Lord or vassal? Academic anesthesiology finances in 2000

This article examines recent trends in the management of academic physician practice groups, and in particular the allocation of revenues and expenses to anesthesiology departments. The history of academic group practice is traced, beginning with the "corporate model," in which each department functioned in financial independence from the others. This evolved gradually into the "feudal system," in which departments were ostensibly independent, but paid variable and often large "assessments" to the central group. The final stage in this evolution is the "big bag," in which all clinical revenue is pooled by the central practice group, and then distributed by the group to departments or individuals according to some compensation plan formula. The advantages and disadvantages of each of these systems are discussed as they apply to anesthesiology departments. A productivity-based compensation plan formula under the big bag system is calculated for a typical anesthesiology department. This calculation shows that if the compensation formula is truly based on measured clinical productivity, anesthesiology departments may actually fare better under the big bag than under the feudal system. Finally, options for survival in the academic practice groups of the future are discussed.

The history, current status, and trends of finances in academic anesthesiology departments are reviewed. Knowledge of these issues will help departments develop funds allocation methods to ensure that they receive an appropriate share of their faculty practice group's clinical income.