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This issue of Anaesthesia includes a Special Article by Stubbs et al. [1] that seeks to estimate hourly anaesthetic and surgical reimbursements made towards consultants’ private practice fees by UK private medical insurers (PMIs). In doing so, it makes comparison with the hourly rates that anaesthetists might expect for NHS work performed in contracted hours and NHS work conducted outside of contracted hours. The headline news from this study is that anaesthetists seem to be worth about £60 h−1 when working in contracted hours for the NHS, £130 h−1 when doing NHS work in non-contracted hours and £170 h−1 if they accept the benefit maxima of PMIs as their private fees. As you read this article, the questions that occurred to us may also occur to you:

  • 1
     How accurate an estimate of hourly private practice income have the authors achieved?
  • 2
     How does the private practice income of UK anaesthetists compare with that of their colleagues from other, similar countries?
  • 3
     How should consultants’ fees in the UK be set?

We will attempt to answer these three questions, or at least express what we hope are informed views on what may be the answers.

Stubbs et al. accept that the estimates of the durations of the surgical procedures that they selected for analysis were drawn from activity in a UK NHS hospital, and that the hourly rates they calculate for private practice depend upon the translatability of these data to operations performed in independent hospitals. Notwithstanding their referenced claim that durations of the procedures thus acquired were similar to those recorded from other NHS hospitals, Finland, the US and from New Zealand private practice [1], it is the unreferenceable but consistent experience of those who, like us, have worked in the US academic healthcare system and in both sides of the UK system, that operations are performed more swiftly by a consultant surgeon in the UK private sector than by a mix of consultant and trainee surgeons in the NHS or indeed by surgeons of any seniority in the US. However, it is not just the duration of the operations that is relevant to the hourly rate of pay. A distressingly large proportion of the duration of an NHS operating theatre session is spent in waiting for patients to arrive at the operating theatre, in waiting for patients to emerge anaesthetised from the anaesthetic room and into the theatre, and in other delays; the processes within an NHS hospital all too often mitigate against optimum use of operating theatre time. It is therefore common experience that the turnover of cases in private hospitals is markedly faster than in NHS hospitals. We therefore suspect that Stubbs et al.’s estimate of the hourly rate of pay for work in the private sector is an underestimate, but we suggest that it is not so significant an underestimate as to invalidate the conclusions they draw from their analysis.

How do we fare in comparison to our colleagues in other countries? Both the Australian and the US reimbursement systems border on the byzantine, so we have used our knowledge of them to draw reasonable approximations for hourly rates of pay under typical circumstances. Through Medicare, Australia’s state-funded insurer, anaesthetists are offered financial rebates for private sector services rendered according to a complex, ‘relative value’, unit-based Medicare Benefits Schedule [2]. For in-hospital procedures in the private sector, doctors receive 75% of the Government-determined schedule fee from Medicare, with another 25% at least being provided by the patient’s own separate PMI if they have one. Australian PMIs provide ‘no-gap’ or ‘known-gap’ schemes for patients who go to consultants who have entered agreements with the PMIs. These schemes offer rebates in excess of the Government’s Medicare Benefits Schedule fees when certain criteria are met, which normally include the doctors limiting their fees to the PMI’s own schedule and compliance with the PMI’s billing procedures. Doctors may charge more than the published fees and ask for shortfall payments from their patients; this is less common outside major cities, as suggested by recent analysis [3]. As a rough estimate, an Australian anaesthetist accepting the rebate entitlements prescribed by the Medicare Benefits Schedule would be paid at a notional rate of £95–£127 h−1 for a lower limb arthroplasty (without or with a regional anaesthetic technique respectively), a lower rate than the median of £146 h−1 for orthopaedic private practice quoted in Stubbs et al.’s paper. However, this is a state-supported rate, and Australian anaesthetists have railed for some time at the Government’s failure to increase reimbursement rates in a manner that they would deem appropriate. Anaesthetists reimbursed under a typical PMI-sponsored ‘no-gap’ scheme would earn a more generous £157–£206 h−1 for a similar procedure. A recent survey concluded that the average Australian anaesthetist earns the equivalent of £149 000 per year at a mean rate of about £82 h−1 [4]. These figures are drawn from a sample representing the whole gamut of anaesthesia practice: from those working entirely within the public sector to purely private practitioners, and all shades of practice in between.

In the US, the state-funded Medicare system provides health coverage for people over 65 years who have no personal health insurance. Medicare in the US also takes a unit-based, relative values approach to reimbursement. A total hip arthroplasty taking 75 min to perform and conducted under a general anaesthetic with a lumbar epidural will pay the anesthesiologist £149 h−1, which is very close to Stubbs et al.’s calculated rate [5]. However, changes to the US healthcare system will see the reimbursement for Medicare work decrease by some 15% in 2010. As with the Australian data, this is at the level of state-funded care; purely private practice fees would be much higher than this, and annual incomes of £300 000 are not uncommon for US anesthesiologists, although the US Bureau of Labor Statistics, basing its data on tax returns, cites the mean income of an anesthesiologist in 2008 as being the equivalent of £105,000 [6]. Interestingly, if you add the full-time NHS salary of a consultant on their sixth seniority increment [7] to the mean annual private practice earnings in the UK quoted by Stubbs et al. [8], the total comes to a remarkably similar value to this. It seems that in spite of the vagaries of foreign exchange, the complexities of reimbursement systems and differing balances between state and private commitments, anaesthetists may well be equally valued, or at least similarly paid overall, in the UK and US, with Australia valuing its anaesthetists perhaps a little more highly.

