8 Implications of Healthcare Reform on Orthopedic and Spine Practices

The recently enacted healthcare reform legislation will affect all healthcare stakeholders — consumers, providers and employers — but sorting out the winners from the losers is an inexact science at best at this point. For physicians, especially those in specialty surgical areas, early signs are mixed. The potential benefits of having millions of new patients entering the healthcare system with insurance coverage might be dampened by reimbursement challenges and shortages among the ranks of physicians that could end up reducing patients' access to care.

Here are eight ways orthopedic, spine and other specialty surgeons believe their lives will change under the new healthcare reform landscape.

1. A greater number of insured patients will bring both benefits and challenges to practicing surgeons. Healthcare reform is expected to bring insurance coverage by 2019 to some 32 million people who currently do not have it. "Overall, I think we're excited about a lot of the things in healthcare reform, and the expansion of coverage for people who previously did not have coverage is pretty exciting," says Stuart Weinstein, MD, president of the American Academy of Orthopaedic Surgeons from 2005-2006. Dr. Weinstein, the Ignacio V. Ponseti chair and professor of orthopaedic surgery at University of Iowa Health Care, says that for the general public, this development is a positive one.

However, some orthopedic surgeons are concerned that insurance coverage will not necessarily guarantee patients access to care in their specialty. "It's very gratifying that a large chunk of the American population that was previously uninsured will have access to healthcare," says Raj Rao, MD, director of spine surgery at the Medical College of Wisconsin's Department of Orthopaedic Surgery in Milwaukee. "But the issue of access to specialty care is as yet unclear. Whether specialists continue to see these patients will be dependent in part on reimbursement rates and whether these rates adequately cover the costs of providing good medical care." If surgeons believe their costs are not going to be covered, they may decide that they are unable to continue to see these patients, he suggests.

2. Failure to fix Medicare's physician reimbursement formula is a major drawback for specialty surgeons. From the perspective of orthopedic and spine surgeons, "when you look at things that haven't been included and weren't addressed (in the healthcare reform legislation), those are problematic," Dr. Weinstein says. Near the top of the list of things that didn't make it into the law is fixing Medicare's sustainable growth rate (SGR) formula, which has been a top priority for physicians as their practice costs continue to rise. But with a price tag topping $200 billion, SGR reform didn't make it into the final bill. Instead of fixing the formula, Congress has been patching and putting off a 21 percent reimbursement cut in fits and starts, which gives physicians little sense of certainty about their financial futures.

The American Association of Orthopaedic Surgeons and other orthopedic groups outlined some of their major objections to the reform legislation in a Dec. 2009 letter to Senate Majority Leader Harry Reid. "By not repealing and replacing the flawed physician payment formula, this legislation severely threatens seniors' ability to access timely and appropriate care from their physicians," the letter states.

This assertion is bolstered by a more recent survey of surgeons released in March by the Surgical Coalition — an umbrella group including the American College of Surgeons and 22 other medical organizations — suggesting that if Medicare reimbursement cuts were to go into effect as planned, many surgeons would stop seeing Medicare patients altogether.

When asked what changes to their Medicare participation status they would make if Medicare payments were cut by 21 percent, 37 percent of responding surgeons said they would not participate in Medicare anymore. Some 29 percent said they would opt out of Medicare for two years and privately contract with Medicare patients. Overall, less than one-third of the 96 percent of respondents who currently participate in Medicare said they would be able to remain as Medicare participating physicians. Many also said they would have to stop providing certain services, reduce staff and put off purchases of new medical equipment, according to the survey.

Dr. Rao says his feelings and experience are in line with these survey results. "I think physicians want to do what's right for their patients," he says. "By virtue of being at an academic institution, I will continue to see patients who need my services, but I'm not sure I can say the same for my colleagues who are in private practice."

3. Specialty surgeons welcome insurance market reforms. In spite of major concerns about reimbursement issues not addressed in healthcare reform, orthopedic and spine surgeons say they favor the new law's insurance market reforms. Spine and orthopedic patients tend to have chronic medical problems, so the fact that they won't lose their insurance as a result of pre-existing conditions is a positive development for the continuity of their care and for the physicians who treat them, says Dr. Weinstein.

