Minnesota’s Economic News – W/E 4/16/21
State and local taxes and spending Pine Journal: Minnesota budget battles ignite; court decision kicks lawmakers into action on rape law re-write Star Tribune: Minnesota Legislature’s budget plans differ on…
When the AB5, a bill that extends employee status to gig workers, was made into law people celebrated. The law was going to protect gig workers as well as underpaid or mistreated independent contractors. But after the law went into effect on January 1st, 2020, it ended up bruising people it was meant to protect. Independent contractors saw a decline in their business as well as revenue, with some companies having to drop some of their contracting staff. The law further imposed on the flexibility as well as the livelihood of some independent owner-operators like truck drivers.
The law has recently added to its list of casualties, a shortage of anesthesiologists. This is making surgery more dangerous for the people in the state. The state of California has 8,500 anesthesiologists, 2,200 of whom are Certified Registered Nurse Anesthesiologists (CRNAs). Under the AB5 rule, CRNAs are treated differently from MD anesthesiologists.
CRNAs are licensed to dispense anesthesia much like an MD anesthesiologist. However, despite providing the same services, CRNAs are treated fundamentally differently by California’s new law, AB5, which forbids CRNAs to work as independent contractors. Rather, they must work as regular, W-2 employees. In contrast, physicians such as MD anesthesiologists are exempt from AB5 and are free to work as independent contractors. This difference in how physicians and CRNAs are treated by the law is leading to enormous problems, creating an even more severe shortage and damaging the level of care provided by anesthesiologists.
CRNAs moreover face a restriction in their work hours due to their W-2 category
One important reason is the hours restrictions that W-2 workers and their employers must obey. A W-2 CRNA typically works an eight-hour shift, because overtime pay requires a 50 percent wage premium beyond eight hours. Since many rural hospitals are struggling financially, it is rare that a CRNA will be asked to work beyond their regular shift, because the hospital is unable to absorb that additional cost.
This restriction has resulted in fewer CRNAs coming to California to work as they stand to earn much less since they can only work for fewer hours. This restriction also disrupts care continuity, as someone may end up being treated by a different anesthesiologist than the one they started with. This might pose a significant risk to a patient if subsequent anesthesiologists are not as familiar with the patient’s medical details.
California, generally already faces a shortage of anesthesiologists, a problem which is acute in rural areas as most anesthesiologists choose to live in major urban areas. There is no doubt this law, although probably well-intended, will continue to make this problem worse for these people who already suffer from a shortage of medical care, while at the same time infringing on people’s right to earn a living.