Spine practices are being squeezed by a widening gap between what it costs to deliver care and what they are paid to provide it.
Declining reimbursement is only part of the equation. Spine leaders point to rising staffing and technology costs, increasingly complex prior authorization requirements and payment delays as pressures that are eroding margins and, in some cases, making traditional private practice difficult to sustain.
Here are five forces eating into spine practice margins:
1. Reimbursement isn’t keeping pace with costs: For many spine practices, rising operating costs are colliding with years of reimbursement pressure. Inflation-adjusted Medicare physician payment has fallen 33% since 2001, while expenses including staffing, rent, malpractice coverage, supplies and technology continue to climb.
Brandon Hirsch, MD, orthopedic spine surgeon at DISC Sports and Spine Center in Newport Beach, Calif., told Becker’s the widening gap is making independence increasingly difficult.
“Staff wages, rent, malpractice premiums and supply costs rise with inflation while physician payments decline, creating an increasingly unsustainable environment for independent practices,” he said. Commercial reimbursement does not necessarily provide an escape. Dr. Hirsch said independent physicians have little negotiating leverage with major insurers and that contracts can be closely tied to Medicare rates.
The pressure is particularly acute for expensive procedures. Spine leaders have said reimbursement for revision surgery, deformity surgery and multilevel fusions is failing to keep pace with implant, operating room and hospital resource costs.
2. Prior authorization consumes resources without generating revenue: Prior authorization is becoming more than a clinical frustration. For some practices, it is a significant uncompensated operating expense.
Alex Vaccaro, MD, PhD, president of Philadelphia-based Rothman Orthopaedics, called prior authorization the “single largest uncompensated administrative burden on a musculoskeletal practice.”
The cost extends across dedicated staff, physician and physician assistant time for peer-to-peer reviews, delayed operative schedules and longer accounts receivable.
Practices have responded by building entire workflows around the process. Rothman, for example, centralized authorization work by payer, incorporated medical-necessity criteria into its EMR templates and tracks denials by payer, CPT code and indication.
The administrative burden has become increasingly complex as insurers require more granular documentation for spine procedures, including procedure levels, implants and evidence of conservative treatment.
3. Getting authorization does not guarantee getting paid: Practices can incur another cost after navigating prior authorization: collecting the money they are owed.
Michael Rohan Jr., DO, an orthopedic spine surgeon at OrthoEdge in Jacksonville, Fla., told Becker’s aggressive surgical denials are having the largest financial effect on his practice.
“Obtaining prior authorization is difficult enough, but even when approved, payment is not guaranteed, and even disbursed funds can be taken back retrospectively,” he said.
The combination of denials, delayed payment and potential clawbacks means practices can devote staff and physician resources to getting a procedure approved, perform the surgery and still face uncertainty over whether the revenue will ultimately remain with the practice. That dynamic adds another layer of risk to a payer environment in which surgeons say increasingly rigid coverage policies and authorization requirements are affecting access to care.
4. Overhead can overwhelm strong physician production: Revenue alone does not guarantee an independent practice is financially sustainable.
Quentin Durward, MD, a neurosurgeon at The Center for Neurosciences, Orthopaedics & Spine in Dakota Dunes, S.D., said his production remained healthy and generated more than $800,000 in annual receipts, but his share of fixed- and variable-practice overhead increasingly ate into that revenue. Eventually, he said, private practice neurosurgery became “financially untenable.”
He transitioned from private practice to employment by his group, which he said substantially reduced the financial burden while allowing him to continue practicing.
Other spine surgeons have described the same fundamental problem: the mismatch between fixed overhead and declining per-case contribution margins. The broader economics have contributed to practices closing, consolidating or moving toward employment. At least 23 physician practices closed in 2025, with additional closures and consolidation continuing into 2026.
5. Technology raises the stakes on capital spending: Spine programs are also confronting a difficult question: Which expensive technologies actually generate enough clinical and financial value to justify their cost?
Philip Louie, MD, spine surgeon and medical director of research and academics at Virginia Mason Franciscan Health in Seattle, said many enabling technologies come with significant price tags, while health systems often lack a consistent framework for determining which investments are worthwhile.
The decision is becoming more consequential as shrinking orthopedic margins force programs to scrutinize technology investments. Dr. Louie said the challenge is compounded by the different priorities of surgeons, administrators, payers and patients. His team has been developing an Enabling Technology Value Index designed to make those competing priorities explicit before a purchase is made.
Technology expenses can also put pressure on staffing elsewhere. Dr. Louie said research coordinators, education staff, outreach coordinators and data personnel can be among the first positions questioned when margins tighten because their work does not directly produce a revenue line.
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.
