Published 12/1/2011
Mary Ann Porucznik

Healthcare reform isn’t the only challenge facing orthopaedics

BOC/BOS focus on issues ranging from bundled payments to workforce adequacy

“The orthopaedist must be the leader, not only in direct patient care but in the orchestration and design of care delivery,” Kevin P. Black, MD, told the members of the AAOS Board of Councilors (BOC) and Board of Specialty Societies (BOS) who gathered in Seattle, Oct. 27–30, 2011, for the AAOS Fall Meeting.

Dr. Black, a member of the AAOS Board of Directors and chair of the department of orthopaedics and rehabilitation at the Penn State College of Medicine and Hershey Medical Center, was one of 25 speakers who addressed the group on a wide range of topics over the course of two days. The eight symposia not only gave the audience food for thought, they also provided concrete steps that orthopaedists could take in addressing an uncertain future overshadowed by economic instability and new models of care delivery and payment.

Trend watching
Moderator Michael Connair, MD, a member of the BOC executive committee who is in private practice in Connecticut, opened the first session by reviewing the current situation, in particular the issues surrounding the Medicare Physician Fee for Service schedule and antitrust legislation.

According to Dr. Connair, Medicare’s shift from paying “usual and customary” fees to the Sustainable Growth Rate formula set the stage for the insurance industry to match lower government payments, resulting in a heavier burden on physicians. Antitrust legislation hampered physician efforts to negotiate with insurers and even the current antitrust relief bill (HR 1409) doesn’t allow physicians to negotiate Medicare rates.

John Nordt III, MD, of Florida, reviewed payments trends compared to general economic trends. He noted that 97 percent of orthopaedic surgeons treat Medicare patients and that Medicare payments make up a significant portion of income for orthopaedic practices. Inflationary trends during the period 1992–2010, however, have meant that, in real dollars, orthopaedic surgeons are receiving considerably less today than they did 20 years ago (Fig. 1).

For example, although the consumer price index rose 53.21 percent during that period, the average real dollars received by orthopaedic surgeons for select procedures fell by 57.51 percent. Private practice orthopaedic surgeons have been able to survive by expanding the services they provide and changing their payer mix, but healthcare reform and the increasing shift to employed physician models is threatening their continued existence.

According to Barbara Cataletto, MBA, CPC, and CEO of The Business of Spine, LLC, physicians should reclaim their rightful place in health care—as physicians, not “providers.” She pointed to the impact of for-profit insurers, which continue to experience significant growth in earning and net income, while physicians are barely breaking even.

She noted the increasing costs of doing business, including staffing costs, overhead, medical liability premiums, and technology issues. She said that as insurance companies deny or delay payments, physicians lose money. Additionally, the current trend toward high-deductible health plans, which are seen as a way to make consumers more responsible purchasers of health care, may in fact keep patients from going for care they need.

“In my opinion, for-profit medicine is the problem,” said Ms. Cataletto. “For-profit medicine pays its shareholders first and everyone else second. I believe regulation is needed so that stockholders do not make profits off of our health.”

She encouraged the use of fairhealthus.org, a website that provides healthcare reimbursement data for consumers, insurers, healthcare providers, researchers, analysts, and policymakers. Physicians can use the site to determine what would be an appropriate, fair-market value payment for a procedure and use that figure when negotiating contracts with carriers.

Is innovation the answer?
According to moderator David Halsey, MD, the American Association of Hip and Knee Surgeons’ health policy representative to the BOS, the Centers for Medicare & Medicaid Services (CMS) reported that, left unchecked, healthcare costs will rise to 19.3 percent—almost one-fifth of the nation’s gross domestic product—by 2019. At the same time, research and anecdotal reports continue to identify gaps and inequities in the quality of healthcare delivered in the United States.

Dr. Halsey explained that accountable care organizations (ACOs) are not the same as health maintenance organizations. He reviewed the following critical components of the ACO model:

  • People-centered health homes that deliver primary care and coordinate with other providers as patients move across the delivery system.
  • New approaches to primary, specialty, and hospital care to reward care coordination, efficiency, and productivity.
  • Tightly integrated relationships with specialists, ancillary providers, and hospitals so that they are similarly focused and aligned on achieving high-value outcomes.
  • Provider/payer partnerships and reimbursement models that reward improved outcomes and promote value over volume.
  • Population health information infrastructure, including health information exchanges, to enable care coordination across a designated population.

He noted, however, that the barriers to establishing ACOs include the fact that they are expensive, risky, and complicated and must conform to restrictive regulations.

