Anesthetist shortage and pay cuts strain hospital budgets

Modern Healthcare – Tuesday, October 14, 2025
By Alex Kacik

Health systems are grappling with a shortage of anesthetists and reimbursement cuts, a combination of factors that could limit patient’s access to care and provider’s expansion plans.

They hope to stave off service reductions by training more CRNAs and simplifying clinician operations, but those strategies may not overcome mounting financial pressures, hospital executives and staffing experts said. Rural areas could be particularly hard hit.

“There is serious financial strain on the cost to keep surgery departments going right now,” said Alex Herbison, vice president of physician solutions at staffing firm AMN. “It doesn’t feel sustainable.”

Hospitals that predominantly treat Medicare and Medicaid patients have had difficult conversations about which services they can afford to keep. Procedures requiring anesthesia are typically the last type of service hospital operators want to cut because knee replacements, plastic surgery and other procedures frequently provided in ambulatory surgery centers are top revenue generators.

UnitedHealthcare’s 15% reimbursement decrease that took effect Oct. 1 for independent CRNAs isn’t enough on its own to rethink service offerings at McKenzie Health System, said Steve Barnett, president and CEO of the rural hospital in Sandusky, Michigan. But in combination with rising operating costs, more frequent claim denials and declining Medicare and Medicaid reimbursement, commercial insurance pay cuts may force rural hospitals to cut services or close, he said.

“When you add all these things together, it reduces our ability to create a margin and at some point we would have to consider a service going away,” Barnett said. “These problems contribute to hospital closures, particularly in rural America. Which straw breaks the camel’s back?”

Michigan is one of 44 states that allow CRNAs to work independently, evaluating patients, administering anesthesia, monitoring vital signs and helping patients recover after procedures, among other responsibilities. At McKenzie, when one of its two CRNAs is out, the system must use temporary workers who can charge $250 an hour, Barnett said.

Many large systems have the patient volume and financial latitude to absorb higher labor expenses and declining reimbursement. Providers in rural areas may not have those options.

Safety-net and rural hospitals typically eke out a small profit or lose money on cataract surgeries, epidurals and colonoscopies, said Dr. David Lubarsky, an anesthesiologist and president and CEO of Valhalla, New York-based Westchester Medical Center Health Network, which covers some rural communities.

“Those services are hard to afford when costs increase. Hospitals that don’t have strong margins might be worse off as they face increasing supply and cost pressures to deliver anesthesia services, in addition to large Medicaid cuts,” he said, referencing the supplemental Medicaid payment reductions under the new tax law.

Labor expenses will likely continue to increase. About half of anesthesiologists are age 55 or older, and there aren’t enough medical school graduates to backfill the aging workforce. That dynamic has fueled rising anesthetist salaries.

The average starting salary of anesthesiologists has jumped 32% over the past four years to $485,000, while starting salaries for CRNAs rose 26% to $279,000 during that time frame, according to the latest AMN data. Average anesthesiologist signing bonuses are nearly $60,000, outpacing the average of $38,215 across all specialties.

Rural hospitals may choose to contract with an anesthesiology group instead of employing anesthetists directly. However, they often do not have the patient volume or cash flow to maintain those contracts, said Ron Howrigon, president and CEO of physician practice consulting firm Fulcrum Strategies.

Reimbursement cuts heighten operating hurdles.

UnitedHealthcare’s recent rate decrease for independent CRNAs follows Elevance Health, Cigna and other insurers that have made similar adjustments over the past two years. Meanwhile, the Medicare reimbursement rate for anesthesia services has dropped 6.5% from 2021 to 2025.

Health systems can avoid these cuts if a physician supervises CRNAs, but many rural hospitals don’t have that option.

“Rural hospitals, especially those that provide obstetric care and general surgery, depend on CRNAs almost exclusively,” said Brock Slabach, chief operations officer for the National Rural Health Association.

A UnitedHealthcare spokesperson said in a statement the pay reduction better aligns with CRNAs’ training and expertise and follows other insurers’ reimbursement adjustments.

“These changes help ensure claims are paid accurately and fairly, helping to control rising healthcare costs,” the spokesperson said.

An Elevance spokesperson said its rates are aligned with industry standards and are regularly reviewed to ensure fair, market-based compensation.

Cigna did not return requests for comment.

The American Association of Nurse Anesthesiology said there is no difference in quality of care or outcomes provided by a CRNA or anesthesiologist.

“The vast majority of hospitals lose money on their anesthesia departments, and these UnitedHealthcare cuts will only exacerbate those losses,” said Tracy Young, president-elect of the association.

Health systems look to mitigate that financial pressure by increasing anesthetist education and training programs and streamlining operating room workflow.

Westchester Medical Center is working with New York Medical College to increase its residency program for anesthesiologists and potentially start a CRNA program at the college’s nursing school, Lubarsky said.

Allegheny Health Network, the hospital system linked to Pittsburgh-based Highmark Health, plans to limit downtime in surgery suites through block scheduling and other technology-backed improvements, said Scott Bowers, vice president of the Anesthesiology Institute at Allegheny Health Network.

“We are always going to face the risk of both government and commercial payers looking to get additional cuts out of anesthesia,” he said. “We need to always work at being more efficient.”

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