Published 3/1/2014
Peter Pollack

How Much Do Orthopaedists Spend?

Study examines overall annual expenditures, per physician

Given the increased scrutiny of medical costs by payers and government, researchers at the Vanderbilt Orthopaedic Institute Center for Health Policy attempted to identify spending patterns for orthopaedic surgeons across the United States. Their study—“Patterns of Costs and Spending Among Orthopedic Surgeons Across the United States: A National Survey”—was published online in The American Journal of Orthopedics. To learn more about the study and discuss how its data might be used, AAOS Now spoke with coauthor A. Alex Jahangir, MD, MMHC.

AAOS Now: What led you to this study topic?

Dr. Jahangir: My partners—Manish Sethi, MD, and Hassan Mir, MD—and I looked at the healthcare debate that’s been raging over the past several years and realized that, at the end of the day, most of the discussion comes down to value and cost. In 2012, total U.S. healthcare expenditures were $2.8 trillion, or almost 18 percent of the U.S. gross domestic product. A great many medical conditions have some orthopaedic implication, and so we thought it was important to ask, “How much do the services we provide as orthopaedic surgeons cost the healthcare system and what is our contribution to total healthcare expenditures?”

Clearly, just because a healthcare expenditure has occurred doesn’t necessarily make it incorrect. But understanding the orthopaedic portion of overall healthcare spending can help us lead the dialog with policymakers as we examine healthcare values and the contributions of orthopaedics.

AAOS Now: Attempting to quantify the spending of all orthopaedic surgeons in the U.S. seems like a daunting task. How did you collect your data?

Dr. Jahangir: We sent 2,000 surveys to randomly selected orthopaedic surgeons from across the country. We tried to cover the entire spectrum of practice types—private practice, academic, military, health maintenance organizations (HMO)—and to address different orthopaedic specialties.

The survey opened with a series of basic demographic questions, and then expanded into eight areas of orthopaedic care. We asked, “How many radiographs do you order each month? How many computed tomography scans? How many magnetic resonance imaging studies? We also asked about ultrasound studies, specialty referrals or consultations, laboratory tests, biopsies/aspirations, and hospital admissions.

Then we estimated the cost component using Medicare data. Obviously, different payment systems are in place based on payer and geographic location, but using a nationalized average of Medicare cost information gave us a basis for standardization across the country.

We had 1,214 people respond to the survey, for a 61 percent response, which is an excellent response rate. We were very happy with the amount of data we collected.

AAOS Now: What did you find?

Dr. Jahangir: We estimated the average monthly expenditure of orthopaedists across the country to be $33,436 per physician, or a little over $400,000 per year. Based on AAOS census data, there are about 20,400 practicing orthopaedic surgeons. Multiplied out, that gives us about $8.2 billion a year in healthcare expenditures, just from orthopaedists.

AAOS Now: Did that total surprise you?

Dr. Jahangir: It was pretty surprising, to be honest. When we broke the data down further, the study does show that private practitioners in general cost the system a little bit more, but they also do more. If you look at 2012 AAOS census data, you’ll notice that orthopaedists in a group private practice average about 36 procedures a month, whereas those in HMOs average about 27 procedures per month.

Geographically, the expenditures for orthopaedic care tended to be higher in the Northeast and a little lower in the West. Part of that may reflect how people receive care in those regions: for example, the Northeast has fewer preferred provider organizations and HMOs than the West.

AAOS Now: Could you address any limitations of your study?

Dr. Jahangir: First of all, although we had an excellent response rate, we only surveyed
6 percent of practicing orthopaedic surgeons. There could be some selection bias: maybe somebody didn’t want to reply, or somebody felt very strongly about something, and we have to trust that the information we received is accurate. However, our results are very much in line with a previously published paper by the Massachusetts Medical Society as well as the AAOS census. So although we always need to be aware of the potential for recall bias, in comparing our study to several others, our data seem to be in line with practice habits.

We also used average Medicare payment data, and some expenditures can be higher or lower based on payer and geography. However, we believe the Medicare data serves as a nice, reproducible metric.

AAOS Now: How would you expect orthopaedic surgeons to use your findings?

Dr. Jahangir: I think the big takeaway is that we as orthopaedic surgeons need to understand our proportion of overall healthcare expenditures. The fundamental goal of the Affordable Care Act and other regulations is to improve value. If value is defined as quality over cost, by maintaining quality and reducing costs, we add value to the system.

Once we have the information, we can be the leaders when policymakers start talking about value in orthopaedics. As orthopaedic surgeons, we are on the front lines of providing musculoskeletal care. If we understand how much things cost and recognize that what we do has an impact on societal and healthcare costs, we can serve as leaders in the value dialog. So maybe I don’t need to order that next radiograph, or there’s something else that I can control that increases the value of my profession. And who better than us—the people who actually provide the care—to make those decisions?

Dr. Jahangir’s coauthors include: Vasanth Sathiyakumar, BA; Hassan R. Mir, MD; William T. Obremskey, MD, MPH, MMHC; Young M. Lee, BSPH; Rachel V. Thakore, BS; and Manish K. Sethi, MD.

Disclosure information: Dr. Jahangir—Springer, Orthopaedic Trauma Association (OTA). Dr. Mir—Smith & Nephew, OTA, Journal of Orthopaedic Trauma, Journal of the AAOS, The Journal of Bone & Joint Surgery, AAOS Diversity Advisory Board, Orthopaedic Trauma Association Public Relations Committee, Foundation of Orthopaedic Trauma Nominating and Membership Committees. Dr. Obremskey—OTA. Dr. Sethi—AAOS Now. Mr. Lee, Mr. Sathiyakumar, Ms. Thakore—no conflicts.

Peter Pollack is electronic content specialist for AAOS Now. He can be reached at ppollack@aaos.org

Additional Information
American Journal of Orthopaedics

Patterns of Costs and Spending Among Orthopedic Surgeons Across the United States: A National Survey