The question used to be almost automatic. Do you take my insurance?
Shobhit Minhas, MD, orthopedic hand surgeon and partner at Geneva, Ill.-based Fox Valley Orthopedics, is hearing a different one more often. What will this cost if I pay you directly?
The patients asking are not necessarily uninsured. Many carry employer-sponsored plans and pay thousands of dollars in annual premiums. They may also have deductibles so high that, when an injury occurs, they expect to finance much of the care themselves.
So they begin shopping. They compare surgeons, read reviews and ask for one clear price covering the entire episode. They calculate whether paying through a health savings account or using a financing plan would be simpler than entering an insurance process whose final cost may remain unclear until long after the operation.
“When I first started, the focus was, ‘Is this physician in my network?'” Dr. Minhas told Becker’s. “Now, I think what they’re asking is, ‘Who is the best provider at the most affordable cost?'”
Insurance is not disappearing. Most orthopedic care still passes through traditional health plans. But the assumption that an insurer will always be the principal buyer of care is beginning to weaken.
Patients are paying providers directly. Employers are assuming greater financial responsibility for workers’ medical claims and steering them toward selected surgeons. Orthopedic practices are packaging the physician, facility, anesthesia and postoperative care into one price.
The market developing alongside insurance remains small, but it could carry major consequences for orthopedic practices under growing reimbursement pressure. It also forces the industry to answer a question insurance contracts have often obscured: What does an operation actually cost?
Insured, but paying directly
Dr. Minhas began noticing a meaningful increase in self-pay patients about two or three years ago. This year, he said, the rise has been more pronounced.
The underlying math is becoming difficult for patients to ignore. Families may spend heavily on premiums and still face deductibles reaching several thousand dollars before insurance contributes significantly to a procedure. Some patients are deciding to reserve money specifically for healthcare and compare direct-pay options when an injury occurs.
“They’ve started to realize that they’re paying out of pocket anyway,” Dr. Minhas said. Technology has made that comparison easier. Patients can identify surgeons, review their reputations and search for prices before entering an office.
They are approaching orthopedic care more like another major household purchase. That does not mean they view medicine as interchangeable. Patients are still weighing expertise, trust and outcomes. But price has become visible enough to influence the decision.
Turning an operation into one price
A practice cannot serve direct-pay patients simply by accepting a credit card. It must be able to explain what the patient is buying. Fox Valley Orthopedics has developed packages for specific injuries and procedures, including wrist fractures. Surgical bundles can include the surgeon, facility, anesthesia and 90 days of postoperative care.
For a carpal tunnel release, Dr. Minhas said the all-inclusive self-pay price is about $3,000. Traditional billing divides those services among different organizations. Patients may receive separate statements from the surgeon, ASC and anesthesia group, often without knowing the total amount in advance.
The direct-pay model replaces those fragments with one figure. Fox Valley has also partnered with HealthMe, a platform that publishes self-pay packages and allows patients to finance larger expenses. The patient makes payments over time, while the practice receives the agreed price for the episode.
That structure matters for urgent orthopedic conditions. A patient with a fracture may not have time to compare options for several weeks or save the full cost of surgery. Transparent financing allows the practice to present a defined pathway quickly.
The simplicity itself becomes part of the value. The patient knows what the episode includes, how much it will cost and how the payment will be handled before care begins.
The price must survive the episode
Creating that package requires the practice to determine a price that is attractive to the patient without turning the case into a financial loss. Orthopedic episodes vary. Implants, operating time and postoperative needs are not identical. A seemingly routine procedure may become more complicated than expected.
Fox Valley examined prices offered by other providers and direct-pay organizations when developing its own rates. Its partnership with HealthMe also gives the group visibility into prices elsewhere in the market. Dr. Minhas expects competition to eventually push some prices lower.
“As more and more patients start potentially breaking away from the payer, I think providers that see self-pay patients will start undercutting each other,” he said.
That could reward practices that control costs and perform efficiently in ASCs. It also means groups will need to understand the real expense of delivering an episode. A price chosen primarily for marketing may generate volume without sustainable margins.
In the traditional model, payer contracts largely determined what a service was worth. Under direct payment, the practice has to make that calculation itself.
Employers want predictability
Individual patients are only one part of the shift. Employers are also becoming more active purchasers of orthopedic care.
Many large companies self-fund their health benefits, meaning they assume the financial risk for workers’ claims rather than paying an insurer to bear it. Insurers or third-party administrators may still process claims, manage networks and provide other services.
