10 Biggest Concerns for Orthopedic Surgeons in 2012Written by Laura Miller | January 17, 2012
Four orthopedic surgeons discuss the biggest challenges and opportunities for orthopedic surgeons heading into 2012.
1. Balancing declining reimbursements with raising practice costs. In 2011, orthopedic surgeons saw the cost of running their practice significantly increased while reimbursement steadily declined — and 2012 promises more of the same. Meaningful use requires groups to implement expensive electronic medical records, absorb more overhead costs and spend more time filling out forms than seeing patients. At the same time, Medicare and private payors have such low rates that seeing some patients becomes unprofitable.
"There is a constant downward pressure on what we are paid to deliver care," says Frank Kolisek, MD, orthopedic surgeon and president of OrthoIndy, an Indianapolis-based orthopedic practice. "Something has got to give because it's becoming more and more difficult for us to keep our practices afloat."
In addition to his clinical work, Dr. Kolisek and his group's leadership are politically active and often meet with Congressmen and advocates for medical professionals in Washington, DC, and in the state of Indiana. One of the anecdotes he uses to illustrate the financial hardship of physicians today harkens back to his first practice, opened in 1992. At that time, his Medicare reimbursement for a hip and knee replacement procedure was 55 percent more than it was in 2011. That is a 45 percent decrease in the surgeon fee over the past 19 years. Over the same time period, overhead costs have increased about 65 percent. Therefore, it costs much more now to run a medical practice than it did 20 years ago and we get paid less for the medical care we provide. This is what is driving physicians to retire and/or seek employment by a hospital system.
"I have performed a total hip replacement for a [patient on Medicare] and received Medicare reimbursement rates," says Dr. Kolisek. "[The same patient] took her Labrador retriever to the veterinarian for a hip replacement and had to pay cash upfront for the procedure and it was more than twice what Medicare paid me. The vet made 56 percent more to replace the dog's hip than I did to replace the owner's hip. I do not mean to be critical towards the vet, but rather to point out that physicians can't withstand anymore cuts in Medicare reimbursement for medical care we deliver to patients."
This new focus on keeping costs down and maximizing profitability in healthcare could have an impact on patient care as well. "It's well known that one of the challenges all medical practitioners take is balancing the needs of the patients with the measures to try to keep medical costs down," says Bradford Parsons, MD, an assistant professor of orthopedics at Mount Sinai Medical Center in New York City. "We try to make sure there is appropriate utilization of resources, so patients have the appropriate tests and are indicated for the right procedure. The challenge comes when physicians feel a patient would benefit from a test or intervention, but the insurance company won't approve it."
2. Restricted access for Medicare patients. Over the next four years, the United States is projected to add millions of people to the Medicare-eligible pool, which is a population that often seeks orthopedic care. However, the reimbursement for treating Medicare patients often doesn't cover the cost of care. Orthopedic surgeons are now being faced with a decision about whether to restrict access to these patients or absorb a loss on services provided.
"If you look at surveys from medical societies, physicians are already restricting access to Medicare patients because they lose less money by leaving the slot empty than taking the Medicare patient," says Dr. Kolisek. "The Medicare reimbursement rates are dropping even lower and now we are going to have millions of more patients on Medicare. Therefore, access to care may be an issue for Medicare patients in the future."
Figuring out how to provide reimbursement for these procedures to keep physician practices running without bankrupting the healthcare system is going to be crucial over the next few years.
"There is a tremendous disparity between the work endeavor to perform orthopedic surgery and the reimbursement given to the surgeon and hospital," says Henry Finn, MD, FACS, medical director of the Chicago Center for Orthopedics at Weiss Memorial Hospital and professor of surgery at the University of Chicago. "If you look at it only through a financial lens, surgeons are incentivized not to be involved in providing this type of care; yet it is a growing need in our country."
Compared with other countries, the American population right now has a more access to healthcare because the government supports people who are unable to obtain other forms of insurance. However, with the amount of dollars available to spend on healthcare decreasing, our government faces many challenges to continue providing care for the uninsured.
"There is a finite amount of resources and medical care dollars," says Dr. Parsons. "How do we provide appropriate care for everyone while also maintaining quality? That will require some careful thought and consideration to figure out."
3. What the poor economy of 2011 means for joint replacement in 2012. When people feel financially insecure, they are less likely to undergo costly and time-consuming endeavors like elective joint replacement. Some sources suggest that in 2011, 75 percent of Americans felt financially insecure, and these people are less likely to invest in a new joint while missing work to do so — even if they would benefit from the procedure. Instead, more people are using alternative methods for pain relief and waiting on surgery until they are out of other options.