4. Lack of meaningful medical liability reform a blow to specialty surgeons. While the legislation includes funding for five-year state demonstration grants for malpractice reform pilot programs, the provisions are relatively restrictive and do not address the long-term and widespread costs of medical malpractice. "This is a problem that affects access and increases healthcare costs," says Dr. Weinstein. "In the bills, nothing meaningful has been done."

Spine surgeons, in particular, who practice in such a high-risk specialty, have a huge stake in malpractice reform, Dr. Weinstein suggests. "When the average medical student comes out of school with $100,000-$200,000 of debt, they are looking to protect themselves as well as care for the patient," he says. "So there will be unnecessary procedures and tests." This kind of defensive medicine ratchets up costs, and the failure of healthcare reform to tackle the broader problem "is a significant drawback," he says.

5. New Medicare advisory board lacks accountability. Several surgeons expressed frustration at the creation of a new Medicare advisory board as part of healthcare reform. Decisions about benefit policy and payments that are currently made by members of Congress, who are accountable to voters, will soon be made by an unelected group without the same kinds of checks, balances, oversight and specialty physician input, according to the orthopedic surgeons. While the law explicitly prohibits the "rationing" of care, it is unclear how costs will be cut, says Dr. Rao.

"Reduction of Medicare costs is either going to be by reduction in the number and types of services provided or by cutting reimbursements across the board," he says. "This is an area of concern, especially since this board has little or no congressional oversight or specialty physician input."

Dennis Maiman, MD, chairman of the Department of Neurosurgery at the Medical College of Wisconsin and director of clinical neuroscience at Froedtert & Medical College of Wisconsin, says this raises a broader issue about control of the medical profession. "The point is these guys are not reliable guardians of patients' health," he says of the government groups making decisions about the future of the healthcare system.  "When we talk about spine surgery, we emphasize evidence-based practice, which should be determined by science."

6. Potential lack of surgeons to treat patients. Dr. Weinstein and others suggest there may be a contraction of services that results from declining reimbursements against the backdrop of escalating physician costs. "I think physicians will consolidate themselves, maybe offer less services, maybe screen patients a bit better," he says. "I think patient access will be a problem."

Dr. Maiman says he has conducted computer modeling in an attempt to predict the payment scenario under healthcare reform, incorporating payments at Medicaid rates for patients who currently have no insurance and making adjustments for the increased costs to physicians of doing business. The projected outcome, he says, is a 25-30 percent decrease in revenue in 2018 if healthcare reform unfolds according to plan. This would lead medical colleges to hire fewer faculty and physicians to spend less money, perhaps opting not to treat certain patients with bare-bones insurance. "I think it will be good for certain types of environments, like public clinics," he says, "but I don't think it will be very good for very many people."

In January, The Medicus Firm, a national physician search firm, surveyed 1,195 physicians in various specialties and career levels around the country, and nearly one-third indicated they would want to leave medical practice after healthcare reform was implemented. This is against a backdrop of an increase in physician jobs of more than 22 percent in the decade ending in 2018. "The reality is that there may not be enough doctors to provide quality medical care to the millions of newly insured patients," said Steve Marsh, managing partner at Medicus, in a news release.

7. Restriction of physician ownership of hospitals could reduce options for orthopedic surgeons. Many physician-owned specialty hospitals are either orthopedic or cardiac facilities, says Weinstein, and the new law's ban on new physician-owned hospitals and restrictions on existing ones will curtail their options. "In physician-owned hospitals, they have more control over quality and the efficiency of care they're delivering," he says. "We think that in those hospitals, the potential for greater patient satisfaction, success in delivering better outcomes and lowering costs all exist."

8. Focus on primary care physicians could hurt specialties. Weinstein and other specialty physicians have suggested that the healthcare reform law's increased payments to primary care providers could come at the expense of specialty providers. "We realize there is a shortage of primary-care physicians," he explains. "But there's a shortage of physicians across the board in different specialties." Among them are pediatric orthopedic surgery and general surgery, he says. "If you take funds away from those other specialties, you'll have even worse shortages across the board."

Contact Barbara Kirchheimer at barbara@beckersasc.com.