But the employer’s own money ultimately pays for the care. That changes what the company wants from an orthopedic provider.
“What employers are looking for is predictable costs and the fastest return to work,” Dr. Minhas said. An orthopedic episode affects more than the medical claim. A worker unable to walk, lift, type or use an injured hand may be absent for weeks. Delayed treatment can increase disability costs and reduce productivity.
Employers therefore have an incentive to identify surgeons and facilities capable of producing reliable outcomes for a known price. Some are working through companies such as Lantern, which connects employees with selected providers under direct arrangements.
Fox Valley participates in Lantern’s network. Dr. Minhas has treated patients traveling from Minnesota, Iowa, Indiana and elsewhere through the program.
The employer is no longer relying entirely on a broad insurance network. It is steering the employee toward a specific orthopedic episode.
Why orthopedics is an early target
Musculoskeletal care is particularly well suited to direct purchasing. Many services are discrete enough to package. A company can more readily establish a price for a carpal tunnel release, fracture repair or joint replacement than for years of treatment for an unpredictable chronic condition.
Orthopedic outcomes also affect an employee’s ability to work in immediate and visible ways.
“If you can’t walk or you can’t function, you’re not able to work,” Dr. Minhas said. That gives employers a reason to look beyond the least expensive operation. They want the patient treated promptly and returned safely to work. A low initial price can become costly if the employee experiences a complication, prolonged recovery or another surgery.
For practices, that creates a different value proposition. The group is not merely negotiating a reimbursement rate with an insurance company. It is demonstrating that its surgeons, facilities and recovery processes can produce a predictable result across the episode.
As more employers take responsibility for medical spending, Dr. Minhas expects orthopedics to receive increasing attention. Musculoskeletal care is too costly, and too closely connected to workforce productivity, for companies to leave every purchasing decision to an insurer.
A new path for independent practices
The trend is emerging as orthopedic practices confront a difficult financial environment. Labor, technology and supply expenses are rising. Medicare reimbursement remains under pressure, and commercial payers frequently follow public payment trends.
Dr. Minhas said his practice generally earns better margins from self-pay and direct employer arrangements than from conventional payer contracts. He believes those alternatives could help independent groups remain viable.
“The current model, with just seeing third-party insurance patients, is not sustainable,” he said. Independent practices carry the cost of authorizations, billing teams, denials and contract negotiations directly. Larger systems can distribute that administrative burden across broader organizations and may have access to hospital-based revenue.
Direct payment removes some of that uncertainty. The price is established before treatment. The practice knows what it will receive, and payment does not depend on a prolonged claims process. The group still assumes responsibility for setting the price correctly and coordinating every component of the package. But it gains greater control over the transaction.
For an independent practice, that control may become as important as the reimbursement itself.
Insurance remains, but loses exclusivity
Dr. Minhas is careful not to describe the trend as the collapse of health insurance. Patients still need protection from catastrophic expenses. Employers still depend on insurers and administrators for claims processing, networks and risk management.
The more likely future is a hybrid market. Patients may maintain insurance while paying directly for selected procedures. Employers may use a national insurer to administer benefits while carving orthopedic surgery out to a specialized network. Practices may continue signing payer contracts while also publishing cash prices and negotiating directly with companies.
Dr. Minhas wonders whether insurers could eventually respond with more catastrophic-style products: lower premiums combined with greater direct spending on scheduled care.
That remains speculative. What is already changing is the patient’s behavior. People facing substantial out-of-pocket exposure are no longer assuming the insurance pathway is automatically the most affordable or convenient one. Employers paying their own claims are no longer assuming insurers should make every purchasing decision for them. Orthopedic practices are learning that the payer contract is not the only way to reach either group.
The buyer in the exam room
The direct-pay market remains far smaller than the conventional insurance system. Not every patient has sufficient savings or an HSA. Not every employer offers a specialized surgical network. Many people lack the time or medical knowledge to compare surgeons confidently.
But the shift does not need to replace insurance to reshape orthopedics. It only needs to give patients and employers credible alternatives.
A patient enters the office asking for a complete price. An employer wants an operation with a predictable cost and recovery. A practice decides whether it can provide both while sustaining the care.
Those conversations were always present in healthcare. Insurance kept them largely separated. Now they are beginning to occur together. The next orthopedic market will not be controlled entirely by insurers, employers or individual patients. It will contain all three.
The practices positioned to succeed will recognize that the person carrying the insurance card may no longer view the insurer as the purchaser. Increasingly, the buyer is sitting in the exam room.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.