The answer to the third question of how consultants’ fees in private practice in the UK should be set is at the same time the easiest and the hardest to answer. It is easy to answer because in English law a consultant is free to set their fees at any level they choose. A patient should be told of this fee in advance of surgery and if the patient agrees to this fee, there will exist a binding legal contract between the doctor and the patient that makes the patient responsible for payment of the fee in full [9]. That much is easy. However, a potentially confounding factor enters this simple legal and professional relationship: the role of the PMI. Private medical insurance companies set benefit maxima for their customers and, under the terms of most of their policies, will not pay any shortfall between the maximum benefit and the fee charged by the consultant. Patients often expect their PMI policies to cover all their treatment costs, and direct payments from the PMIs to hospitals, surgeons and anaesthetists reinforce this expectation. Of the five PMIs whose benefit maxima were analysed in Stubbs et al.’s paper, two share 60% of the UK PMI market. One of these, the market leader with a 40% share, has not increased its benefit maxima significantly for 15 years. The PMIs are businesses that seek to minimise their operating costs, and consultants’ fees constitute a significant proportion of these operating costs. As long as a substantial number of consultants are prepared to charge at the level of PMIs’ benefit maxima, it is not at all in the interests of PMIs to increase these maxima. Stubbs et al. note the concordance of hourly rates offered by the PMIs to consultants in their benefit maxima and devote much of their effort to seeking to derive algorithms that PMIs might use to set their fees. There is perhaps a simpler explanation for how the PMIs set their fees: if the market leader has all but frozen its benefits for 15 years and the majority of consultants seem content to set their fees at the level of these benefits, there is little business sense in offering benefits that are significantly higher or lower. If maxima are set higher, their operating costs would be higher and it would prove harder to compete in the PMI market. If set lower, they risk being told by their customers that their benefit levels are lower than the market leader, and their competitiveness may suffer as a result. In suggesting this, we do not accuse the PMIs of collusion, but we can see cogent reasons for concordance.

In the UK, NHS salaries are fixed by the government on the advice of the Doctors’ and Dentists’ Review Body. Payment for NHS work conducted in non-contracted hours tends to be paid at higher hourly rates than work in contracted hours, and should be paid at equal hourly rates for anaesthetists and surgeons in keeping with the founding principles of the NHS. Sadly, some anaesthetists will accept payment at less than parity in this situation, thereby devaluing themselves and the specialty of anaesthesia. As David Bogod noted recently in a valedictory editorial written after serving 6 years as Editor-in-Chief of Anaesthesia: ‘We have to pay school fees so, when the opportunity arises to make a few pounds by reducing the NHS waiting list in the private hospital, we happily take the crumbs from the surgical table, rather than insist on parity of pay. We are, in short, our own worst enemies’ [10]. However, in private practice, we are genuinely at liberty to set our own fees. If we set these fees to match the benefits maxima of the PMIs, Stubbs et al. have shown us that we will be reimbursed at approximately £170 h−1. If we value ourselves more highly than this, we should charge higher fees; there is arguably no legal, ethical or moral bar to doing so. Indeed, there is evidence that many UK anaesthetists are already doing so [11]. Those anaesthetists who wish to do this would be wise to heed the advice of the Association of Anaesthetists of Great Britain & Ireland (AAGBI), which has published guidance on the conduct of private practice and the billing of private patients [9, 12], and has recently suggested that anaesthetists should consider having only direct professional and financial dealings with their patients [13], thereby excluding the PMIs from the doctor-patient relationship and perhaps freeing anaesthetists’ fees from the increasingly immovable anchor represented by the unchanging tables of benefit maxima.

The title of this Editorial poses the question: ‘what is an anaesthetist worth in 2010?’. The answer as we see it is as follows: the worth of anaesthetists when conducting wholly or primarily state-funded work is inevitably set by the Government, but when conducting purely private practice, their worth, and that of the surgeons with whom they work, may currently be overly influenced by PMI benefit maxima. Nevertheless, while fees for private practice may be tempered by what the market and their consciences will bear, in truth and in law individual anaesthetists may set their worth at whatever level they so choose. With increases in benefit maxima having lagged well behind increases in Average Earnings Index in the last decade and a half [11], it may well be that more and more surgeons and anaesthetists will choose to free themselves from the average hourly rates so ably calculated by Stubbs et al. However, the ultimate arbiter of the worth of the anaesthetist in the UK private sector will be set by the patients: if they agree to pay the fees proposed, then that is the real worth of the anaesthetist.

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