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The ACA focuses on reforming the private health insurance market by mandating universal health insurance coverage and providing better coverage for those with pre-existing conditions. It also improves prescription drug coverage under Medicare. These steps are anticipated to extend the life of the Medicare trust fund by at least 12 years. In addition, the ACA initiated several pilot and demonstration projects that change how providers are financially rewarded and penalized.


Published 8/1/2011
John Cherf, MD, MPH, MBA

Navigating a changing healthcare environment

Expect transformational change and financial compression

On March 23, 2010, President Obama signed into law one of the most comprehensive healthcare reform bills ever enacted, The Patient Protection and Affordable Care Act. This legislation was followed by the Health Care and Education Reconciliation Act of 2010 (signed into law on March 30, 2010). Together, these two bills make up the healthcare reform of 2010 that is referred to as the Affordable Care Act (ACA)—the most transformational legislative change to our healthcare system since the Social Security Act of 1965.

John Cherf, MD, MPH, MBA

Many of the provisions of the ACA legislation have been previously reviewed in AAOS Now. (See “The impact of healthcare reform on orthopaedic surgeons,” AAOS Now, September 2010.) This article focuses on the impact of the ACA on orthopaedic enterprises and provides guidance on preparing for the future.

Professional challenges
Orthopaedic providers will need to address several professional challenges as a result of legislative pressure while simultaneously operating under significant fiscal uncertainty. The new provider demands will occur in the face of increased operating costs, large capital demands, and eroding reimbursement. As much as I would like to deny that this is our future reality, it would be naïve to ignore the facts.

The AAOS and its Practice Management Committee are working diligently to provide both resources and advocacy that address these changes. The upcoming practice management course (AAOS Practice Forward: Managing your Practice in an Era of Health Care Transformation, Sept. 23–24) is designed to provide attendees with a comprehensive review of several key drivers of change and help them better understand future demands on orthopaedic providers.

According to a recent survey by the Medical Group Management Association (MGMA), the top five challenges of running a medical practice include the following:

  • Preparing for reimbursement models that place a greater share of financial risk on the practice
  • Participating in the Centers for Medicare & Medicaid Services (CMS) Electronic Health Record (EHR) Meaningful Use incentive program
  • Dealing with rising operating costs and an uncertain medical legal climate
  • Selecting and implementing a new EHR system
  • Implementing and/or optimizing an accountable care organization

Orthopaedic impact
Independent of practice size, design, or affiliation, AAOS fellows are on the front line of evolving changes in health care. In 2009, national healthcare expenditures reached $2.5 trillion, more than 16 percent of the national gross domestic product. Musculoskeletal health care accounts for approximately 13 percent of total healthcare spending—about $325 billion annually. The scale of this spending puts orthopaedics in the crosshairs of nearly all utilization and cost-containing initiatives.

Many innovative strategies for improving health care will be drafted by physicians, including orthopaedic surgeons. An enormous opportunity exists for providers who capitalize on operational efficiency, service innovations, and patient centric care strategies to improve the current healthcare system. Enterprises that efficiently extract waste, reduce costs, and improve quality may be handsomely rewarded. Those who don’t change may be punished financially.

This year’s practice management course will serve as a fertile incubator for ideas and solutions to many of the challenges orthopaedic surgeons face as healthcare providers during a period of transformation.

John Cherf, MD, MPH, MBA, is the course director for “AAOS Practice Forward: Managing your Practice in an Era of Health Care Transformation.” He can be reached at

Editor’s Note: The AAOS practice management course, “AAOS Practice Forward: Managing your Practice in an Era of Health Care Transformation,” is designed to update physician and practice executives on major trends in health care. John Cherf, MD, MPH, MBA, course director, shares his views on what healthcare reform means for orthopaedic providers and the importance of this year’s course in the new healthcare landscape.

Facts on Practice Forward
The 6th annual practice management course, Practice Forward: Managing your Practice in an Era of Health Care Transformation, will be held Sept. 23–24, 2011, at the Doubletree Hotel Chicago Magnificent Mile.

Faculty members include a speaker from the recently established CMS Center of Innovation; a physician leader from the national Blue Cross Blue Shield Association; executives from health systems; legal, accounting, healthcare consulting, and regulatory experts; and orthopaedic surgeons. Six key topics will be covered: orthopaedic economics and the economy, new payment models, orthopaedic workforce analysis, clinical and financial integration, information technology adoption, and orthopaedic marketing.

Designed for clinical providers such as orthopaedic surgeons, physician assistants, nurse practitioners, therapists, and trainers, the course also includes valuable information for practice managers and administrative leaders of orthopaedic and musculoskeletal care provider facilities, including directors and service line managers.

AAOS fellows are encouraged to invite ambulatory surgery center and hospital administrators; creating a collaborative spirit is important for better management and the delivery of more efficient, coordinated care of musculoskeletal patients. For more information, visit