About 10 years ago, I wrote an article for the AAOS Bulletin outlining how to “manage” managed care. The approach was simple—understand what was happening in the world of contracting and learn to manage the process before it managed us.
To be successful then, surgeons had to embrace the contracting system, even going so far as to undertake capitation contracts and become comfortable with financial risk assumption. Building a practice required marketing to attract contracts and control patient populations through a series of preferred provider arrangements.
But then the economic climate changed. Managed care companies, insurers, and the federal government (Medicare and Medicaid) quickly discovered they had to lower fees to control costs. Surgeons became adept at doing more procedures on fewer patients, hiring physician extenders (physician assistants) to see patients, and investing in passive income generators such as in-office magnetic resonance imaging, ambulatory surgery centers, and orthopaedic specialty hospitals. Lucrative consulting agreements could increase a surgeon’s income.
The rules have changed
Today’s economics have changed again. Although more than 80 percent of nonelderly adults are covered by employer-sponsored health care, plans are being redesigned to shift more of the financial burden to the patients with higher copayments and deductibles. More than 3.2 million people have health savings accounts (HSAs), up from just 1 million a year ago. With out-of-pocket costs for HSAs ranging from $1,050 to $5,450 per year, patients are starting to ask questions about the cost of services and the economic impact of therapeutic decisions.
Government-sponsored care is becoming a higher portion of the $1.8 trillion healthcare industry, with Medicare and Medicaid together making up the second-largest payer in the United States. Average U.S. healthcare spending exceeds $6,280 for every resident—$13,382 for every family. In 2004, Medicare spent $309 billion, Medicaid $290 billion, private insurance $644 billion, and consumers $557 billion.
With more than 40 million uninsured people in this country, there is a growing trend to alter state and federal government programs to provide “coverage” for these Americans. California is the latest state to consider a universal coverage program for all residents.
Adapt or die
Orthopaedic surgeons need to consider how to adapt to realities such as the push to adopt electronic medical records (EMRs). Although I can appreciate how EMRs may improve patient safety, I am unsure how they will benefit my practice in terms of return on investment. For example, the Kaiser EMR system has a price tag of more than $4 billion or $363,000 per participating physician.
Only time will tell exactly how well these systems function in a changing healthcare market. When I first entered practice more than 20 years ago, many surgeons in my area were just beginning to use a computer for billing purposes. Perhaps it will take another generation to fully incorporate EMRs into everyday practice.
Currently, my practice is evolving. Several years ago, I realized my best asset was my patient base. Most of my referrals came from patients talking to other patients and not from patients calling from a preferred provider list. With that knowledge, I decided to drop all my insurance contracts and take a patient-centered approach in my practice. I adjusted the daily schedule to allow for same-day emergency appointments. I accept credit cards and give patients a super bill to help them bill their own insurance. Although I still bill third-party payers for surgeries, I help my patients understand the copayment and deductible process.
In listening to my patients, I found they wanted three As—ability, affordability, and availability. I have a number of patients who cannot afford to pay their deductibles or have no insurance. I “give away” 10 percent to 15 percent of my care, but I do so at 100 percent of what I am worth. I have built my practice to take care of my patients, and I find that they want to take care of me. I have become a country doctor in the midst of the urban sprawl of Southern California.
The way to go
Many opportunities for improvement exist. With the trend toward higher deductibles and copayments, orthopaedic surgeons can help patients overcome these barriers to access our services. To an employed patient making twice the minimum wage (around $25,000 a year), having a $3,000 deductible is almost like being uninsured. Medical credit cards are just becoming available. Although they can charge high interest rates, they can also ensure access to needed care in an emergency.
A practice that works with patients on developing payment plans is usually rewarded by a huge dose of loyalty. Orthopaedic surgeons need to charge prices that are fair; we should not shy away when we are asked how much a procedure costs. We need to advocate for our patients who need outside exams or tests. When we do, we will be rewarded because they will advocate for us in our communities.
Finally, we need to improve how and what we teach medical students. Although there is much emphasis on teaching them sophisticated techniques, there is very little on how to manage patients. Patient-centered care is here and now. We just have to listen better to our patients, instead of to ourselves.
Thomas J. Grogan, MD, is a pediatric orthopaedist practicing in Santa Monica, Calif., and a member of the AAOS Practice Management Committee. He can be reached at email@example.com
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Genetics may affect hip replacement outcomes
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OA patients taking aspirin should avoid ibuprofen
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