What Impact Does the Economic Downturn Have on Spine Practices? 6 Spine Surgeons Respond


Six spine surgeons discuss how the economic downturn has impacted their practices over the past few years. If you would like to include your response in this discussion, please contact Laura at lmiller@beckershealthcare.com.

Ara Deukmedjian, MD, Founder, Deuk Spine Institute, Melbourne, Fla.:
In a spine practice, revenue is directly related to quantity and quality of patient encounters. Surgical and interventional procedures pay more and help offset the losses that office visits (E & M codes) incur for the practice. We have seen yearly reductions in reimbursement for standard spine surgical and interventional procedures by payors. This is primarily due to new spine bundling edits imposed by payors looking to reduce costs. For example during a procedure both codes XXXXX and YYYYY are performed together. If the surgeon or interventionalist received $1,000 for code XXXXX and an additional $1,000 for code YYYYY last year during a specific spine surgery, this year the insurer will bundle codes XXXXX and YYYYY into a NEW code ZZZZZ which pays $1,200. Hence, we receive $800 less every time we perform the procedure this year and going forward. We are no longer able to use XXXXX and YYYYY but are required to use ZZZZZ paying 40 percent less.

These unwarranted bundling edits are usually done for the most common spinal surgeries and since they are so heavily weighted in our collections they have a dramatic impact on overall practice revenue. The bundling is essentially a unilateral "take it or leave it" action by the insurers under the guise of "reducing healthcare expenditures" and supposedly with the cooperation of the AMA and specialty societies; however, these bundling changes occur across all specialties and have been occurring for years without any apparent benefit to the purchasers of health insurance in the form of reduced premiums, deductibles, copays or co-insurance costs. The only stakeholders benefiting are the insurers and their stockholders, certainly not the patients paying the premiums or physicians struggling to survive in private practice with declining payments.

A second major change that has occurred in the last few years is a massive increase in the rate of denials by health insurers for commonly performed spinal procedures that were never denied for the past 20 years and suddenly they are being labeled by insurers (and a handful of "misled" physicians) as "not medically necessary" or "experimental" or "unproven." Physicians and patients both are very familiar with health insurers ongoing practice of denying coverage for a multitude of prescribed medications and testing labeled by insurers as "not medically necessary"; however, denial for surgery or interventional procedures on the spine is new and indicates a new era of seeming limitless power the insurers have in denying medical care for the sole purpose of reaping in bigger profits.

Of note, insurers are frequently refusing to pay for spine surgery or interventional pain management claiming that the patients only need therapy and psychological counseling to treat their debilitating back and neck pain (that didn't go away with therapy before); however, there are substantial annual limits on the number of physical therapy visits allowed in a beneficiaries plan imposed by the insurers and it is never enough to cover the cost of all of the necessary treatment when patients suffer from chronic spinal pain. Insurers usually cover only 21 therapy visits a year (therapy is usually 3 times per week) which equates to seven weeks of treatment for a condition that lasts 52 weeks a year. Patients are expected to pay for any required treatment over the allowable per year out of pocket which is difficult to do in a bad economy with high unemployment.

These two major shifts in reimbursement for spine care, reduced payments for services and reduced procedures due to denial of coverage by the insurer, compounded by less disposable income in Americans pockets to pay for escalating individual healthcare costs as a result of the transfer of financial risk from the insurer to the patient, ultimately mean fewer patients will seek the medical care they desperately need and will continue to suffer in pain, miss work, abuse pain killers, have interpersonal relationship difficulties, experience chronic pain related anxiety and depression and a number will only find relief with suicide.

I believe spine practices will see reduced revenue because many patients cannot afford to pay out of pocket for necessary spine care that is not covered by their health insurer and the option of suffering is more affordable to them. High quality specialty care is very expensive to provide and overhead for spine practices is on the rise year after year. The saddest truth here is that we are now able to cure back and neck pain but not without the support of the health insurance industry. Over the last 10 years insurers have successfully mitigated their risk with respect to paying for treatment of chronic back and neck pain by denying or severely restricting coverage of medically necessary (but costly) care of patients suffering with curable conditions, effectively transferring the full cost of treatment to the patient. The vast majority of chronic back and neck pain sufferers are curable with the appropriate care that is diagnosis driven and inevitably requires multi modality treatments including therapy, interventional pain management, chiropractic and occasionally surgery.

The economic downturn will be especially problematic for the millions of Americans suffering with back and neck pain that are under insured (common, insurer refuses to pay the bill to fix their neck or back problem with treatment recommended by their doctor) because their health insurer has been empowered (lobbying, lawmakers) to decide what is" medically necessary" in their care. The idea of a profit driven insurance company in charge of making decisions about what is medically necessary care for you is extremely concerning to me ( less care = more profits). A patient's personal doctor is that patient's greatest advocate for health and the decision to proceed with reasonable treatment should always rest with a well informed patient, not an insurance company. Doctors, not insurance companies, take the "Hippocratic Oath" upon graduating medical school. We are bound by its code to always act in the best interest of our patients.

