Dr. Michael R. Hicks: Sleep Walking or Wide Awake: Why It's Time to Do Things Differently

Dr. Michael R. Hicks, President of Anesthesia Services at HCA Healthcare, breaks down the growing challenges in anesthesia, from workforce shortages to rising financial pressures. He explains why “hope is not a strategy” and outlines the need for health systems to rethink how anesthesia resources are allocated. The conversation explores the shift toward non-operating room settings, the importance of system-wide coordination, and how culture, flexibility, and leadership play a critical role in building sustainable anesthesia models.

Learn more: https://www.medaxion.com/dr-michael-r-hicks-hca-healthcare-president-anesthesia-services

Jeff McLaren introduces the speakers and panelists whose discussions were recorded live at the 2026 Anesthesia Economics Summit.

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Transcript

Sleepwalking vs Awake

SPEAKER_00 0:06

We're here today with Mike Hicks, who's the president of Anesthesia Services for HCA. And I just heard you talk a minute ago. It was a fantastic discussion that ensued from that. And the title of the talk was Sleepwalking or Wide Awake. And what does that mean to you relative to anesthesia here?

SPEAKER_01 0:29

Yeah, I think that's a great title because there are multiple ways to try to address the issues that we face in anesthesia. And on one extreme is to just keep doing what we're doing, sort of walk around with our eyes closed, hope that we don't bump into things and wish

Facing Reality

SPEAKER_01 0:48

for the best.

SPEAKER_00 0:48

But somehow costs will drop.

SPEAKER_01 0:51

Yeah, and I believe the reality is going to be just like with sleepwalking, the odds of getting hurt are far higher than the odds of something productive coming out of that walk. On the other hand, eyes wide awake, if we're going to address the problems that are in front of us, first of all, we have to actually acknowledge we have problems. And number two, we have to think very critically about what those problems are and what the solutions are. And so that means owning the reality that we're in, eyes wide open, these are the problems. We have supply-demand mismatch, nothing we can do about that in the short or intermediate term. We have relentless payer pressures downward, nothing we can do about it. So we have to own the reality, got to have our eyes wide open.

SPEAKER_00 1:38

Because you know, and with so many of our clients, uh there seems to be a disconnect between the Anesthesia Service Line and C-suite that just knows that subsidy is skyrocketed. They don't like it, they want it to drop, but yet in many ways their organizations are organized to make that happen.

Subsidy Disconnect

SPEAKER_01 1:57

Well, I think that's where the battle is going to be won and lost for each facility, quite frankly. Hope is not a strategy. And so to attack this issue, once you recognize that you have a problem and what the nature of the problem is, the way to solve it is essentially the way I frame it up and as I did during the con uh during my presentation, you've got to get all of the constituents, all of the consumers of the anesthesia service in a room and have an open dialogue because the anesthesia clinicians at the at this point in time and for the foreseeable future have to be viewed as a scarce, expensive resource, and we have to allocate them using that kind of framework in mind. And so modern anesthesia practice is not just in an operating room, and it's not just in a hospital, it's in non-operating room anesthetizing locations, it's in ASCs, NORA locations, it's in offices, it's in dental offices. So the demands for anesthesia clinician uh labor are immense. And um and so one would hope we live in a world where we can increase the supply, but there's really not a lot of opportunity to increase supply the traditional way. Now there's some innovative things going on. I know in in my in my history, I have deployed emergency medicine docs to do sedation in GI labs. I uh

Expanding Care Settings

SPEAKER_01 3:22

Which makes sense. Well, when you think about the skill set, can they deliver a full board general anesthetic for a complex cardiac case? No. But just part of their routine uh day of work as an emergency medicine doc is people come in, need sedation, need airway support, need resuscitation skills potentially. These guys do that stuff day in and day out. That's right. Adding this on an elective basis to them makes a lot of sense. Now, having said that, that's playing at the margins. That is not going to address the the full bore anesthesia issue that we have in this country. What we need to do is um look at look at the anesthesia ecosystem as a whole. And that means not just optimizing the operating room in terms of block scheduling and uh when cases start and flip room utilization. Those are those are things that everyone knows about. We probably don't know but we we we talk a better game than we actually deliver, quite frankly, on on those kinds of things. Um but increasingly NOROCytes, non-operating room anesthetizing locations are important, and in many hospitals, and particularly the uh in in my current world, up to 50 percent or more of the anesthetics are delivered not in an operating room, but in a CAF lab or an EP lab.

