Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Colleen Chawla, Chief, San Mateo County Health
Chester J. Kunnappilly, MD, Chief Executive Officer, San Mateo Medical Center
Subject: Professional Services Agreement Between the County of San Mateo and Bay Area Peninsula Anesthesia Associates, Inc. for Anesthesiology Services
RECOMMENDATION:
title
Adopt a resolution authorizing an agreement with Bay Area Peninsula Anesthesia Associates, Inc. for anesthesia services, for the term of March 1, 2026 through February 28, 2029, in an amount not to exceed $7,606,528.
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BACKGROUND:
Bay Area Peninsula Anesthesia Associates, Inc. (BAPAA) began providing anesthesia coverage to San Mateo Medical Center (SMMC) for operative and outpatient procedures and on-call coverage on March 1, 2023. BAPAA was incorporated by Dr. Currie Lee, an experienced anesthesiologist who historically provided anesthesiology services under contract individually and under his prior affiliation with Medical Anesthesia Consultants Medical Group, Inc. Under Dr. Lee’s leadership, BAPAA has grown from a team of three anesthesiologists to 12 anesthesiologists who work together to serve the County and also selectively serve select outside providers. BAPAA staffs three operating rooms during business hours Monday through Friday, covers SMMC’s endoscopy clinic on Fridays during business hours, provides on-call coverage around the clock for medical emergencies, and provides Medical Director services with Dr. Lee as the designated director. The County pays BAPAA using a compensation formula based upon the number of full-time physician equivalents to maintain the foregoing coverage, which is presently 3.89 physicians. Professional anesthesia services are legally required as a “basic service” to operate SMMC as a general acute care hospital and to perform surgical services by California law and related hospital licensing regulations. See Cal. Health & Safety Code §§ 1250(a), 1250.1(a), Cal. Code Regs. §§ 70005 (definition of “general acute care hospital” includes anesthesia service as a “basic service”); see also §§ 70233 (anesthesia general requirements), 70235 (anesthesia service staff requirements), 70223 (surgical service general requirements).
DISCUSSION:
The agreement presented for approval here incorporates the same scope of coverage and Medical Director services as BAPAA’s prior agreement.
The rates in the new contract are within fair market value according to VMG Health, a nationally recognized medical services valuation firm that relies upon multiple industry-standard provider compensation surveys and aggregates that data.
The County Attorney has reviewed and approved the resolution and agreement as to form.
The resolution contains the County’s standard provisions allowing amendment of the County fiscal obligations by a maximum of $25,000 (in aggregate).
It is anticipated that there will be 0% cancellations by anesthesiologists for pre-existing conditions within one month of the Operating Room date (for surgeries scheduled less than 30 days out, within 24 hours of receiving the chart).
PERFORMANCE MEASURE:
|
Measure |
FY 2025-26 Estimated |
FY 2026-27 Projected |
|
Percentage of cancellations by anesthesiologists for pre-existing conditions within one month of the Operating Room date (for surgeries scheduled less than 30 days out, within 24 hours of receiving the chart) |
0% |
0% |
COMMUNITY IMPACT:
BAPAA’s continued anesthesia coverage at SMMC will positively impact health outcomes because delivery of those services assures SMMC’s continuing operation to meet addresses community need for hospital and surgical services. SMMC’s patients span a wide spectrum of races, ethnicities, gender, and gender-identities. Within the past 18 months the largest cohorts of specialty care patients at SMMC were female (52%), Hispanic or Latino (63%), and primarily Spanish speaking (55%). SMMC strives to eliminate bias in the medical profession by providing training to its physicians and by following up with patients to ensure that they continue to have access to specialized care. SMMC specifically tracks physician satisfaction survey results and requires BAPAA and Dr. Lee to meet with SMMC and discuss patient feedback to improve patient satisfaction and remove potential barriers to care.
FISCAL IMPACT:
The term of the agreement is March 1, 2026 through February 28, 2029. The amount of the agreement is not to exceed $7,606,528 for the three-year term. Funds in the amount of $2,535,509 are included in the SMMC FY 2025-26 Adopted Budget and similar arrangements will be made for future years.
The payment provisions in the proposed agreement are projected to increase the total cost over the three-year term by 13% compared to BAPAA’s prior contract. However, please note that endoscopy coverage was added relatively late to the prior contract, distorting the picture of the increased cost of anesthesia coverage originally required to operate SMMC. Controlling for the late addition of endoscopy coverage in the prior contract, the current proposed contract contemplates a 9.6% increase in cost over the three-year term to staff the hospital’s operating rooms, provide on-call services, and provide medical director services.
Expenses at SMMC are covered by fees for services or third-party payors whenever possible. The portion of expenses for services provided to the medically indigent or to those covered by programs that do not meet the full costs of care is covered by the County’s General Fund contribution to SMMC and is within the existing annual appropriation.