an example of them, correct, and the market kind of figures itself out. 

Randy: Was there a Randy chapter in the AANA, uh, policies? 

Joe: There could be a Randy chapter. There could be a Randy chapter. 

Tracy: [00:27:00] I didn't notice a Randy chapter. I did not notice one of those.

Randy: Moving away from maybe, um, Red Lobster biscuits and, uh, AANA related issues- Come on ... I think, uh, the- Red Lobster's 

Joe: a great example ... 

Randy: there's an inherent tension that's, that's happening within healthcare right now. One is that there's a recognition and a movement towards scale You know, so that's why you're seeing tons of consolidation.

You know, I'm not talking about anesthesia specifically, but, you know, across the healthcare ecosystem, tons of consolidation because it works. Scale works when done well. 

Joe: Tell us why scale works. 

Randy: There is a, an efficiency that comes together when you bring multiple organizations or multiple units within an organization in terms of you can do things more efficiently, you can do things more cost effectively.

Think of across the board HR integrations, revenue cycle. You-- We, instead of having independent departments or organizations or businesses, if you put them together, like one independent hospital [00:28:00] being acquired or integrated within a hospital system, there's a natural efficiency theoretically, doesn't always play out that way, that, that, that occurs, or at least that's, that's the strategic thesis for consolidation.

Joe: Price per unit goes down, right? If you're buying a bunch of T-shirts, you buy a thousand, you get them for fifty cents, you buy it for... You buy a hundred, you're paying, uh, three dollars a shirt. 

Randy: That's the tension, which is healthcare is-- big chunks of healthcare are pursuing consolidation, right? And if you look at whether it's the emergency medicine business, uh, whether it's in the anesthesia business, and the anesthesia business still is highly fragmented.

It, it, there is a directionally moving towards consolidation because there are efficiencies, uh, that are achieved with that. And if you look at what-- I, I mean, this whole, this Oregon thing with PeaceHealth was a- Mm-hmm ... absolute debacle. Uh, I mean, if you, if, if you did any reading about this, I encourage you, like open up a bottle of wine and read some of these articles.

It is a [00:29:00] playbook of what not to do if you're gonna bring in an outside group. I mean, they m- they made every mistake possible. 

Joe: You don't have to speak about Apollo and D if you, if you don't want to, but like give me a mistake that they made. 

Randy: I don't wanna speak too bad about PeaceHealth because w-we may at some point in time wanna have a, a, a- Sure

professional relationship with them. But if you-- And I would also say that the individual who was running that on the PeaceHealth side has been invited not to be in the organization anymore. So- 

Joe: Right afterwards, the CEO got fired. All, it was all in the news. 

Randy: Yeah. So like there was like the, the way that they structured, and this is a little inside baseball, but the way that they structured the entity was so Obviously a attempt to circumvent the law that, and they didn't put a lot of effort into it.

It was like the laziest- Mm ... but messiest approach possible. So, so there was like, this is an example of like terrible execution coupled with their, you know, the, the incumbent emergency medicine group, and I don't know. My hunch is they probably weren't doing an awesome [00:30:00] job, uh, you know, in term- at least from a relationship perspective, but cost coverage, whatever.

There was some reason why Peace, you know, there are reasons why PeaceHealth pursued this. 

Joe: Sure. 

Randy: And if you ask in a private room like, "What were you unhappy with?" You would probably get some pretty compelling concerns. So this is what we see on the anesthesia side. So I, I, I'm trying to play a little bit of the devil's advocate here, so.

Joe: I appreciate you saying that actually, 'cause if you listen to Eye Doctor comedian guy, I honestly cannot... I don't know his name. He's just really funny. But hi- his content, he, he would contend effectively that private equity is, you know, again, it's the boogeyman in the room. That's why we're talking about it, has come and displaced this team of local physicians that has served the community for 50 years s- right?

Randy: Yes. 

Joe: And- 

Randy: Yes ... 

