Orthopedic surgeons have never been in higher demand. Hospitals are recruiting aggressively. Patients are waiting longer for care. Workforce shortages continue to grow.
In most industries, those conditions would create more leverage for the people providing the service.
However, Alex Vaccaro, MD, PhD, president of Philadelphia-based Rothman Orthopaedics, believes healthcare has moved in the opposite direction.
“In every other industry, when supply goes down and demand goes up, prices rise,” Dr. Vaccaro said June 13 at Becker’s 23rd Annual Spine, Orthopedic and Pain Management-Driven ASC + The Future of Spine Conference in Chicago. “In medicine, the exact opposite happens.”
After four decades in orthopedic surgery, Dr. Vaccaro has become accustomed to contradictions. He has watched physician shortages worsen while reimbursement declined. He has seen hospitals grow larger while becoming less efficient. He has watched technology improve while administrative burdens multiply.
Taken individually, each trend appears disconnected. Together, he believes they point to a healthcare system operating under a different set of rules than almost every other industry.
“Healthcare economics is screwed up,” Dr. Vaccaro said. “That’s why we need Congress to start focusing on medicine.”
The comments came during a wide-ranging discussion that touched on ASCs, physician employment, private equity, malpractice reform and the future of orthopedic practice.
While the topics varied, they all pointed back to the same question: How did medicine become an industry where so many of the normal rules no longer apply?
Why surgery is leaving the hospital
Few developments illustrate that reality better than the migration of orthopedic procedures into ASCs. The trend is often discussed in terms of cost. For surgeons, Dr. Vaccaro said, the appeal is frequently operational.
“When I’m at my university hospital, we have something called [post-anesthesia care unit] delays,” he said. “The recovery room is too full, so they have to delay taking the patient out of my operating room until the PACU is relieved.”
The consequences are familiar to many surgeons. Cases run behind schedule. Operating rooms sit idle between procedures. Efficiency suffers. At an ASC, he said, the experience can be dramatically different.
“You start at 6:30 in the morning. Turnover times are 15 minutes. You’ve got the team there. The mental duress is gone.”
The shift presents a challenge for hospitals. The same procedures that are increasingly attractive to patients and surgeons are often among the procedures hospitals depend on financially.
“When you say something like that out loud, hospital systems start getting short of breath,” Dr. Vaccaro said.
Why physician shortages aren’t creating physician leverage
Another contradiction frustrates him even more. Across the country, health systems continue competing aggressively for orthopedic surgeons. Recruitment packages remain substantial. Demand continues to rise. Yet physician reimbursement faces persistent pressure.
“When there’s a shortage of supply, what does that usually mean to prices?” Dr. Vaccaro asked. “They go up. But in medicine, the exact opposite happens.”
To him, the issue extends beyond compensation. It raises questions about the long-term sustainability of the workforce itself. The healthcare system needs more physicians. Patients need greater access to care. Yet the financial and administrative pressures associated with practicing medicine continue to grow. The result is a dynamic unlike almost any other labor market.
The private equity question
Private equity has become one of the defining trends in physician practice management over the last decade. Dr. Vaccaro is skeptical that the current model can continue indefinitely. “I think that model is going to fail because there’s not much profit to take from medicine,” he said.
His concern is rooted in arithmetic. Most physician practices already face shrinking margins as labor expenses rise, reimbursement declines and operational costs increase. Adding another stakeholder seeking significant financial returns can create tension over time. “We’re being compressed. There’s no money,” he said. According to Dr. Vaccaro, the challenges often become more apparent several years after a transaction closes.
“The first year everybody’s high-fiving themselves,” he said. “The second year they’re still pretty happy. The third year they’re getting a little concerned. The fourth year they’re really nervous.”
He does not believe private investment will disappear from healthcare. But he questions whether current expectations align with the economic realities many physician organizations face.
The issue Washington won’t touch
Of all the topics discussed, none generated stronger comments than medical liability.
“I just wish a political party would get in the game of medical malpractice reform,” Dr. Vaccaro said. “It is so ridiculous.” He described a legal environment that increasingly influences physician behavior, healthcare costs and access to care.
In some regions, he said, liability concerns have become impossible to separate from the practice of medicine itself. The issue rarely receives the same attention as reimbursement or workforce shortages, yet Dr. Vaccaro believes it exerts enormous influence on how physicians practice and how healthcare resources are allocated.
For him, it represents another example of a structural challenge that policymakers have largely avoided.
The question that will shape medicine’s future
Despite his concerns, Dr. Vaccaro remains optimistic about medicine itself. Technology continues to improve. Innovation continues to accelerate. Clinical outcomes continue to advance. What concerns him is not the science. It is the system surrounding it.
“Everyone deserves healthcare,” he said. “Everyone deserves care.” The question, he believes, is whether the structures responsible for delivering that care are evolving in ways that support patients, physicians and long-term sustainability.
After decades leading one of the nation’s largest orthopedic organizations, Dr. Vaccaro has become convinced that the future of healthcare will be shaped less by the next implant, robot or surgical breakthrough than by the economic decisions being made around medicine today.
Because before healthcare can solve many of its clinical challenges, he argues, it may first need to solve the contradictions built into the system itself.
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.
