There are a number of misconceptions when it comes to reimbursements in the orthopedic space, including surgeons’ actual take-home pay and the way that it is determined.
According to surgeons in the field, a large majority of what is on a hospital bill goes to the facility, not the surgeon, and the current reimbursement amounts are not enough to run a successful practice without a high volume of patients.
These two orthopedic surgeons recently connected with Becker’s to discuss the biggest misconceptions related to reimbursements.
Editor’s note: Responses have been lightly edited for clarity and length.
Question: What is the biggest misconception surrounding orthopedic reimbursement?
Pablo Castañeda, MD. Orthopedic Surgeon at Texas Children’s Hospital (The Woodlands): When people look at the cost of orthopedic surgery, they often assume that the surgeon is the one taking home the large sums listed on a hospital bill. That assumption is wrong, and it drives much of the frustration and misunderstanding about physician reimbursement.
In reality, the professional fee paid to an orthopedic surgeon is only a fraction of the total charge for a surgical episode. The lion’s share goes to the facility: the hospital or ambulatory surgery center, where operating room time, implants, anesthesia and overhead account for the majority of spending. Surgeon fees, by contrast, have not only remained relatively modest, but in many cases have actually declined when adjusted for inflation.
Medicare data show that professional fees for common orthopedic procedures, hip and knee replacements, for example, have dropped by more than 40% to 50% over the past two decades. Meanwhile, facility fees have steadily risen, widening the gap between what the public perceives and what surgeons actually receive. To make matters worse, the Medicare conversion factor, which determines how much each unit of physician work is worth, has been repeatedly cut, even as practice costs and administrative burdens increase.
Another overlooked fact is that surgical fees are bundled into a “global period.”” That means a single payment covers the preoperative visit, the surgery itself, weeks of postoperative care, follow-up visits, suture removal and management of complications included. What patients experience as months of contact is, in reality, already accounted for in the one professional fee.
The biggest misconception, then, is not that orthopedic surgeons are well compensated relative to many other professions, they are, but that they are the primary drivers of high healthcare costs. They are not. The rising expense of musculoskeletal care is largely structural, tied to facilities, devices and administration, not to the surgeon’s paycheck.
Brett Shore, MD. Orthopedic Surgeon of Shore Hip and Joint (Marina Del Ray, Calif.): The biggest misconceptions surrounding orthopedic reimbursement are that: No. 1, they are determined in a fair or equitable manner, No. 2, they are determined based on insight into the skill required to perform the procedures themselves and No. 3, that they are sufficient to run a successful orthopedic practice without relying on high patient volume and therefore limited interaction between the surgeon and the patient.