SPEAKER_00 4:44

It's just exploding across the country.

SPEAKER_01 4:46

Yeah, and it is, and it's um it's an interesting phenomenon. It's actually a good thing that the cases are moving out of the operating room. What that is a testament to is um we have better procedural techniques, things that used to require, well, good examples is um heart valvular disease. That used to require major operations with critical care stays, extended hospitalizations. We can do a lot of that stuff now percutaneously with much shorter recovery times without the need of a fully fledged operating room for for that to be done in. So it's a good thing for patients, uh, and in some cases it's a lower cost environment. But as that stuff moves out, any other business would say, okay, I'm going to move this block of work from point A over to point B and shut down point A or repurpose point A. But we don't. We just add another site and and and that just creates increased demand for the anesthesia team, which

ASC Economics Shift

SPEAKER_01 5:50

you can throw in surgery centers.

SPEAKER_00 5:53

That's increasing the demand without an increase in the supply.

SPEAKER_01 5:57

Surgery centers are an interesting animal. My background is is heavily in the surgery center world. And um historically, surgery centers were where people like me, meaning aging clinicians, uh wanted to go. There's no nights, holidays, or weekends. And uh, and so yeah, I don't want to take call, don't want to work on the weekends and holidays. So I let me go go get a surgery center job. Well, the lifestyle is still still appealing, but the economics don't work anymore. And with um, and when you layer in that many hospit uh many hospitals in the United States are now paying significant subsidies to support their anesthesia teams, and many surgery centers are just now starting to face that reality, the whole dynamic is changing. In fact, um I I used to have a joke that anytime I saw two surgeons and a person in a suit talking, they were about to open a surgery center. And uh and nowadays uh with the economics, um there are surgery centers that are being forced to close. If the surgery center, many surgery centers.

SPEAKER_00 7:02

So the bar is just higher.

SPEAKER_01 7:04

Well, it's it puts them underwater, and many surgery centers have uh physician investment, the procedural physicians are part owners of the facility. And if if the surgery center is generating, I'll make a number up here, the surgery center is generating a million dollars of profit, but the anesthesia subsidy ask is now a million and a half dollars, the that facility is now losing $500,000 a year, much less appealing to the physician investors, the procedural physicians who are the co-owners of it. And in fact, one of the quickest ways to change the dynamic between uh what historically was a loyal uh procedural surgeon base for me as an anesthesia clinician is to say, Jeff, you're the surgeon, I'm the anesthesiologist, I now need you to help pay my salary by the form of a reduced distribution. Very quickly, they will still play golf with me, but they will very quickly entertain the idea of finding another anesthesia.

SPEAKER_00 8:09

But you might have to pay for the rent. Well, I may have to pay for the rent.

SPEAKER_01 8:12

Yeah, absolutely. Yeah.

SPEAKER_00 8:14

Um yeah, yeah, the ASC space is interesting. How does how does HCA view that? Is the HTA view the surgery center space specifically as that component of the business, as an area of growth specifically?

SPEAKER_01 8:28

Well, that's a great question, and and um that's that is actually best answered by other people from me, but but here's kind of a high-level view. Uh HCA, from my perspective, in the anesthesia service line, is committed to providing care for the communities in which we operate. And part of that care means we provide a an uh uh appropriate level of care in an ambulatory procedural environment. And so it's it is heavily in the mix in terms of how we construct our our our system and our markets.

SPEAKER_00 9:04

You know, given

System-Level Strategy

SPEAKER_00 9:05

your your background, I I was struck. When we started that action years ago, we were fortunate to have large market-dominant practices as clients. And the way they manage their practice and the way they achieved efficiency and scale was by sharing resources across many facilities in the market. And it seems that when hospitals have sort of gun the path of in-sourcing anesthesia, that they're treating each facility as a labor isolate instead of sharing resources in the market that the efficient practices learned how to do 20 years ago.

SPEAKER_01 9:43

That is an excellent point, and and I think it's one that we don't spend enough time talking about on the health system side of the world because um it all fits together. It's part of an ecosystem, and so if I focus just on this item and ignore all the other parts of the system, I'm going to get results that were predictable but unintended, that could actually cause more harm than good. And to and to the point you just raised, one of the secrets, and and and in my past, I was the part of a couple of large national anesthesia uh practice management companies. That was part of our part of our secret uh sauce, if you will. You know, we were able to obtain better payer rates, so that was important. Uh we were able to have more robust uh Rev Cycle uh shops, that was important. But a key label was really good at all that.

