This article is written by Tommy Mitchell, President, CEO, Founder of OrthoDirectUSA.
Blair Rhode, MD, an orthopedic surgeon based in the Chicago area and owner of RoG Sports Medicine, has become an innovator in the process of manufacturing orthopedic implants. He decided that the mark-up being charged for stable technologies was too much and set out to change that. He has also been outspoken about the direction that medicine is going. He sees a top down approach that will fundamentally change physicians' autonomy and ability to practice medicine the way they were meant to. Here, Dr. Rhode discusses his thoughts on this new reality.
Question: Dr. Rhode, what changes have you seen in recent physician graduates?
Dr. Blair Rhode: When I started, I started on my own. I took the risk and reaped the reward. Now, new graduates look for a job. They look to get hired by someone else. They value the quality of life. They want to know how many days off they have. They don't want to hear about fixed and floating overhead. They have no interest in community relations to build their practice.
The problem is if doctors do not want to be part of the design, they will not play a primary role in the future of medicine. They will be in a supplanted role from now on. They don't realize that this is a slippery slope to being just a cog in the wheel.
Q: How do physicians prevent this scenario from happening?
BR: The physicians that do not want to be part of this inevitability have to step up and participate. There is not much initiative by most physicians. You cannot motivate everyone.
I see two scenarios:
Those who just want to get a job. They going to carry a lunch pail to work, clock in at 9 a.m., and clock out at 5 p.m. They are going to be told what, where and how they are going to practice. They are also going to put themselves into a very vulnerable position when it comes time to decide how much that 9 to 5 job is worth. The boss is going to forget very quickly the 14 years of your life you gave up to get to where you are. While the CEO of the hospital eats his steak lunch in his corner office overlooking the lake, the employee physician will be eating their lunch (on their hour break) in the cafeteria — counting the minutes until it's time to go home.
The other scenario is those who want to participate in the change that is happening. You have to choose a career path from a socioeconomic standpoint. Those with energy and initiative, they can carve out their own career path. It is kind of like the book about little red hen. Everyone wants a bite of the bread. But it was the hen that planted the seeds, cut the wheat and baked the bread. Because the lazy dog, sleepy cat, and noisy duck didn’t help, they didn’t get to eat the bread.
Q: I believe that we are heading to a single payer model. This may take to form of accountable care organizations (ACOs) or bundled payment models. How can the motivated physician have a skin in this game?
BR: The physician must take an equity position. It has been said that physicians have lost their authority but continue to have all the same responsibility. We lost this game. The arena we used to play in was one of a third party payor with an insulated consumer. The ride was great but the game is over. We now exist in a system that sees the Federal Government determining pricing and the insurance companies feeling that this is the price they should pay as well. The physician must start a new game.
If physicians are willing to take a seat at the table and become part of the process, they can take ownership of the result. An example is physicians at a particular hospital agreeing on a best practice and embracing efficiencies. This may include standardizing treatments, agreeing on outdated treatment methods or non-proven therapies. Cell saver in routine joint replacement, CPM (continuous passive motion machines), PRP (platelet rich plasma), length of post-operative therapy — the list goes on and on. Physicians will also have to take a hard look at low cost implants and agree to use them. If they can all agree and lower costs, they can then begin the conversation of "what is in it for me".
Q: Low cost alternatives sure sounds like generics. Are you a proponent of these value based alternatives?
BR: Yes. But branding is a powerful economic force. The irony is that the major problems with orthopedic technology are with new innovation. Dr. John Callahan's paper of 25 year follow up of the cemented Charnley stem showed that this old technology performed pretty darn well. Look at the TV ads by lawyers. You can learn about innovation by the plaintiff attorneys and who they are suing. You don't see any ads asking if you had a recent hip replacement with a generic implant.
A recent Australian study showed that not a single new artificial hip or knee introduced over a recent five-year period was any more durable than older ones. In fact, 30 percent of them fared worse than the stable technology alternative.
