Commentary

Be involved in the continued transformation of health care

It goes without saying that 2017 was a tumultuous year in health care. However, current political events suggest that 2018 will likely surpass 2017 in terms of changes and challenges. Physicians continue to be overwhelmed by the reporting information required by the government, increasing costs for facilities, employees and electronic medical records – all in the face of declining reimbursement.

Anthony A. Romeo, MD
Anthony A. Romeo

According to the most recent census from the American Academy of Orthopaedic Surgeons, 59% of orthopedic surgeons in the United States are in some form of private practice. Private practice models vary throughout the United States. However, due to decreasing profit margins from clinical care alone, a practice’s success is increasingly weighted more heavily on the assets and benefits of ancillary services.

Clinically related services, such as radiology, physical and occupational therapy, durable medical goods, employed non-surgical physicians and in-office procedures, can comprise a significant portion of the margin needed to support the compensation to physicians, expansion of the practice and maintenance of EMRs. Many private practice groups also have equity and ownership in the facilities used for their surgical services, thereby controlling almost all aspects of musculoskeletal care for their patients. This model has been successful and continues to support the continued expansion of larger orthopedic groups in the United States.

Employment options

The increasing demands and resources required to manage an orthopedic practice has led to more physicians to select employment positions, which currently represent 37% of full-time orthopedic surgeons in some form of employment. Some have suggested the primary driving force behind the increasing number of employed physicians is related to aggressive acquisition efforts of hospitals and health care systems. However, the most influential factors appear to be increasing overhead costs with decreasing reimbursement, challenges of leadership and administration, and lifestyle balance coveted by an increasing number of orthopedic surgeons.

The non-clinical real estate and investment practices of hospitals and health care systems beyond patient care responsibilities, which are further enhanced in many cases by non-profit tax status, provide the financial ability to acquire physicians, ancillary services, ASCs, additional hospitals and long-term care facilities so they vertically integrate all services and create volume-based savings and increased revenue. The few private practice orthopedic surgery groups that financially leverage their practices in a similar manner demonstrate continued growth and increased market share.

Outpatient surgical services

Another powerful event effecting orthopedics that will have a great impact in 2018 is not just the expansion of the range of musculoskeletal services, but the significant continued growth of outpatient surgical services. Improvements in minimally invasive surgical techniques, anesthesia and pain management and a growing desire of patients to recover at home has set the stage for high-quality care equal to what has been delivered in a hospital setting. The value for patients, physicians and third-party payers is undeniable.

The federal government is realizing the value by removing total knee arthroplasty from the hospital inpatient-only list for CMS in 2018. Unfortunately, the government moves slowly, and is significantly influenced by those who have something to lose in the migration to the outpatient setting. The removal of TKA from the hospital inpatient-only list does not come with the approval of the procedure on the ambulatory surgery list, thereby relegating TKA to remain in a hospital setting for Medicare and Medicaid patients. Other arthroplasty and spine procedures are likely to be removed from the hospital inpatient only list soon. Ideally, the time will come when surgeons and patients will have the opportunity to choose the best location based on overall value and safety, thus providing the best care for the best price.

Continued debate

As we begin 2018, it is clear mergers, acquisitions and new partnerships in health care will be frequent news. Private practice groups and large health care systems will attempt to control the impact of future legislation and other demands from third-party payers, which will affect our ability to deliver high-quality care at reasonable costs. The battle for patients, geographic footprint, reimbursement and advanced EMR systems will be expensive all while the continued public debate remains about reducing health care costs.

Everything is lining up to make it more challenging to predict the future and to develop systems to provide high-quality care. Whether employed in a private practice or as part of a small group or a major health care system, orthopedic surgeons need to make every effort to be involved in the continued transformation of health care. By understanding the greatest forces in health care, one has an excellent opportunity to help shape the future delivery of musculoskeletal care.

Disclosure: Romeo reports he receives royalties, is on the speakers bureau and is a consultant for Arthrex; does contracted research for Arthrex and DJO Surgical; receives institutional grants from AANA and MLB; and receives institutional research support from Arthrex, Ossur, Smith & Nephew, ConMed Linvatec, Athletico and Miomed.