J. Brian Gill, MD, Spine Surgeon, Nebraska Spine Center, Omaha:
The recent economic downturn has impacted my spine practice in that patients are holding off on elective procedures as they are unable to miss work or be out of work for any extended time. They fear that doing so will result in them losing their job. Moreover, many patients are electing to have a higher insurance deductible to offset premium increases. This further hampers their ability to pay for care if an injury occurs or spine symptoms develop. At the beginning of each year for the past couple of years, I have noticed the volume of patients to slow down mainly due to the deductible that resets each year. It is taking longer for patients to meet this deductible. Also, I have more patients "shopping" procedures among various providers to see if one place is less expensive than another or if discounts are offered.

Don Johnson, MD, Medical Director, The Southeastern Spine Institute, Mt. Pleasant, S.C.:
It hasn't particularly affected our practice directly, at least not through decreasing the number of patients or decreasing insurance benefits. We haven't seen an impact on the number of patients coming in with employers that dropped their benefits. Perhaps we are insulated because of our geographic location. What has impacted our revenue directly and indirectly has been the time we spend interfacing with insurance companies on approval for surgery. This has become more difficult over the past 12 to 24 months.

In the past, when we had to speak with insurance companies about approval it took time and we lost efficiency, but previously almost 100 percent of the time you would eventually gain approval for the procedure you proposed. We are getting more denials now than ever before and there are times when we don't see approval. Much of the difficulties for us comes from the guidelines set forth by BlueCross BlueShield of North Carolina, even though we are in South Carolina.

The other issue has been guidelines from United, which has become fairly rigorous in terms of what they will pay for with devices and biologic procedures. We are seeing more contentions and more denials, which takes time and impacts revenue at our practice.

Richard Kube, MD, Founder & CEO, Prairie Spine and Pain Institute, Peoria, Ill.: We opened our door at Prairie Spine & Pain Institute February 9, 2009. That was a few months after the bottom fell out of the market. That obviously was not the best time to open a solo spine practice but plans were too far along to change course. Since then I have a few observations regarding patient flow. First, is that there was an initial reluctance for folks to have elective surgery. They were worried about cost and they were worried about being off work and potentially losing their jobs. That sentiment has continued to some degree to the present time although those feelings are not as strong as in the past. Also we are seeing folks that just can't postpone surgery any longer, and they are electing to proceed. With that has come a volume of patients researching minimally invasive spine surgery and looking for less invasive approaches to help them get back and recover sooner. I believe our marketing niche of less invasive, quicker recovery and superior outcomes has lead large numbers of patients to us because the hard economic landscape has forced patients to be consumers and take a larger role in the process. We are and have been growing at a steady pace since we opened our doors about 3 years ago, and have almost doubled our new patient volume annually since we opened to where we now see about 100 new patients a month for a solo spine practice.

Kenneth Pettine, MD, Co-Founder, The Spine Institute, Loveland, Colo.: None at all. Insurance authorizations have become much more onerous. That has been the biggest challenge.

Texas Back Institute:
In 2008 and 2009, we saw a decrease in revenue in the early months of the year but increases in the later months of the year.  As insurance carriers pushed more and more of the burden on to the patient through higher deductibles, patients struggled to meet their obligations for their care.  Many patients postponed care until they had no choice.  Now, patients seem to better understand that their financial burden will be greater and seem to plan for this.  We do not see the same fluctuations in surgical activity as a result of high deductibles as we did several years ago. This same increase in patient responsibility garners higher customer service expectations from our patients. We have created programs and processes that measure and evaluate patient satisfaction. We have implemented customer service programs each year over the past four years to raise our level of service within all areas of the practice.  

The downturn in the economy has not hurt our revenues; matter of fact, we have had double digit growth for the past several years. It has forced us to find new ways to attract patients and new ways to insure a positive experience for each of our patients. Individuals continue to have back issues and patients are much more proactive in their care than they have been in the past. We just have to be responsive to their needs for education and service. We have also reevaluated some of our managed care strategies in response to payor rates. Currently, the issue is centered more around understanding the carriers medical policies and making sure that we comply or address their concerns proactively.

More Articles on Spine Surgery:

6 Spine Surgeons on How Young Surgeons Can Position Themselves for Success

7 Spine Surgeons & Industry Experts on Forming a Positive Relationship With Local Hospitals

What Percentage of Spine Surgery Could be Performed in ASCs? 7 Surgeons Respond

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Webinars

Featured Whitepapers