Abbott Northwestern switching anesthesia service

Abbott Northwestern Hospital in Minneapolis said it will switch anesthesia providers next year, replacing doctors and nurse anesthetists from a Florida-based company called Mednax with a group called Minneapolis Anesthesia Partners.

The new group will start working at the hospital in June 2020, Abbott Northwestern officials said this week in a statement to the Star Tribune. Until then, Mednax will continue to provide the anesthesia service, which Abbott Northwestern said includes 37 doctors and 68 nurse anesthetists.

Mednax is a publicly traded company that acquired the anesthesia practice three years ago.

"Mednax does not expect the termination of these services at the end of this term to have a material impact on its broader financial results," the company said in a statement to the Star Tribune.

Abbott Northwestern Hospital was the third-largest hospital in the state during 2016 in terms of hospital beds, according to state data. It's the largest hospital within the Minneapolis-based Allina Health System, which is one of Minnesota's largest networks of hospitals and clinics.

For 2018, Mednax reported total net income of $268.6 million on $3.6 billion of revenue from a business that features a network of more than 4,200 doctors in all 50 states and Puerto Rico.

Earlier this year, Abbott Northwestern issued a request for proposals from anesthesia providers after concerns surfaced about "insufficient access to anesthesia resources in multiple areas of the hospital," according to an internal communication reviewed by the Star Tribune. As a result, some operating-room cases were moved off the Abbott Northwestern campus, hospital officials said, or were delayed.

Mednax said in its statement to the Star Tribune that during contract talks with Abbott Northwestern, the medical group requested "increased financial support, or improved operational efficiencies, at Allina Health facilities, to ensure the financial viability of the practice." Mednax said the practice had been "significantly challenged" by requests for coverage levels that were in excess of patient volumes.

"The combination of increased staffing without sufficient volumes and a lower level of financial support from Allina Health would compromise our ability to maintain a viable practice with high-quality providers," Mednax said in its statement.

Minneapolis Anesthesia Partners is a new partnership of medical groups that now work at Allina's United Hospital in St. Paul and Mercy Hospital in Coon Rapids, according to a memo distributed by Abbott Northwestern this week.

"In June of 2020, the new group will take over the provision of anesthesia services at Abbott Northwestern," the hospital said in a statement to the Star Tribune. "This gives the new group a year to ensure they have adequate staff."

Mednax did not release financial terms in 2016 when it acquired Northwest Anesthesia, P.A., the longtime anesthesia group at Abbott Northwestern. The sale was part of a consolidation trend among hospital-based physician practices, where acquiring firms offered physicians the chance to hand off business chores such as collecting patient bills and negotiating payment rates with health insurers.