No industry is immune to inflation, including the musculoskeletal field. In just 30 days, three major orthopedic and spine companies have laid off fractions of their workforce.
Here are three ways that inflation is impacting the orthopedic industry in 2024:
1. On top of rising inflation, physician pay rates have dipped in the last three consecutive years. "The market forces continue to demand that TOC performs more cases in our ASCs," Tallahassee (Fla.) Orthopedic Clinic's CEO, Michael C. Boblitz, recently told Becker's. "Employers and purchasers remain frustrated with rising cost of care and seeking lower cost settings, and hospitals are challenged with managing their top priority, which is emergent and complex patients. This places more pressure on our ASCs to serve as a relief valve," Mr. Boblitz said. The group's "ultimate aim is to outrun the ongoing Medicare cuts and rising inflation costs through continued double digit annual growth," he added.
2. Philadelphia-based Rothman Orthopedic Institute is laying off 5% of its workforce, citing that "Inflation, healthcare labor, and other costs of providing medical care are growing faster than reimbursement for healthcare services."
3. Spine surgeons are feeling the pinch through staff shortages, growing technology usage and inflation. "Having a hospital as a partner is actually a really good idea because you're not as adversarial with taking out patients from the system. We share in that revenue, and the hospital's have a lot more power with contracting, so we were able to get the hospital contracts on our surgery center, which is helpful as opposed to going out on our own and raising a lot of capital to do so," Ernest Braxton, MD, spine surgeon at Vail-Summit Orthopaedics & Neurosurgery in Vail, Colo., told Becker's.