Seven months after opening his spine practice, Vladimir Sinkov, MD, spoke to Becker's about payer challenges, outpatient migration and how robotics will become more prominent at surgery centers.
Question: Securing insurance contracts was a big challenge for you when establishing your practice last year. How have you handled commercial payer negotiations in recent months?
Dr. Vladimir Sinkov: We've secured quite a few insurance contracts, but we had to turn down contracts from some of the biggest players in Las Vegas. The rates some payers offered us were substantially below Medicare rates to the point that it would have been totally unsustainable. Every time I'd see a patient with such insurance, we would lose money. Blue Cross Blue Shield was probably the biggest offender in this. We actually had to turn down that contract and be out of network. If a patient with Blue Cross insurance wants to see me, they either need to pay cash or do out-of-network billing. We had to pick and choose which contracts we signed to ensure we can be financially solvent. Because we have chosen our contracts carefully and expanded our self-pay business, we have already been posting a little bit of profit in the first seven months since we've been open.
Many medical practices are struggling right now, and a lot of them are going out of business. At the same time, health insurance companies are posting their biggest profit margins in years because everyone is still paying their premiums, but a lot of elective care is not being provided due to the pandemic. A lot of insurance companies are not even trying to reimburse the excess premiums to their patients or pay physicians adequately for what they are doing.
Q: What are the other big issues affecting your practice right now?
VS: At the moment, surgical volumes are down because people are afraid of having surgeries due to the surge in COVID-19 and hospitals are canceling elective cases. This makes it less likely for patients to even start the process because the last thing you want to do is go through all your preop testing and preparation — which is also costly — only to have the surgery canceled the day before. That drives down the patient's desire to even start the process. The other issue is reimbursement. Will private payers follow CMS by decreasing their reimbursement or will they keep them the same? There is a significant lack of clarity about how things are going to go in the first half of this year.
Q: Are there any strategies you plan to implement to offset drops in Medicare compensation?
VS: For now, we're waiting to see what happens. There was legislation introduced to mitigate Medicare cuts. Politics and the administration is in complete chaos right now, so we're not sure how that has progressed. My strategy is to transition away from insurance and toward a more direct financial relationship with the patient, where they pay cash for the care. We're looking into a direct payment model that primary care physicians are developing, but trying to translate that into specialty services as well. That will essentially allow the market to dictate the price, not the government.
Q: What sort of competition do you expect from hospitals as outpatient spine surgery becomes more widely adopted?
VS: Hospitals have been expecting this trend to come for a while. What is interesting is how it has slowed down innovation. For example, I approached a hospital in Las Vegas about purchasing a robot to perform minimally invasive spine surgery and increase volume at that hospital. But they expect to lose so many elective spine surgery cases over the next five years to ASCs and expect very little cases to be done in the hospital, so they didn't want to invest in the technology. That's somewhat of a defeatist attitude that I've seen some hospitals take.
Other hospitals are investing in surgery centers so they can secure some profit from the partnership. Hospitals still have a lot of capital they can invest, where surgery centers are typically starved of capital, which is why it makes sense to partner. In my opinion, outpatient migration of spine surgery will encourage surgery centers to rent or purchase surgical robots and other advanced technology to drive that exodus even faster.
Obviously, there are a lot of bigger spine surgery cases that would be fairly difficult to do in a surgery center, so I don't think we'll ever completely move away from doing spine surgery in the hospital. If you operate on a 70-year-old patient with a lot of comorbidities, that would be fairly high risk to do in a surgery center. With minimally invasive techniques you can safely do it in the hospital and monitor the patient for a couple of days before discharge.
Q: What are your practice goals for 2021?
VS: Had it not been for the pandemic, we would probably be looking at expansion through hiring more personnel to handle higher volume. With the pandemic, we have good volume, but not high enough for me to justify expansion by hiring a physician assistant or other staff. At this point, with all the variables, it's difficult to say if we'll be able to achieve that by the end of 2021. As volume increases, we obviously need more staff to handle that volume. However, the challenge with being a small, concierge practice that focuses on high-quality care is hiring the right personnel. For the two employees we have now, we went through 300 applications. We are extremely selective to make sure we secure the ideal candidates. The process of expanding will be just as meticulous.
Another big focus of mine is taking cases to a surgery center for many reasons, including lower costs, higher quality, and better patient satisfaction. Now, with hospitals at capacity with nonsurgical cases, I think it's good for the overall healthcare system to take as many elective cases as we safely can to surgery centers.