Depuy, Zimmer, Smith and Nephew, Biomet, Stryker; they are brands. However, many of their products are outsourced to contract manufacturers.
Q: Do you feel that a conflict of interest exists when physicians are compensated for net savings?
BR: There is conflict of interest in everything we do. When I tell someone I am going to operate on them and get paid for the surgery, I have a conflict. If I participate in an HMO and I need to see 60 patients a day to meet my quota, when I tell the 59th patient that I need to cut the visit short to see the last patient — I have a conflict. I can be ethical or unethical by being or not being a player. Ethics are independent of whatever I am doing. There are people who have conflicts in government (a lot), academia, business, ect.
Q: What is the next step for the physician?
BR: We are taking applications for jobs. One career path is the janitor. The other is the path to the CEO. Both are equally qualified. The janitors can just show up. They don't even have to come to the meetings. The CEOs have to think of their career path. They have to participate. They have to multi-task and become involved in the process. If this is co-management, they need to figure out as a group how they are going to achieve net savings and then fight like hell for their piece of the pie. That pie is going to keep shrinking. When it runs out of money, the physicians should be ready to be part of the free enterprise that will pick up the pieces. There are already plenty of destinations all around the world ready to give access to medical treatment to those ready to pay a fair and reasonable price.
If you want to have a say in how things turn out, you have to participate in all parts of the process. This included the medical and business side of things. The problem now is, if you don't participate in the business side, you don't get to control the medical one. The independent payment advisory board (IPAB) is going to figure out how many units your patient is worth and decide for you. My challenge to young orthopedic surgeons is to meet the people that are innovating in this space and get to work protecting your field and your patients. Good luck.
More Articles on Orthopedic Practices:
6 Statistics on Orthopedic Surgeon Practice Management
Surviving a Turbulent Healthcare Market: 7 Points From Dr. Steven Wertheim of Resurgens Orthopaedics
5 Best Practices for Managing Claims in Orthopedic Groups
Blair Rhode, MD, an orthopedic surgeon based in the Chicago area and owner of RoG Sports Medicine, has become an innovator in the process of manufacturing orthopedic implants. He decided that the mark-up being charged for stable technologies was too much and set out to change that. He has also been outspoken about the direction that medicine is going. He sees a top down approach that will fundamentally change physicians' autonomy and ability to practice medicine the way they were meant to. Here, Dr. Rhode discusses his thoughts on this new reality.
Question: Dr. Rhode, what changes have you seen in recent physician graduates?
Dr. Blair Rhode: When I started, I started on my own. I took the risk and reaped the reward. Now, new graduates look for a job. They look to get hired by someone else. They value the quality of life. They want to know how many days off they have. They don't want to hear about fixed and floating overhead. They have no interest in community relations to build their practice.
The problem is if doctors do not want to be part of the design, they will not play a primary role in the future of medicine. They will be in a supplanted role from now on. They don't realize that this is a slippery slope to being just a cog in the wheel.
Q: How do physicians prevent this scenario from happening?
BR: The physicians that do not want to be part of this inevitability have to step up and participate. There is not much initiative by most physicians. You cannot motivate everyone.
I see two scenarios:
Those who just want to get a job. They going to carry a lunch pail to work, clock in at 9 a.m., and clock out at 5 p.m. They are going to be told what, where and how they are going to practice. They are also going to put themselves into a very vulnerable position when it comes time to decide how much that 9 to 5 job is worth. The boss is going to forget very quickly the 14 years of your life you gave up to get to where you are. While the CEO of the hospital eats his steak lunch in his corner office overlooking the lake, the employee physician will be eating their lunch (on their hour break) in the cafeteria — counting the minutes until it's time to go home.
