As pressures to control health care costs increase, competition among physicians, advanced practice nurses, and other allied health providers has also intensified. Anesthesia care is one of the most highly contested terrains, where the growth in anesthesiologist supply has far outstripped total demand. This article explains why the supply has grown so fast despite evidence that nurse anesthetists provide equally good care at a fraction of the cost. Emphasis is given to payment incentives in the private sector and Medicare. Laudable attempts by the government to make Medicare payments more efficient and equitable by lowering the economic return to physicians specializing in anesthesia have created a hostile work environment. Nurse anesthetists are being dismissed from hospitals in favor of anesthesiologists who do not appear “on the payroll” but cost society more, nonetheless. Claims of antitrust violations by nurse anesthetists against anesthesiologists have not found much support in the courts for several reasons outlined in this essay. HMO penetration and other market forces have begun signaling new domestic physician graduates to eschew anesthesia, but, again, Medicare payment incentives encourage teaching hospitals to recruit international medical graduates to maintain graduate medical education payments. After suggesting desirable but likely ineffective reforms involving licensure laws and hospital organizational restructuring, the article discusses several alternative payment methods that would encourage hospitals and medical staffs to adopt a more cost-effective anesthesia workforce mix. Lessons for other nonphysician personnel conclude the article.

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