"I would estimate that joint replacement across the board in the United States is down about 25-30 percent," says Dr. Finn. "Instead of undergoing elective procedures, people are managing pain in several ways, including the use of narcotics. We are seeing many more patients who are addicted to narcotics prescribed for arthritis pain. Generally, we don't think of chronic pain, such as pain from osteoarthritis, as an indication for narcotic use."
While the decision to prolong surgery could mean your joint degenerates to a much more difficult state, chronic narcotic use presents its own set of challenges. Narcotics abusers become tolerant and it takes a much higher dose of anesthetic and postoperative pain medication to make them comfortable.
"Studies have shown that the expected outcome is not as good for narcotics users," says Dr. Finn. "They show as many as 20 percent of these patients needed further surgery because they couldn't complete rehabilitation from their first procedure appropriately — they were in too much pain. When patients are on narcotics for back or knee pain, we ask them to stay off the medication for six months so we control their postoperative pain."
As a result of fewer people undergoing joint replacements in 2011 and more people managing pain with narcotics, orthopedic surgeons may see a higher volume of patients with severely degenerated joints in the OR in 2012 and beyond.
4. Will 2012 bring a technology boom or bust? With financial pressures on the forefront of everyone's mind, orthopedic surgeons are careful to recommend and perform the most cost-effective treatments possible for their patients. At the same time, researchers and innovators are developing new technology that has the potential to improve outcomes and improve efficiency in the operating room such as computer assisted and robotic assisted surgery. However, this costs money and somebody has to pay for it or technological growth could slow down. Many insurance companies do not want to pay for advanced technology and often call it "experimental." Therefore, a hospital buys technology and can't get reimbursed for providing this technology to patients.
"What often makes for a good outcome isn't the greatest and newest technique, but a good surgeon and motivated, healthy patient who undergoes a procedure without any complications," says Dr. Finn. "We can use computers to navigate for joint replacements, but for an experienced surgeon the technology may not add benefit; instead, it would only increase the cost and risks associated with the procedure. You must have empirical knowledge and intuition to be a good surgeon — there is no substitute for that in high technology."
Even technological advancement showing cost and quality benefit may be stymied over the next few years due to lack of funding. If payors decline to reimburse for technology in favor of the traditional procedure, companies will stop focusing on advancement in that product line. "If there isn't a market for new devices, we will stop advancing technology," says Dr. Kolisek. "This would be terrible for patients and the entire medical community."
However, there are some bright spots in technology development for orthopedic surgeons. Patient-specific cutting guides for joint replacements may increase the accuracy, speed and outcome predictability of the surgery without unnecessarily raising costs.
"Patient-specific cutting guides for joint replacements are different from other advancements, such as computer navigation or robotic surgery, because it actually decreases surgical time," says Dr. Mehta. "Custom-made cutting guides that are MRI or CT based are an exciting development that will really go mainstream this year."
When it comes to assessing new technology, one of the biggest challenges for orthopedics surgeons is differentiating marketing hype from qualities that are actually advantageous to the procedure. While device companies try to distinguish their products on a competitive market, surgeons must know whether the product will make a positive enough impact on their patients to warrant all costs involved. Sacheen Mehta, MD, an orthopedic surgeon with Comprehensive Orthopaedics & Rehabilitation in Richardson, Texas, and Methodist Hospital for Surgery in Dallas, uses a simple rule in making this distinction: When a surgery is made more complicated, there are more things that can go wrong; when the procedure is simplified, more things go right.
Even if new devices aren't being released every day, there will still be room for basic science and procedural research in the future. "One of the most exciting things about the field is seeing how the technology and procedures evolve through the years," says Dr. Parsons. "The basic science research on tendon, cartilage and bone is allowing dramatic clinical improvement for our patients."
5. Dealing with patients who have unrealistic expectations. Dr. Finn often sees patients who have unrealistic expectations for their joint replacements based on outcomes for famous athletes or provider marketing material. "In some cases, patients think they are getting a new joint that is going to be as good as their natural one," says Dr. Finn. "That might be the case for some patients, but not everyone. People undergoing joint replacements from severe arthritis will experience pain relief, but they must be educated about their limitations."
Advertising campaigns for orthopedic implants sometimes add to the myth of a natural knee or hip. Device companies may show someone undergoing strenuous physical activity, such as downhill skiing, after a joint replacement with their implant, but in many cases perfectly good joint replacements may not allow the patient to participate in high impact athletic endeavors.