SPEAKER_00 10:40

Yeah, we were good. I like to think that we were very good at that. Yeah, you were, you were right.

SPEAKER_01 10:44

And and and those companies that I'm no longer part of but help lead are still very good at that. Uh they are industry leading, in my opinion. But what what we lose is um what we excelled at then, and what some of the larger practices still excel out at is this ability to shift labor dynamically to meet demand in real time. And

Resource Allocation

SPEAKER_01 11:08

so And scale matters. Scale does matter, but you have so you have to have scale. It's a it's a predicate for everything else, but then you have to have the right management construct in place so that you can deploy that scarce expensive resource in a way that makes sense. So you are missing, um, I would argue that an anesthesia practice and the health system, more importantly, are missing the mark if they if they choose to view each facility or each department as a freestanding entity.

SPEAKER_00 11:42

You have to staff independently with the inefficiencies of all that.

SPEAKER_01 11:46

You need to be able to dynamically manage the schedule and manage the people that fulfill those scheduling needs. And ideally, you're going to do it without ultimately impacting the ultimate customer, which is the procedural physician that is bringing us that volume. Because it would be a foolish mistake to save $500,000, for example, on an anesthesia subsidy and watch four million dollars of EBITDA or profit leave the building because you have alienated a surgeon or a surgery group. And so this requires, and this is where our our um, this is where the anesthesia folks absolutely need to be aligned with the health system because most anesthesia groups only look at the dynamic and the economics of the anesthesia practice. They don't have that holistic view of the enterprise. And the argument I make frequently is that the only way to solve this problem is you've got to have all of the consumers, all the constituents in a room on a regular basis, comparing notes, who's got high demand on Thursday, who has the ability to maybe shift some cases, who has a relationship with a surgeon where we can call in a favor and say, hey, can you move up 30 minutes? And it it requires a couple of things that are uh that are challenging. One of them is we're asking folks to have conversations they've never had before. They're not skilled at potentially because they've always we've always embraced this idea that every case is a good case, and whenever you want to do it is the right time by me. Well, there's some discussion about whether every case is a good case from an economic standpoint, but the the harsh reality economically is that you um, as I tell people, you can have as much anesthesia coverage as you want, but you're going to pay a lot for it. And and so um treating treating the anesthesia service as scarce and expensive, bringing that to the table with this idea that everyone in the facility is uh in this together, and we have to we have to deploy these people in a in an intelligent way, I think that is the key success tactic.

SPEAKER_00 13:58

And so what I'm hearing is you're saying that cohesion is a real strategic asset for the facility to the degree to which you can get the people working together in the room, and especially if you can then elevate that at the system level, where that cohesion spreads across multiple facilities where you can actually share resources in a health system and then act like some of the large market-dominant practices of many years ago. Um the volume is shifted to the health system.

SPEAKER_01 14:29

Yeah, and and I mean I think that is that is key. But like like everything, there are constraints, and one of the constraints with that model is that the clinical workforce in has has a multitude of of choices now, where they choose to practice, how they choose

Culture and Flexibility

SPEAKER_01 14:46

to practice. And and and the the current labor force in anesthesia has yes, compensation's important, but on top of compensation, compensation' needed, but not um not going to get you all the way there. Conversations around flexible scheduling, meeting their needs uh are are almost as important, maybe just as important you spoke in in the talk about the importance of culture, is what you're saying. Culture drives everything. And to your point about flexibility, the you know, the ability to scale appropriately, um there are just a large number of clinicians that don't want to sign up for that. They don't want to be in their car a good chunk of each week driving from you know this facility to that facility, or Tuesday I'm in the hospital, and Thursday I'm in another hospital. So it's it requires um it requires some balance. It's gonna require significant leadership. Uh, and and all of this ties back to the earlier comment. You have to recognize you have a problem, you have to understand what the problem is, and then you have to have your eyes wide open as you come up with solutions that are going to work.

SPEAKER_00 15:57

Awesome. Mike, thank you so much for sharing some time with us today.

SPEAKER_01 16:01

Thank you for having me.