It goes without saying that 2017 was a tumultuous year in health care. However, current political events suggest that 2018 will likely surpass 2017 in terms of changes and challenges. Physicians continue to be overwhelmed by the reporting information required by the government, increasing costs for facilities, employees and electronic medical records – all in the face of declining reimbursement.

Anthony A. Romeo, MD
Anthony A. Romeo

According to the most recent census from the American Academy of Orthopaedic Surgeons, 59% of orthopedic surgeons in the United States are in some form of private practice. Private practice models vary throughout the United States. However, due to decreasing profit margins from clinical care alone, a practice’s success is increasingly weighted more heavily on the assets and benefits of ancillary services.

Clinically related services, such as radiology, physical and occupational therapy, durable medical goods, employed non-surgical physicians and in-office procedures, can comprise a significant portion of the margin needed to support the compensation to physicians, expansion of the practice and maintenance of EMRs. Many private practice groups also have equity and ownership in the facilities used for their surgical services, thereby controlling almost all aspects of musculoskeletal care for their patients. This model has been successful and continues to support the continued expansion of larger orthopedic groups in the United States.

Employment options

The increasing demands and resources required to manage an orthopedic practice has led to more physicians to select employment positions, which currently represent 37% of full-time orthopedic surgeons in some form of employment. Some have suggested the primary driving force behind the increasing number of employed physicians is related to aggressive acquisition efforts of hospitals and health care systems. However, the most influential factors appear to be increasing overhead costs with decreasing reimbursement, challenges of leadership and administration, and lifestyle balance coveted by an increasing number of orthopedic surgeons.

The non-clinical real estate and investment practices of hospitals and health care systems beyond patient care responsibilities, which are further enhanced in many cases by non-profit tax status, provide the financial ability to acquire physicians, ancillary services, ASCs, additional hospitals and long-term care facilities so they vertically integrate all services and create volume-based savings and increased revenue. The few private practice orthopedic surgery groups that financially leverage their practices in a similar manner demonstrate continued growth and increased market share.

Outpatient surgical services

Another powerful event effecting orthopedics that will have a great impact in 2018 is not just the expansion of the range of musculoskeletal services, but the significant continued growth of outpatient surgical services. Improvements in minimally invasive surgical techniques, anesthesia and pain management and a growing desire of patients to recover at home has set the stage for high-quality care equal to what has been delivered in a hospital setting. The value for patients, physicians and third-party payers is undeniable.

PAGE BREAK

The federal government is realizing the value by removing total knee arthroplasty from the hospital inpatient-only list for CMS in 2018. Unfortunately, the government moves slowly, and is significantly influenced by those who have something to lose in the migration to the outpatient setting. The removal of TKA from the hospital inpatient-only list does not come with the approval of the procedure on the ambulatory surgery list, thereby relegating TKA to remain in a hospital setting for Medicare and Medicaid patients. Other arthroplasty and spine procedures are likely to be removed from the hospital inpatient only list soon. Ideally, the time will come when surgeons and patients will have the opportunity to choose the best location based on overall value and safety, thus providing the best care for the best price.

Continued debate

As we begin 2018, it is clear mergers, acquisitions and new partnerships in health care will be frequent news. Private practice groups and large health care systems will attempt to control the impact of future legislation and other demands from third-party payers, which will affect our ability to deliver high-quality care at reasonable costs. The battle for patients, geographic footprint, reimbursement and advanced EMR systems will be expensive all while the continued public debate remains about reducing health care costs.

Everything is lining up to make it more challenging to predict the future and to develop systems to provide high-quality care. Whether employed in a private practice or as part of a small group or a major health care system, orthopedic surgeons need to make every effort to be involved in the continued transformation of health care. By understanding the greatest forces in health care, one has an excellent opportunity to help shape the future delivery of musculoskeletal care.

Disclosure: Romeo reports he receives royalties, is on the speakers bureau and is a consultant for Arthrex; does contracted research for Arthrex and DJO Surgical; receives institutional grants from AANA and MLB; and receives institutional research support from Arthrex, Ossur, Smith & Nephew, ConMed Linvatec, Athletico and Miomed.