Joe: if I can characterize your point of view, it's effectively if that group, if any group Was doing a great job, generally their job doesn't get shopped. You're not looking to replace them at a fundamental level. 

Tracy: Yeah. 

Randy: Yes. [00:31:00] 

Tracy: That's- Exactly ... that's 90% true. From an anesthesia management group, Randy and I, our groups don't get invited into hospitals to take over anesthesia departments that are functioning well.

Randy: Yes. Yeah. 

Tracy: By and large, they're usually dumpster fires where there's issues that are going on with staffing or there's service to communication, uh, leadership issues. We're never invited while like everything is going great- 

Randy: Yes ... 

Tracy: come on in, right? Or the costs are, are out of control, those types of things.

So, you know, while they paint themselves as, you know, serving the community and they're the, they're the saints in this story, right? Of course. Uh, and the big, bad corporation is the, is the bad. You know, hospital- hospitals don't change groups and make these major disruptive decisions when things are going well.

So there was issues there, I can guarantee you that. 

Randy: Totally agree. There's this inherent things that my, my bias is on these kinds of things is pro-competition. So I, I immediately get nervous when I see things that could potentially limit competition. So if we hearken back to the last [00:32:00] conversation we had, weirdly, we talked about the FTC's intervention in Texas with USAP, and directionally, I'm supportive of that because, you know, that situation, there was concern about lack of competition in key markets like Austin and Houston, Dallas.

Joe: That's why the FTC intervened? 

Randy: That intervention was predicated on we need to open that up and create competition. Now, we go to Oregon and California, I think these are well-intentioned. My concern is if you're gonna over-rotate into highly regulated intervention by a state government, what does that do to competition?

And how does that impact cost? How does it impact coverage? And how does that impact, uh, quality of care? And so I'm inherently skeptical of any government intervention that is going to decrease competition. Uh, and- 

Joe: You, you sure you're from Illinois? You sure? 

Randy: I, I mean, I, I definitely, I mean, I, I mean, if you, like my politics, [00:33:00] I'm, not that this is relevant, I'm more left-leaning, but there are things around, you know, I just don't like any environment that decreases competition.

Yeah. 

Joe: Of 

Randy: course. And 'cause I don't, I guess- Of course ... 'cause I, I think it, the, it means that the, the quality of the product is gonna go down, and the cost is gonna go up. 

Joe: There's been such excess, right, in the American economy generally. There's so much wealth concentration. And we're not talking about the 1% or the 0.1%, we're talking about the 0.1%.

Uh, and things have become out, out of balance, and I think this is a reaction to it. Some of this reaction is appropriate. These bills, we'll see. We'll see if, you know, things get better or things get less expensive in California and Oregon. Uh, I'm gonna flip to, we got two more segments. So this was a slide from last week.

Someday I'd like to have somebody from the ASA on this show. This is probably not gonna win me any favors there. But 95% failure rate over the last 30 years, and you can see a lot in recent years as, as they've gone up. They- they've gotten a few through in recent years. Just from the last week to [00:34:00] this week, Iowa and Minnesota were just defeated.

So for 2026, I have updated numbers. 10 bills were introduced. Six have failed so far. Four are still active. I can't say I feel, you know, any of these are likely to pass. We'll see. Randy, what, what are your thoughts here? 

Randy: We had a conversation in the past around, you know, on advocacy, whether it's at the state and national level.

It's so much easier to play defense than it is to play offense. And so you're seeing here just the inherent inertia, uh, that's associated with Trying to change the status quo, w- you know, like in some of these states, there's actually AAs all over Michigan. So this is around professional licensure recognition.

Joe: Yeah. 

Randy: Same thing in Texas. So, you know, just to be clear, like th- there's, there are, there are AAs in Michigan, and even though that, you know, the, the legislation may or may not be successful- Right, 

Joe: they're not, they're not recognized, but they're there. Yeah 

Randy: They're not recognized, but that doesn't have a real material impact on their, their, uh, utilization, uh, in, in Michigan or Texas, [00:35:00] right?

