Payment cuts could push orthopedic surgeons back toward private practice, according to Andrew Lovewell, CEO of Columbia (Mo.) Orthopaedic Group, who spoke Oct. 30 at Becker’s 32nd Annual Meeting: The Business and Operations of ASCs in Chicago.
“Our easiest target to pick off from a private orthopedic group is an employed orthopedic surgeon today,” he said. “There is no aligned incentive in the hospital for these guys.”
Employed surgeons will take a bigger pay cut than private practice surgeons when Medicare’s proposed cuts to total joint work relative value units, or RVUs, take effect, he said,
“That is hard to believe, but it is factually true,” he said.
The final 2027 physician fee schedule, released Nov. 4, cuts work RVUs for total hip and total knee replacements 12.6%, to 16.70 from 19.11. CMS had proposed a cut closer to 20%. With a 2.31% drop in the conversion factor, surgeons’ work payment for the procedures falls about 15%, from roughly $638 to $545 before geographic adjustment.
Employed surgeons paid a set rate per work RVU lose 12.6% of their credit for each case. Independent surgeons take the full professional fee cut, but those with ASC ownership also collect facility fees. Medicare ASC payments are estimated to rise 4% for total knee and 5% for total hip in 2027.
Fifty-four percent of orthopedic surgeons were in private practice, the second-highest rate among five specialties in a 2025 American Medical Association breakdown, behind ophthalmology at 70.4%. Across all specialties, 82% of U.S. physicians were employed by hospitals or corporate entities as of January 2026, up from 52% in 2018, according to a Physicians Advocacy Institute and Avalere report.
Private equity also moved into the specialty quickly. Only five of 68 orthopedic transactions from 2010 to 2019 were private equity-backed, but 11 private equity-backed platforms launched between 2019 and 2021. Since 2022, activity has shifted toward recapitalizations and add-ons.
Mr. Lovewell expects the pendulum to swing back to independence within the next decade. He said hospitals have long used orthopedics to subsidize lower-paying specialties such as primary care, “and they’re going to get punished.”
Columbia Orthopaedic Group surgeons staff the orthopedic service line at a local hospital, which recently said it would recruit its own surgeons.
“Go for it. Good luck,” Mr. Lovewell said. “We’ll still win, and they know it.”
During the panel, Jon Van Valkenburg, executive director of Upstate Orthopedics Ambulatory Surgery Center in East Syracuse, N.Y., agreed that the pendulum tends to swing back. He said the burden of running a practice is what drove many physicians out in the first place.
“Owning that business and operating that business has been taking more and more of their time as a physician,” he said.
He said a return to private practice depends on finding ways to let physicians stay physicians “instead of all these additional new and more and more burdens of being a business owner.”
Christian Pean, MD, an orthopedic trauma surgeon and executive director of AI and IT innovation in Duke University School of Medicine’s orthopaedic surgery department in Durham, N.C., said there’s a window over the next decade for independence. Physicians who use “leaner, efficient, AI-driven operations” to keep costs down could stay independent, he said.
“I haven’t seen that void filled yet,” Dr. Pean said. “And hospitals are going to try. So somebody has to figure that out quickly.”
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.
