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Bills for Atrium patients drop after anesthesiology vendor change, hospital CEO says

Atrium Health CEO talks about dispute with anesthesiologists

Gene Woods, Atrium Health CEO,tells his side of the ongoing dispute.
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Gene Woods, Atrium Health CEO,tells his side of the ongoing dispute.

Atrium Health’s switch to a new anesthesiology vendor last year is lowering patient bills, hospital system CEO Gene Woods said this week.

Out-of-pocket costs have fallen on average about 10 percent since the change, Woods said on Tuesday during a quarterly meeting of the Charlotte-based system’s board of commissioners. In addition, Atrium is on pace to save almost $20 million from the transition, money that can be reinvested back into the system, he said.

The disclosures follow the change in anesthesiology providers at most of Atrium’s Charlotte-area hospitals — a move that kicked off a nasty public relations campaign in the region.

In making the vendor switch, Atrium did not renew a deal with longtime provider Southeast Anesthesiology Consultants, an affiliate of Florida-based Mednax. Instead, Atrium replaced Charlotte-based Southeast in July with Scope Anesthesia of North Carolina.

Atrium said last year that it expected anesthesiology costs to be cheaper under Scope because, unlike Mednax, it is not a publicly traded company that faces shareholder pressure to increase profits.

Another reason for the vendor change, Woods said on Tuesday, was to help Atrium provide anesthesiology under a more team-based model involving anesthesiologists and certified registered nurse anesthetists.

“We really wanted to have our anesthesia department sort of modernize its approach to team-based care,” Woods said.

“We’re still kind of working through a transition,” he said. “These transitions take a couple of years to kind of fully bake, if you will. But very excited about how the team has come together.”

Last year, the vendor change sparked a rare public dispute between a hospital system and one of its vendors. The spat involving Atrium, Southeast and Mednax played out in large newspaper ads and even spilled over into dramatic radio commercials.

The switch also has led to lawsuits.

Those include a suit that Southeast Anesthesiology and affiliated companies filed last March after Atrium hired Scope in December 2017 to be its new vendor. Southeast and the companies sued Atrium and Scope founder Dr. Thomas Wherry.

The suit accuses Wherry, while acting as an Atrium consultant, of stealing Southeast’s trade secrets in order to launch his competing firm and win the Atrium contract. Atrium and Wherry have denied the allegations. The case continues to work its way through North Carolina Business Court.

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Deon Roberts has covered Charlotte’s financial services industry for The Charlotte Observer since 2013. His beat includes Bank of America and Wells Fargo. He attended Loyola University in New Orleans and is a native of Lafitte, La.
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