So as you think about this, this is just, you know, like 95% sounds terrible. It's not that bad. You know, if you, if you scale out, if you look across- It's pretty bad ... like a 10-year ti- It's pretty bad ... if you look at a 10-year time horizon, 10-year time horizon, the, it, what does this look from a trending? And also, like if you look at the number of AA programs coming online, the year-over-year graduates, and you look at that at a 10-year time horizon, just it is just inherently very difficult to go on offense, offense and be successful.

Joe: Uh, yeah, that's, that's fair, but the CRNA associations, and I've been part of some of this, but not part of a lot of it, uh, they've gone on offense quite a bit. I don't know the numbers. That'd be interesting for another episode. They're probably winning more than, you know, 5% of the time. I think it's, maybe it's closer to 10 or 20, but even so that's, you know, double.

With AA, as I always go back to, we're just asking the wrong question, right? L- like number one, this is like Come on, like this is a replacement play. Come up with a profession that can't-- doesn't overlap in services as much. [00:36:00] It just is what it is. It's okay, right? I think, uh, and I'm gonna keep this brief for time, in Arizona, I think the intent was exposed there.

Uh, I, I was only a, a small portion of this, even though I live in Arizona. You know, they put a, an amendment on the bill so CRNAs could supervise, and they were like, "That can never happen." And their response was, "Well, I thought you wanted to work in this state, and this would open up all these other markets to you where anesthesiologists don't exist."

And they're like, "Well, we'll, we can't, we can't sign on to that." So if it was really about work, I think they probably would've at least had a conversation. I think we're asking the wrong question. If we're expanding the pipeline, you know, there's, you know, seventy thousand CRNAs in the country, probably double down on that framework rather than trying to create something new.

I think there's a lot better wa-- If I was advising the American Society of Anesthesiologists, there's a lot better ways to secure your position, advocate for your members, which they should do, that's what we do too, than AA legislation. Tracy? 

Tracy: Agree a hundred percent. And I, I think we're, um- 

Joe: Wait, wait, wait.

Agree with me or Randy? Just we gotta figure out [00:37:00] if you're gonna come back, so, uh, agree with me or Randy. 

Tracy: Okay, uh, let me rephrase that. I disagree with both of you. No- Um, I, I think we're stemming the tide, right? And we spent enormous resources to kinda slow the growth of the AA movement that the physician anesthesiologist or they, that they've pushed, they've created, you know, as a replacement for CRNAs.

That's, you know, you said it, Joe. That, that's what I agree with. They-- That was the reason why AAs were created. If we look into the future, though, we're, we're not gonna-- we're gonna continue to stem the tide a little bit, but they're gonna continue to grow. Their rate of growth is actually faster than ours, and ours is faster than physician anesthesiologist.

So project that out into the future, and what are we gonna see? We're gonna see a lot more AAs. We're gonna see a lot more CRNAs. And from a ratio standpoint, we're gonna see a lot less physician anesthesiologists. I've written about this numerous times. Randy has talked about it. We're gonna see a sorting [00:38:00] in the industry where hospitals are gonna have to start making decisions, and some already are, but it's gonna become a lot more, uh, pressing for them to do so in the future, where what are their models gonna look like?

Are they gonna utilize AAs? Are they not? Um, many mixed models don't work very well. Um, when, when there's three providers in a hospital with three different titles, three different endpoints to getting to their terminal degrees I think the future's gonna look a little bit different where there's gonna be CRNA-centric facilities.

They may- they'll have physician anesthesiologist involvement, most likely, but the model's gonna be a little more CRNA-centric, right? Where CRNA's practicing to their full scope, physicians are there lending their expertise and their, their, their helpful knowledge and their hands and everything else. And then there's gonna be, there's gonna be the medical directive models, and those are mostly gonna be MDs and AAs, in my opinion.

And I think the market's gonna start sorting in that direction, [00:39:00] not out of, um, not because of my preference, but because of the workforce dynamics. There won't be enough anesthesiologists. There's no doubt about that. They're not gonna meet their demand with the way their supply is constrained and with the average age of an anesthesiologist being like fifty-four or fifty-five years of age currently.