"Patients might have a perfect operation and they come to me, as a revision specialist, because they think there is something wrong since they can't do everything pain-free," says Dr. Finn. "A very common scenario is that most patients with knee replacements don't like to kneel. You may not be able to be a plumber or do Judo with a knee replacement. People think they are going to be able to do anything after a their procedure, which might not be the case. Patients shouldn't be going into surgery with these unrealistic expectations."
As people are engaging in more competitive physical activity and wanting to remain active later in life, they are developing injuries and degenerative conditions at younger ages than in previous decades. However, these younger patients are more impatient with the recovery process and may experience worst outcomes as a result. "It has been my observation that younger patients who are more physically fit struggle more with recovery and are less satisfied with the procedure than elderly patients," says Dr. Finn. "Yet we are seeing younger patients more often these days."
6. More orthopedic surgeons are heading toward hospital employment. For the past few years, orthopedic surgeons have watched hospitals a hire large number of specialists to enhance their market share; almost all cardiologists and a significant number of other specialists are now employed. Orthopedic and spine surgeons are some of the last hold-outs in private practice, but the pressures on the business side of medicine have made this increasingly difficult. A growing number of orthopedic surgeons coming out of medical school are also choosing the security of hospital employment over the risk of private practice — a decision some orthopedic surgeons with more experience feel they will regret in the future.
"Orthopedic surgeons are deciding to become employed by the hospital because it's difficult to run a group practice in an environment of high costs and low reimbursement," says Dr. Kolisek. "Often with the first contract, hospitals will pay the surgeon more than the surgeon would receive in private practice so this is very attractive. However, when they have to renew their contract, it may not be as attractive as these surgeons won't be paid more than they are bringing in."
Orthopedic surgeons who are close to retirement are also choosing to sell their business in favor of hospital employment to secure a good contract for their last few years practicing medicine. This is an attractive option for surgeons who are close to retirement because overhead costs have grown significantly in the past two decades.
"When I began my practice in 1992, my overhead was around 40 percent, so I got to keep 60 cents of every dollar collected for personal income," says Dr. Kolisek. "My overhead now is 78 percent so I get to keep only 22 cents on every dollar I collect; at the same time, I'm collecting fewer dollars than I did 20 years ago as reimbursements have decreased. The increased government regulations make it difficult to practice medicine and the overhead costs make it hard to keep our lights on."
While it's easy to see why hospital employment looks like the best option for surgeons now, they must also consider what they are giving up: their autonomy. "Surgeons who succumb to the downward pressure on their income and choose hospital employment have lost their autonomy instead of battling to find opportunities to keep practicing independently," says Dr. Kolisek.
7. Merging into large orthopedic groups and finding hospital partners. Even though government regulations and low reimbursements have made it difficult for orthopedic groups to survive without hospital employment, many large groups around the country maintain profitability because of their size. The more surgeons in a group, the more negotiating power that group has in payor contract rates and hospital partnerships. In many communities around the country, small orthopedic groups are merging together and leveraging their power productively.
"Smaller groups are merging into larger groups to stay in business," says Dr. Kolisek. The size and strength of a large group also makes it a formidable partner for hospitals looking to enhance efficiencies and quality of care. A large orthopedic group and a hospital can form a co-management agreement for running the orthopedic service line, which is attractive for both parties.
"With co-management agreements, the hospital improves value, efficiency and outcomes while decreasing costs and complications; the physician group now has another income source from the agreement by sharing in the cost savings assuming they do a good job," says Dr. Kolisek. "The hospital systems that have eyes wide open will try to set up partnerships that are positive for both parties. Those partnerships can be longer lasting than a situation where hospitals hold a competitive advantage over the physician groups by employing them, which can blow up because of physician dissatisfaction."
Accountable care organizations are a new concept that the federal government wants to implement. "Physicians and hospitals are skeptical as these are very costly to set up and preliminary results from pilot sites are not promising," says Dr. Kolisek. "It is really another attempt to withhold care from patients as I see it."
With the final rule release late in 2011, many organizations are deciding whether to create an ACO and what type of structure would benefit specialists. An issue Dr. Kolisek sees with ACOs is the payment structure; if payments go to the hospital in one lump sum, the hospital would decide what percentage orthopedic surgeons received and the less care you deliver, the more money you make. This may not be good for patients.
"If surgeons participate in this type of ACO, physician groups are going to fight with hospitals for reimbursement," Dr. Kolisek says. "How will the hospital get their arms around making sure the patient is directed to physicians with the most efficient, highest quality and highest value care?"
