Downward pressure on reimbursement, rising consolidation and rapid outpatient migration are some of the key trends affecting the spine field.
While the Coronavirus Aid, Relief, and Economic Security Act provided critical economic relief to many orthopedic practices last year, surgeons knew that government funding would come at a price.
CMS reimbursement and physician fee cuts were expected for 2021, but many providers were shocked at how steep they were — initially an up to 10.2 percent decrease in reimbursement for some specialists.
Last month, however, CMS updated the Physician Fee Schedule to reflect the changes in the Consolidated Appropriations Act. The revised conversion factor for 2021 is $34.89, 3.3 percent less than the conversion factor in 2020.
Though the most recent COVID-19 stimulus package has mitigated CMS cuts, many surgeons fear more could be on the horizon from CMS and commercial payers.
"The hamster wheel is going to get driven faster for less," Lali Sekhon, MD, PhD, of Reno (Nev.) Orthopedic Center, told Becker's. "With so much money spent at a state and federal level on COVID relief, reducing payments for Medicaid and Medicare are in the pipeline."
One strategy providers are increasingly adopting to address economic challenges is banding together to form larger groups. Over the past year, the orthopedic field has seen three supergroups of 100-plus physicians created through mergers in Florida, Tennessee and Texas.
Although the pandemic somewhat stifled innovation last year, navigation, robotics and augmented reality technologies continue to make noise in spine.
But hospitals and health systems may be less willing to fork out capital for the next "game changer" given the challenging economic climate and accelerating outpatient migration. Smaller device companies will likely feel the pinch as hospitals look to reduce costs wherever possible.
"Medical device companies will have to adapt to this new normal and offer services to surgeons to help them transition their practice to the outpatient space," said Alok Sharan, MD, of NJ Spine and Wellness in East Brunswick. Such services include AR/virtual reality technologies to train surgeons and staff, along with digital tools to facilitate remote patient monitoring.
More ASCs will likely invest in robotics as hospitals expect to lose an increasing number of spine cases over the next five years, according to Vladimir Sinkov, MD, of Sinkov Spine Center in Las Vegas.
"Hospitals still have a lot of capital they can invest, where surgery centers are typically starved of capital, which is why it makes sense to partner," Dr. Sinkov said. "In my opinion, outpatient migration of spine surgery will encourage surgery centers to rent or purchase surgical robots and other advanced technology to drive that exodus even faster."
For hospitals, the issue now is the value on investment, according to Martin Roche, MD, of Hospital for Special Surgery in West Palm Beach, Fla.
"The key now will be how companies sell their robots both to hospitals and to ASCs," Dr. Roche said. "Right now, as surgeons are investors in ASCs, they're going to be more introspective on how much money they put up front.
"In certain cases the business model of how companies are selling robots will change. They may link it to how many cases you do, which can help pay it down, and develop various 'at risk' models. I think orthopedic companies are drawing up different types of business models because they see robotics as the future as well."
All these factors are likely to accelerate the trend toward outpatient surgery, in addition to new prior authorization requirements and CMS and commercial payers encouraging more cases to be done at ASCs.
One thing is for certain: The future is bright for the ASC industry, which continues to bring cases to the outpatient setting.