So The market is going to start adapting. The number of CRNAs is skyrocketing, skyrocketing. Two thousand and twenty-five, we just got the numbers from the COA. First year ever, we graduated over three thousand CRNAs. Next year is gonna be more. The following year is gonna be more. You know, we, we may talk about the loan issues before we run out of time if I stop rambling on this topic.

But however, um, the market is gonna look different five years from now than it does today from a provider workforce standpoint, and in ten years it's gonna look drastically different as well, is my prediction. 

Joe: Randy, you wanna, you wanna close this one out? I mean, I know your, your position on AA policy is very pragmatic, and I, I don't wanna at all mischaracterize by disagreeing with you there.

But do you wanna close out [00:40:00] just on this workforce topic? 

Randy: There are real structural changes going on in the anesthesia workforce that actually pre-- started-- it predated COVID. COVID was an accelerant, and we're seeing them play out. Uh, you're seeing, you know, on the physician side, Tracy's one hundred percent correct.

The, the, the challenge with the physician residencies, and, and we do need to grow the number of graduates, uh, physician graduates from anesthesia residencies. But the h- the challenge is it's so damn hard from a structural perspective to do that. Where on the CRNA side, and I'd say arguably on the AA side, there's much more flexibility and, and, and, and there's much more capacity growth in the system.

So yes, I think with that, and, and I'm surprised that the physician part of the community is not expressing more concern about their pipeline. I look at the data just like everyone else, not everyone's, but the nerds who, who are interested in workforce-related stuff, and I don't [00:41:00] see how the pipeline on the physician side is going to, um, keep up with the workforce exits and the increase in demand for anesthesia services.

Whereas the CRNA side, you're seeing like material and impressive growth in those programs, and that's going to be, you know, just be- because we're-- this is a little bit of a numerator-denominator problem because we talk about AAs and we talk about CRNAs and we talk about anesthesiologists. To be clear, CRNAs are the, are the backbone of anesthesia care delivery in this country.

There's seventy thousand, and we're graduating three thousand two hundred and twenty-five. We're gonna graduate thirty-five or six hun- thirty-six hundred. The programs are gonna continue to expand. So you're going to see more and more CRNAs, I hate to use a business word, but market share, larger percentage of the overall market share.

And that is, you know, the way it's going to be. And, you know, AAs are gonna fill a role they have for, you know, since the 1960s or whenever they were created. But I don't see them as a real threat to [00:42:00] CRNA workforce expansion because the, the, the demand is so significant and the pipeline dynamics are so obvious to me that CRNAs are gonna continue to be highly demand.

And That's the pragmatic, I guess, approach I think about 

Joe: Yeah, for sure. It won't be the last time, uh, we talk about policy and how it trickles out. We're, we're gonna flip to our last segment here, and this is just, uh, ruminations. And he- here, folks, we're just talking about something we're thinking about a lot.

I'll go first 'cause mine will be brief. Uh, something I think about a lot right now is broad misunderstanding. I see things on social media. I, you know, once a day I check in, and the things I see on the internet are so grossly wrong. I saw somebody talking about how a recruiter makes $40,000 per head, you know, net income, right?

Not the fee, like the individual recruiter. And I'm like, "No, no, no." Anyone who knows anything. So that's what I've been thinking about a lot. Tracy, I'm gonna, I'm gonna flip to you [00:43:00] and, uh, I know we're time constrained, and then we'll come to Randy 

Tracy: Oh man, misinformation. That was a good one. I, I wish I had thought of that one.

But, um, no, for me, uh, hot topic right now is, um, you know, student loans for, for anesthesia, uh, for nurse anesthetists. Uh, I think it's top of mind just because, um, you know, yesterday, which was, um, on the 21st of May, a lawsuit got announced from AACN, AANP. It's being supported by, um, Democracy Forward to sue the Department of Education.