The other scenario is those who want to participate in the change that is happening. You have to choose a career path from a socioeconomic standpoint. Those with energy and initiative, they can carve out their own career path. It is kind of like the book about little red hen. Everyone wants a bite of the bread. But it was the hen that planted the seeds, cut the wheat and baked the bread. Because the lazy dog, sleepy cat, and noisy duck didn’t help, they didn’t get to eat the bread.
Q: I believe that we are heading to a single payer model. This may take to form of accountable care organizations (ACOs) or bundled payment models. How can the motivated physician have a skin in this game?
BR: The physician must take an equity position. It has been said that physicians have lost their authority but continue to have all the same responsibility. We lost this game. The arena we used to play in was one of a third party payor with an insulated consumer. The ride was great but the game is over. We now exist in a system that sees the Federal Government determining pricing and the insurance companies feeling that this is the price they should pay as well. The physician must start a new game.
If physicians are willing to take a seat at the table and become part of the process, they can take ownership of the result. An example is physicians at a particular hospital agreeing on a best practice and embracing efficiencies. This may include standardizing treatments, agreeing on outdated treatment methods or non-proven therapies. Cell saver in routine joint replacement, CPM (continuous passive motion machines), PRP (platelet rich plasma), length of post-operative therapy — the list goes on and on. Physicians will also have to take a hard look at low cost implants and agree to use them. If they can all agree and lower costs, they can then begin the conversation of "what is in it for me".
Q: Low cost alternatives sure sounds like generics. Are you a proponent of these value based alternatives?
BR: Yes. But branding is a powerful economic force. The irony is that the major problems with orthopedic technology are with new innovation. Dr. John Callahan's paper of 25 year follow up of the cemented Charnley stem showed that this old technology performed pretty darn well. Look at the TV ads by lawyers. You can learn about innovation by the plaintiff attorneys and who they are suing. You don't see any ads asking if you had a recent hip replacement with a generic implant.
A recent Australian study showed that not a single new artificial hip or knee introduced over a recent five-year period was any more durable than older ones. In fact, 30 percent of them fared worse than the stable technology alternative.
Depuy, Zimmer, Smith and Nephew, Biomet, Stryker; they are brands. However, many of their products are outsourced to contract manufacturers.
Q: Do you feel that a conflict of interest exists when physicians are compensated for net savings?
BR: There is conflict of interest in everything we do. When I tell someone I am going to operate on them and get paid for the surgery, I have a conflict. If I participate in an HMO and I need to see 60 patients a day to meet my quota, when I tell the 59th patient that I need to cut the visit short to see the last patient — I have a conflict. I can be ethical or unethical by being or not being a player. Ethics are independent of whatever I am doing. There are people who have conflicts in government (a lot), academia, business, ect.
Q: What is the next step for the physician?
BR: We are taking applications for jobs. One career path is the janitor. The other is the path to the CEO. Both are equally qualified. The janitors can just show up. They don't even have to come to the meetings. The CEOs have to think of their career path. They have to participate. They have to multi-task and become involved in the process. If this is co-management, they need to figure out as a group how they are going to achieve net savings and then fight like hell for their piece of the pie. That pie is going to keep shrinking. When it runs out of money, the physicians should be ready to be part of the free enterprise that will pick up the pieces. There are already plenty of destinations all around the world ready to give access to medical treatment to those ready to pay a fair and reasonable price.
If you want to have a say in how things turn out, you have to participate in all parts of the process. This included the medical and business side of things. The problem now is, if you don't participate in the business side, you don't get to control the medical one. The independent payment advisory board (IPAB) is going to figure out how many units your patient is worth and decide for you. My challenge to young orthopedic surgeons is to meet the people that are innovating in this space and get to work protecting your field and your patients. Good luck.
More Articles on Orthopedic Practices:
6 Statistics on Orthopedic Surgeon Practice Management
Surviving a Turbulent Healthcare Market: 7 Points From Dr. Steven Wertheim of Resurgens Orthopaedics
5 Best Practices for Managing Claims in Orthopedic Groups