According to Courtland Lewis, MD, director, research & quality at the Connecticut Joint Replacement Institute (CJRI), a bundled payment plan for primary total hip and total knee arthroplasty must have the five essential elements: a chief executive officer who “gets it”; surgeons willing to “get it”; trust and transparency; savvy legal counsel; and clean data. Other considerations include a mature service line, adequate case volume, medical leadership, and robust quality and cost systems.

The CJRI “Step Ahead” program, he explained, is a bundled payment plan designed to reduce costs per case, enhance operations, improve quality and outcomes, and increase patient satisfaction. Critical cost data necessary to develop the plan include the hospital’s cost per case, the surgeon’s cost for the service, the anesthesia cost for the service, and the cost per case for readmissions. Clear definitions of who is involved, what each person’s duties are, what the “bundle” includes, and the time frame are needed. Determining a “fair market value” for the services should be based on the time and resources required, the warranty provided to the patient or purchaser, the financial risk assumed by the group, and current “market” reimbursement rates.

Kate Eresian Chenok, of the Pacific Business Group on Health and the California Joint Replacement Registry, presented the purchaser’s view, pointing out that employers are orthopaedists’ biggest customers. Purchasers are implementing a variety of programs that affect benefit design, payment, consumer engagement, and outcomes measurement to improve value.

According to Ms. Chenok, employers want improved health outcomes at sustainable costs (accountability and transparency), an infrastructure that supports continuous improvement (registries, electronic health records, and evidence-based medicine), and a system that engages patients (shared decision making and patient-reported outcome measures).

But who will do it?
Anticipating whether there will be enough orthopaedic surgeons to meet the musculoskeletal care needs of an aging population is challenging; different approaches have resulted in different conclusions. The need for physicians from various racial and ethnic groups who can serve those populations is also increasing, and some areas of medicine are doing a better job than others in attracting a diverse workforce.

According to AAOS Second Vice-President Joshua J. Jacobs, MD, a RAND study commissioned in 1995 was a departure from the usual method of determining workforce adequacy based on population. Using data from the AAOS orthopaedic census and the National Center for Health Statistics, the study estimated that the nation would have 4,000 more orthopaedic surgeons than needed in 2010. A Lewin Group study of indicators of a physician surplus, however, found that several indicators were not being reached.

By 2005, AAOS project teams were identifying possible workforce shortages, based on an analysis of physician numbers compared to the growing numbers of patients as “baby boomers” reached an age where orthopaedic care is more likely to be needed. But the following year, a Dartmouth study concluded that the focus should not be on how many physicians, but on what they do.

Although the AAOS has a long history of studying the orthopaedic workforce and has a unique and valuable database regarding the “supply side,” noted Dr. Jacobs, determining the “demand side” can be complex, tricky, and, depending on the model and assumptions, result in misleading conclusions. He called for continued surveillance, combined with improved modeling and population health data, to support more informed policy decisions

One way to “stretch” the physician workforce is to use nonphysician support staff. David Teuscher, MD, BOC chair, presented some “workforce alternatives,” including the establishment of a “musculoskeletal home” that would enable orthopaedic surgeons to spend more time in the operating room while other medical professionals handled nonsurgical treatment, chronic condition treatment, imaging, referral decisions, and rehabilitation.

He also outlined how providers, such as physician assistants, advanced practice nurses, physical therapists, and athletic trainers, could support an orthopaedic (nonsurgical) physician with specific musculoskeletal training.

Returning to the podium, Dr. Black reviewed other considerations, including the competency of nonorthopaedic providers, education funding, degree of and growth in specialization within orthopaedics, health disparities, hospital hiring, and curriculum issues. Federal funding for graduate medical education, he noted, is being threatened, which could have an impact on how medical professionals are educated. Healthcare disparities among racial and ethnic groups, particularly in the utilization of total hip and total knee arthroplasty and the management of metabolic bone disease, continue to be an issue.

Orthopaedic surgery lags behind several other specialties in the number of women and minorities, despite the fact that the number of women and minorities attending medical school is increasing. Addressing the future musculoskeletal needs of our society will not be easy.

“We need more orthopaedists,” Dr. Black concluded, “and we must accelerate our efforts to increase diversity in our workforce.”

Mary Ann Porucznik is managing editor of AAOS Now. She can be reached at porucznik@aaos.org

Editor’s note: The AAOS Fall Meeting, a gathering of members of the AAOS Board of Councilors and Board of Specialty Societies, was held Oct. 27–30, 2011, in Seattle. In addition to business meetings, during which officers were elected and changes to AAOS Bylaws, Resolutions, and Standards of Professionalism were considered, the Fall Meeting also featured open hearings, open microphone sessions, a “Peformance Improvement Module” workshop, educational sessions for participants in the Leadership Fellows Program, and eight symposia focusing on a variety of topics. This is the first of two reports on the meeting.