Uh, 25 state attorney generals have, uh, issued lawsuits against the Department of Education, really all around the misclassification of nursing as professionals. So for me, that's top of mind. The cures are there's a lot of them out there to how we fix this, right? Lawsuits, legal avenues are one, legislative avenues, um, understanding the, the, the loan markets and, and gaps in those [00:44:00] areas, understanding why CRNA residents are not getting paid, but physician residents are getting paid.

How do we close that gap? That's something that, you know, we always think GME has always existed since the beginning of time, right? Adam and Eve was here, and then physician residents automatically all of a sudden started getting paid for their services, but not CRNA nurse anesthesia residents. And I think when we think back to someone created that GME funding, why aren't we creating funding for our nurse anesthesia residents?

They're working full-time hours, right? They're, they're not able to hold down any other work or jobs. So anyway, there's a lot of cures out there for, for that, and that's just been top of mind for me in the past several days. 

Joe: Go ahead, Randy. Go, let's close this out. What are you thinking about this week?

Randy: Yeah, this is a kind of a weird one, but I- I've been thinking a lot about this concept of growth versus product. So let me beat up on some large anesthesia companies for, for a second. So, uh, it is-- There is a hyper-fixation of growth in, [00:45:00] I would say, most, if not all of the medium and large-size anesthesia companies in the United States- The whole economy, yeah

which is understandable. Uh, and, and it's like if you're not growing, you're dying. So I, I totally understand the importance of growth. But if you look at like why some of these, I would say many of these larger anesthesia companies have, have really struggled financially, uh, from a brand perspective, losing contracts, um, and it's, it's because they've been focused on growth, but not focused on the product.

And- Yeah ... in my mind, product is you got great culture, you got great client relationships, your revenue cycle's tight, you're operationally, uh, very good. And being hyper-fixated on growth but not understanding and hyper-fixated on the product that you're providing, I think is a failure of leadership. And if you look at these groups, I think their CEOs are, um, not focused to the degree they should be on, "Hey, are we doing a good job?"[00:46:00] 

With our clients and with our clinicians. And that's why I have very little to no sympathy for them when they, you know, in terms of their, their contract loss and their, their reputation hits that you see, and it's because it's their fault. You, you have to be focused on both growth and product. 

Tracy: I would sum that up, Randy, in one sustinc- succinct sentence.

They're taking a short-term view- 

Randy: Yes ... 

Tracy: instead of a long-term view. 'Cause the short term, like growth, it's good, it feels good, dopamine kick. Um, theoretically it increases their valuation, right? It makes them more valuable for someone to acquire them. But they're missing the long-term view of, of providing the good, the good product, the high level of services, maintaining those relationships.

That, to me, is more valuable or equally as valuable to, to growth, right? The long term versus the short term. That's the way I'd look at it. 

Joe: I love it. I wanna be respectful of everybody's time. What I love about these is I, these episodes is I feel like I actually get [00:47:00] to talk to you guys, and it's fun and engaging and w- it's just

Just thank you for, both for, both for being on. So those of you who are listening, thank you for listening to this episode. There's a lot of ways to reach us. You can follow our social media, uh, channels on Instagram and TikTok. I post there as well. We have a website, abouttherest.com. You can email us if you wanna use the technology born in the '80s.

You can email us, social@abouttherest.com. So, and thank you for those who are commenting. Uh, we're also on YouTube as well. All the full episodes go up to YouTube directly. I'm your host, Joe Rodriguez. Thank you for our guests today who showed up today, Tracy and Randy. Our executive producers are me, are Aron Korney, Rob Goldman, and Shahnti Brooke.

Our editor and engineer is Jason Portizo. The music that you hear at the start of the episode and at the end of the episode is Omer Ben-Zvi. To learn about our About The Rest program and disclaimer ethics policy, they make me read these, [00:48:00] folks, uh, submission and verification licensing terms and HIPAA release terms, you can go to abouttherest.com or to reach out to us at production@abouttherest.com with any questions, concerns, or fun medical puns.

Thanks for listening, everybody. Have a great week.

​