8. Maximizing revenue in orthopedic groups. Even if large orthopedic groups are the way of the future, these groups must be savvy about capturing as much of the revenue from an episode of care as possible. This means adding ancillary services to the practice. "There may be other opportunities as well to capture additional income," says Dr. Kolisek. "Orthopedic groups can own a surgery center, MRI and physical therapy services to help keep their practice going. Relying just on reimbursement for professional services rendered no longer works. We must deliver a high quality product with great value at a low cost. High quality care must be reimbursed better than lower quality care in the future."
Adding physical therapy and other conservative treatment to your practice is especially important as we move toward an era of patient information and empowerment. People are now able to access information online about many types of traditional and non-traditional treatment methods. Often, patients decide which methods they want to try first before even stepping foot in a physician's office, says Dr. Mehta. Additionally, treatment pathways often dictate a period of conservative treatment before opting for surgery. Having conservative treatment services available at the practice will attract more patients.
"People are asking for conservative care upfront and you want to capture that revenue," says Dr. Mehta. "If you have physical therapy, you can also provide those services to patients recovering from surgery and capture that revenue postoperatively as well. Onsite physical therapy also adds convenience for patients because all their services are in one location."
Physical therapy can be a beneficial ancillary service to incorporate into your practice, but providing DME services is the easiest to implement, says Dr. Mehta. "Sending patients out for DME is an inconvenience for the patient, a hassle for the physicians and the practice is giving revenue away," he says. "It may require some upfront investment to stock the DME, but that easily pays for itself."
9. Quality rating in orthopedic and spine care. "Cost-effective" is now a buzz word among healthcare providers; everyone wants to provide the highest quality of care to increase their share of available healthcare dollars. However, the definition of "quality" in healthcare is still murky, as many websites and rating systems rely on inappropriate factors for reflecting a surgeon's ability to achieve good outcomes.
"There are so many groups now putting ratings out for physicians on their website, and many of these groups haven't been around for very long," says Dr. Kolisek. "Every one defines quality differently."
Most would agree that, in the purest sense, "quality" refers to achieving the best possible outcome given the limitations of each patient's situation. A surgeon who treats sicker patients may not achieve the same outcomes as a surgeon who treats otherwise healthy patients or athletic injuries. The disparity in functional outcome and complication rate is often more a factor of the patient's lifestyle and comorbidities than a reflection of clinical ability. These nuances are often lost on websites comparing surgeons on the same plane.
Another weakness of some rating systems is conflation of quality outcomes with patient experience. For example, the rating system might ask patients whether they had to spend time in the surgeon's waiting room before the visit; longer wait times reflect negatively on quality scores, which may be misleading.
"A physician who isn't busy will have time to see their patients right away and spend more time with them during the visit," says Dr. Kolisek. "The patient might be satisfied with the short wait time and the amount of time they spent with the physician, but that doesn't define quality; it just means the physician wasn't that busy. When physicians are very busy, they will often see several more patients per day and often this causes then to run behind." Running behind schedule doesn't mean that you are not as good as a physician who stays on time. It could be that you are a very good physician and, therefore, more busy than the other physician with more patients wanting to see you.
10. Increased patient responsibility in healthcare spending. Without a clear idea of how health information exchanges and other facets of healthcare reform will impact the patient/payor relationship, it's difficult to predict where payment trends are heading. One principle remains clear, however, says Dr. Kolisek: patients with insurance coverage that covers most of their bills are more likely to spend higher amounts on their care than patients with an insurance plan where they have to spend more of their own money like a high deductible plan. It is tempting to want everything rather than just what you need if you don't have to pay for it, he says.
"In some cases, I'll tell patients they don't need an MRI after looking at their X-rays and I won't order one, so they go to a different provider who will order the MRI," says Dr. Kolisek. "Now the healthcare costs go up because we have two physician visits, two X-rays and an MRI. Our practice owns an MRI machine, but I won't order an image if the patient doesn't need it. In healthcare, our system is set up so that people are shopping around with everyone else's credit card and they want everything done because they don't have to pay the bill."
On the other hand, Dr. Kolisek also sees patients with high deductible plans who do need MRIs, but they are reluctant to undergo the studies because they'll be paying for it. "They will ask me if it is really necessary," says Dr. Kolisek. "We have to somehow change the medical system to one where you can't just let people shop with someone else's credit card and not be responsible for the bill. If we do, they will continue to increase unnecessary spending."
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