As reimbursement models and insurance policies evolve, spine surgeons are thinking about how to optimize the financial operations of their practices.
Ask Spine Surgeons is a weekly series of questions posed to spine surgeons around the country about clinical, business and policy issues affecting spine care. Becker's invites all spine surgeon and specialist responses.
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Please send responses to Carly Behm at cbehm@beckershealthcare.com by 5 p.m. CST Wednesday, August 28.
Editor's note: Responses were lightly edited for clarity and length.
Question: How are changes in reimbursement models and insurance policies affecting the financial viability of spine practices today?
Rachel Bratescu, MD. George Washington University (Washington, D.C.): Changes in reimbursement models and insurance policies are certainly affecting the types of practices that surgeons are considering. The model of pure private practice is becoming less common, being largely driven by its known financial challenges, including inflation, rising costs (i.e. overhead and staffing), and declining reimbursements. Medicare reimbursement for spine procedures has been steadily decreasing over the last 15 to 20 years, which is relevant in the context of our growing aging population. If these trends in reimbursement continue, fewer surgeons may choose to accept these patients, all while the demand for care is projected to increase.
In this context, some private practices are turning to alternative sources of income, such as ancillaries or leaning on private equity. The questions of both sustainability and maintenance of autonomy have been raised with the introduction of outside investors and it will take time to see how this plays out for smaller private practices and non-hospital employed surgeons.
Brian Gantwerker, MD. The Craniospinal Center of Los Angeles: Spine practices remain viable so long as there is a path outside of current payer policies. It has become evident, based on the over 70% employment rate of physicians, that physician reimbursements are not driving the cost of care. In other words, when a payer raises their premiums, it is not for the increased cost of care they so loudly protest. Even with them losing over 75% of the IDR portal decisions in favor of the physicians, and now calling foul that they actually have to pay for care rendered, they still post billions of dollars in profits. Hospital systems are also driving up the cost of care with vertical integration and rampant consolidation. There is, however, a niche for spine practices to survive and thrive outside of this battle of the Gargantuas. After all, who will the two of them blame for high healthcare costs when there is just them? I would certainly like to grab some popcorn for that one.
Vladimir Sinkov, MD. Sinkov Spine (Las Vegas): The reimbursement for physician services has been either decreasing or not keeping up with inflation. The insurances are also coming up with more models that shift the financial risk to physicians or patients. All of this negatively impacts the financial stability and viability of spine practices. As a result, it drives more spine surgeons to consolidate into larger practices or become employed by a large organization (such as a hospital system or an insurance company) that could absorb such risk. Consolidation will lead to less competition, less access to care and higher prices.
Vijay Yanamadala, MD. Hartford (Conn.) HealthCare: The prior authorization process has become more and more arduous. We can clearly see a difference in the pre-COVID vs. post-COVID era in terms of the number of denials we are getting for similar procedures. Unfortunately, the prior authorization process is not achieving its purpose — preventing unnecessary interventions. Instead, it is simply creating more and more difficult barriers even for patients who urgently need surgery. We need to work together to ultimately come up with a better process that truly gets every patient the right care that they need.
Christian Zimmerman, MD. St. Alphonsus Medical Group and SAHS Neuroscience Institute (Boise, Idaho): It is a well acknowledged fact that nearly all health systems and hospitals have 50% of their inpatient days paid for by Medicare and Medicaid, and that reliance on this number forebode solvency and survivability. Because of the fixed nature of these payments, hospitals are unable to fully absorb the tremendous inflationary forces the healthcare system is currently facing. As a significant number of complex spinal procedures depend on inpatient recovery methods, financials and dwindling reimbursements remain omnipresent and the past expectations of non-negotiables dawdle. Larger health systems compulsorily care for the more informed and disadvantaged, making prospective viabilities and investiture more difficult and almost impossible as more physician ownership dot the landscape and minimally contribute to commonality and populace.