Dr. Stephen Hochschuler: 6 Points on Healthcare Spending for Spine and Orthopedics

Written by Laura Dyrda | May 23, 2011 | Print  | Email
Stephen Hochschuler, MD, co-founder of Texas Back Institute and former president of the Spine Arthroplasty Society, discusses the biggest concerns of physicians in the wake of healthcare reform.

1. Lowering the high cost of implants and devices. Over the past decade, the physician's income has decreased by 30 percent while medical device companies have experienced a 154 percent increase in revenue, according to Dr. Hochschuler. "The device representatives are making more money than most of the physicians they are serving," he says. "Between 8 percent and 32 percent of the cost of these expensive implants go to the salesman or the distributor."

To combat these costs, he suggests purchasing just-in-time inventory over the Internet. Companies can also use online communication technology, such as Skype, to consult with surgeons about problems in the OR, thus eliminating the need for a representative presence in the room during surgery. "One of the cuts in the cost of healthcare will be getting a new, modern distribution in healthcare," says Dr. Hochschuler. "If the surgeon has a problem in the OR, there's Skype or other free communication tools that will help surgeons solve the problem right there."

2. Disarray of the FDA.
The Food and Drug Administration has been unpredictable in the recent past as to which medical devices will or won't be approved, and this is adding extra stress to orthopedic and spine device companies' research and development. New regulations focus attention on whether additional technology will improve the standard of care, and unless the technology can produce better results than what is already available on the market, it runs the risk of being denied. Companies are also forced to conduct their own trials for each device seeking approval instead of citing previous studies of similar devices, which was common practice in the past.

All of these new regulations are making it difficult for orthopedic and spine device companies and physician entrepreneurs to advance medical technology, which now includes robotic and biologic solutions. "President Obama says one of the best things we have is BioScience in the market, but on the other hand development is being crippled because the rules and regulations in the FDA aren't straightened out," says Dr. Hochschuler. "The biologic sciences have really been stymied."

New development doesn't always come out of large companies, says Dr. Hochschuler, but often begins with small operations willing to take on the risk of something new. If the risk pans out and the technology is proven successful, the large companies will form ownership or distribution agreements for the intellectual property. The uncertainty surrounding the FDA approval process will most likely make this practice more common in the future. "By 2012, depending on the tax code people with money will put it in seed deals," he says. "The large companies don't want your technology unless you have FDA approval, as well as CMS coverage."

3. Managing healthcare entitlement programs.
A large portion of the healthcare spending in this country goes toward entitlement programs such as Medicare and Medicaid to serve the elderly and uninsured populations. CMS has been unpredictable about which procedures will receive a CPT code for reimbursement, and those that do receive codes are experiencing a decline in reimbursement value. "We cannot go on with the 16-18 percent of gross domestic product that is associated with medical care," says Dr. Hochschuler. "We need to balance the budget and make some tough decisions. You really need to do means testing and raise the age limit on Medicare, as well as change the whole bases of these services because it's bankrupting the country."

In some recent pilot programs for healthcare reform, Medicare and Medicaid reforms aren't addressed. This inattention is worrisome to many orthopedic and spine surgeons because CMS is often one of their large payors, and sets the standard for private insurance companies around the country. Currently, if physicians charge $100 for a procedure, they might consider reimbursement of $30-$40 a good deal.

4. Patient control over healthcare spending.
If patients had full control over their own healthcare dollars, there would be competitive shopping among orthopedic and spine surgeons and providers. These patients would want to find the best surgeon who could bring them the best care in the best location for the most affordable price. Right now, this isn't necessarily the case, and bureaucrats are increasingly taking over healthcare decisions. "The amount of money spent in the last year of a patient's life is absurd," says Dr. Hochschuler. "The people who should be making decisions are the physicians, not the bureaucrats."

5. Physician advocacy.
While most physicians agree that physicians should have input on healthcare reform policy and changes, many are not willing to spend the time and capital necessary to advocate for their position. "There are so many changes that happen and surgeons don't get together," says Dr. Hochschuler. "When Texas work comp was changing, we tried to organize physicians in Texas to contribute financially to our cause and only 18 contributed. That tells you physicians are their own worst enemy."

Physicians need to take a proactive approach to advocating for their interests by working with local and national politicians who can influence legislation change. Physicians can also become active in professional medical organizations, which often spearhead efforts in Washington, as well as contribute financially to campaigns supporting their interests.

For example, if the government had decided to provide a tax deduction for physicians, healthcare reform may have been prevented, says Dr. Hochschuler. He suggests physicians and hospitals, whether they are for-profit or not-for-profit, receive a tax break on the bills for treating patients without insurance or those who lack the ability to cover the cost of their care.

6. Taking advantage of telemedicine.
Telemedicine will also become increasingly important as surgeons and providers look for the most economically sound methods for delivering care. Patients who live in rural areas or suburbs will be able to consult with their physicians or healthcare professionals over the Internet instead of traveling long distances to the office. These channels of communication will also be helpful when patients are experiencing symptoms and wondering whether a visit to the hospital is necessary, or if simple change in their routine will do.

Learn more about Dr. Stephen Hochschuler.

Related Articles on Orthopedic and Spine Costs:

6 Points on Managing the Cost of Spine Care
The Year Ahead: 9 Biggest Issues for Orthopedic Surgeons in 2011

5 Points on Lowering the Cost of Spinal Fusion Care

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