How much labor is in a labor epidural? Manpower cost and reimbursement for an Obstetric analgesia service in a teaching institution

Some anesthesiologists avoid provision of obstetric analgesia services (OAS) because of low reimbursement rates for the work involved. This study defines the manpower costs of operating an OAS in a tertiary referral center and examines reimbursement for this cost. The time spent providing OAS in a total of 55 parturients was studied prospectively using a modification of classic time and motion studies. Mean duration of OAS in our population was 412 +/- 313 min. Mean bedside anesthesia staff time was 90 +/- 40 min, and mean number of visits to each patient's bedside was 6.3 +/- 2.0 visits. Assuming staffing on demand for service (intermittent staffing), a minimum of 2.5 full-time equivalent (FTE) attending anesthesiologists was required to meet demand. With intermittent staffing, labor cost was $325 per patient. Actual practice at Duke University Medical Center is around-the-clock (dedicated) staffing, which requires 4.4 FTEs at a cost of $728 per patient. Neither average indemnity reimbursement ($299) nor Medicaid reimbursement ($204) covered the cost per OAS patient. Breaking even is possible under indemnity reimbursement because operating room reimbursement subsidizes OAS costs. Breaking even cannot occur with Medicaid reimbursement under any circumstances. Obstetric analgesia services requires a minimum of 2.5 FTE attending anesthesiologists at Duke University Medical Center. With the current payer mix, positive-margin operating room activities associated with the obstetric service are not sufficient to compensate for the losses incurred by an OAS. Around-the-clock dedicated obstetric staffing (4.4 FTEs) cannot operate profitably under any reasonable circumstances at our institution.