Five spine surgeons discuss consolidation among physician practices and whether this is a positive trend for the spine industry or a negative one.
Ask Spine Surgeons is a weekly series of questions posed to spine surgeons around the country about clinical, business and policy issues affecting spine care. We invite all spine surgeon and specialist responses. Next week's question: If you could change one law regulating the spine industry, which would it be and why?
Please send responses to Anuja Vaidya at avaidya@beckershealthcare.com by Wednesday, Nov. 26, at 5 p.m. CST.
Question: How do you think consolidation of physician practices will affect the spine industry?
Kern Singh, MD, Co-Director, Minimally Invasive Spine Institute, Rush University Medical Center, Chicago: Clearly the days of the surgeon championing a particular brand or device are becoming more limited. As physician practices are consolidated and/or acquired by hospital/healthcare systems their interests become different.
Oftentimes, these employed physicians have a hospital-physician profit-sharing that dissuades them from advocating for new, more expensive technology. As a result, with profit margins decreasing on commodity products spinal manufacturers are less inclined to re-invest money in novel products in which profitability may be limited and penetration into healthcare environments may be non-existent.
Christian G. Zimmerman, MD, MBA, Saint Alphonsus Medical Group, SAHS Neuroscience Institute: Irrespective of the oxymoronic Patient Protection and Affordable Care Act and its fiscal ineptitudes, the CMS 'impetus' and precedent has been set for continued shaving of reimbursements. Unfortunately, our brethren in other specialties are first wave veterans of theses measures and many see equipment consignment and technological assist falling victim as well.
Practice consolidation or exclusion, is the working model for provider employment and hospital corporate intellect as a five-year plan. For those who qualify within a set of national standards — i.e. Crimson Systems — patient steerage and volume retention will be directed. Hospitals will survive.
Brian R. Gantwerker, MD, The Craniospinal Center of Los Angeles: I think the market drives toward consolidation and unfortunately, it will decrease the drive to innovate. One has to understand who is driving the consolidation — hospital systems and universities that are interested in quality benchmarks, cost containment and uniformity of service.
Cost-cutting measures will likely force consolidation in the industry, which we have already seen. There will be a tipping point, I think, that will push toward three or four large companies vying for market share and probably making nearly equivalent hardware. There will be maybe a few niche companies, but I think it will be difficult for them to be viable.
Richard A. Kube II, MD, CEO, Founder, Prairie Spine & Pain Institute, Peoria, Ill.: Consolidation eventually leads to monopoly. Any movement that decreases competition or consolidates thought into a smaller number of groups does nothing to stimulate innovation or promote value. Ultimately market forces will allow a model of that type to drive value down in the form of lesser service at same or higher cost. Medicine will succumb to the same market forces and end results as any other business industry.
Gowriharan "Ty" Thaiyananthan, Founder of BASIC, Newport Beach, Calif.: Consolidation of physician practices is prelude to the formation of accountable care organizations. The emphasis is going to be on minimizing healthcare utilization to curb costs while meeting an ever increasing bar for the quality of care that is delivered. Costs and outcomes will be the metrics that these consolidated physician practices are graded by.
The emphasis is going to be on less costly treatment modalities that yield results. The economics of this change will probably drive changes in the industry towards more ultra minimally invasive techniques that preserve motion and minimize hospital lengths of stay and treatment related co-morbidities.
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