At the 11th Annual Orthopedic, Spine & Pain Management-Driven ASC Conference in Chicago on June 13, a roundtable of ambulatory surgery center industry experts discussed emerging business issues in spine surgery. The roundtable included orthopedic spine surgeon with Laser Spine Institute Stefan Prada, MD; Steven Weinshel, MD, of Aurora BayCare Medical Center; Chief Medical Officer at Access MediQuip Steven Arnold, MD; and President and CEO of Analytics Jeffrey Mason. The panel was moderated by Scott Becker, a partner at McGuireWoods.
1. Figure out how to lower implant costs. Lowering costs is one of the main goals of the Affordable Care Act, and surgeons are looking for the best way to manage the cost of implants while still providing the highest possible quality of care. Access MediQuip has launched a national level three registry for implants to provide information about manufacturer pricing, hospital costs and distribution arrangements.
"Some facilities can use implants as a profit center, which is to the advantage of a patient and employer," said Dr. Arnold. "It's pretty cost-effective to do surgeries in the surgery center, especially one that isn't owned by the hospital."
2. Investment in an ambulatory surgery center vs. hospital employment. While the national trend for physicians is hospital employment, orthopedic and spine surgeons still remain independent in many markets across the country. Surgeons are either forming large practices for negotiating power or considering ambulatory surgery center investments for ancillary income.
"We were lucky because when other practices were being bought up by hospitals, there were surgeons in our community who didn't want to be part of that group," said Dr. Weinshel. "We also owned part of a hospital. We retained our independence and were lucky to be the only neurological group in town. Big cities have a lot more competition."
When surgeons are in a larger, diverse group, there is more ability to create the infrastructure necessary for success.
3. Hospital partnership opportunities. Without becoming employed by the hospital, physicians and physician groups are able partner on certain aspects of providing care to build a relationship and realize extra compensation. For example, consider taking call coverage for the hospital.
"We maintained dominance by being a good group and operating at any hospital that wanted us," said Dr. Weinshel. "One hospital hired neurological surgeons to compete against us, but they didn't take call or work as hard as we did. We previously covered trauma, and their employed surgeons stopped taking trauma call. The hospital eventually took us back for trauma coverage and paid appropriately."
4. Increasing patient volume. It can be difficult to find new patients, especially if the referring physicians become employed by hospitals. You can target patients directly through marketing efforts or create an infrastructure for medical tourism.
"One of the keys is implementing the right business model to stay independent," said Dr. Prada. "People are looking at outcomes and patient satisfaction. We have a patient coordinator who works with our patients coming in from out of state. The coordinator helps patients throughout their trip from travel arrangements to arriving at the facility. They help transport medications to your hotel. You can be successful if you put the patient's needs first."
Laser Spine Institute also works with patients, many of whom are out-of-network, to achieve reimbursement from insurance companies. "Our business volume is doing well and we continue to expand nationally and internationally," said Dr. Prada. "You are rewarded for performance and patient satisfaction is paramount."
5. Pay for performance. Government payers and insurance companies are increasingly relying on pay-for-performance reimbursement models for surgeons and facilities. In this model, it's smarter to steer patients out of the in-patient facility with high infection rates, so more surgeons are now interested in outpatient spine opportunities.
"Payers will reward physicians who do their cases in the outpatient setting," said Dr. Arnold. "However, hospitals will do what it takes to keep business in the hospitals until someone won't pay for it anymore."
Physician compensation formulas are always a sensitive topic and MGMA studies show more payment is based on quality and efficiency requirements than every before.
"For hospital employment, the smart thing is to keep a significant productivity-based component in the formula, keep efficiency metrics and have a majority of the compensation based on production," said Mr. Mason. "We're on basically a fee-for-service kind of system where we are incented to do more. As we transition into pay systems contemplated by healthcare reform, we may become capitated with contracts. We have to figure out how to best provide lowest cost of care for good outcomes."
6. Compensation trends. While there is still a place for surgeons who want to be independent, it's more difficult for surgeons who work hard to receive appropriate compensation. There may be some unintended consequences of pay for performance that could impact patient care and a physician's business.
"It's easy to game the system because surgeons can choose which patients they are going to see based on MRI showing disc herniation or degenerative conditions," said Dr. Weinshel. "Persons who already have degenerative diseases won't be happy no matter what care they receive."
Such patients may face longer wait times and declining reimbursement means fewer surgeons will be incentivized to take on patients who traditionally score lower on satisfaction.
7. Health insurance exchanges. The consequences of health insurance exchanges are unknown, but if people flood the system surgeons should expect lower rates for their patients. Younger and healthier people are expected to support the needs of the growing older population.
"If they drop out of health insurance exchanges, then there is no one who will be able to fund the older population," said Dr. Arnold. "The younger people are saying they don't want to join until they get sick. We built a pay-for-performance program that included severe illness waits so that physicians still benefit with sicker patients."
Mr. Mason said in some areas, providers are collecting just 11 cents on the dollar for Medicaid services and 14 cents on the dollar for Medicare. "This is unsustainable," he said. "You can't do business that way long term."
8. Hire mid-level providers. In the future, surgeons will rely more on mid-level providers to see patients and deliver services at their capability while surgeons focus more on surgical candidates.
"You have to start looking at ancillary assistance because you can't have physicians doing all the work for their level of pay," said Dr. Arnold. "Bring in the physician extenders at salaries that are accessible. Start looking at innovative things like bundling payments and bringing care out of hospitals into safer surgery centers."
Be sure to hire the right personnel for these positions who can provide a positive patient experience.
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