7 Steps for Spine Surgeons to Avoid Commoditization

Written by Laura Dyrda | April 02, 2012 | Print  |
Our current reimbursement model assumes all physicians perform equal treatment with the same outcomes because payors reimburse at the same level regardless of the quality of care. However, as spine surgeons know, not every surgeon has the same level of experience or delivers the same quality of care.
"We have to get over the attitude that spine surgery is a commodity like everything else," says Khawar Siddique, MD, a fellowship-trained spine surgeon with Beverly Hills Spine Surgery in California. "Spine surgery isn't like corn or beans. The quality of the individual surgeon is important and varies from one surgeon to the next. Corn is the same no matter where it comes from; among spine surgeons, there is a huge difference."

The quality of a spine surgeon can be measured by complication rate, patient satisfaction and outcomes reports. Since the quality of spine surgery varies, the price paid for a procedure should also follow suit. Here, Dr. Siddique discusses seven steps for avoiding commoditization in your market and obtaining the payment level you deserve.

1. Emphasize the points of differentiation from competitors. The days of being a general neurosurgeon who performs both cranial and spine surgery are numbered as more fellowship-trained specialists enter the field. This is especially true for surgeons practicing in a competitive urban environment. You have to set yourself apart as an expert in spine, and offer better care than other spine-focused physicians in your market.

Additional points of differentiation could include:
•    Concierge services
•    Responsive and caring staff members
•    Rapid turnaround to patient questions
•    Newer technology

2. Show your surgical skills are different.
Payors such as Blue Cross, Blue Shield, United and Medicare calculate reimbursement based on the procedure performed, and not always on the quality of care. However, surgeons should seek better reimbursement if they can prove their quality is better. One of the ways to differentiate your practice from others is showing your surgical skills are more advanced.

"Emphasize the differentiation, such as different surgical skills if you do minimally invasive procedures, or the fact that you don't have residents or trainees performing the procedures," says Dr. Siddique. "It's important to train surgeons, but the outcome could be different if a surgeon with 10 years of practice performs the procedure as opposed to a second-year resident. One way we are different is that we don't have any residents. We are trying to show the patients that they'll get better care from us and that's why we charge more than other surgeons."

You can also persuade payors by proving your mortality and morbidity rates are better than the national averages, but you must maintain those rates. "You can't just increase prices and do the same procedures as before," says Dr. Siddique. "We emphasize quality over quantity. In our practice, we do fewer surgeries per year but charge more because we can achieve better patient outcomes and experiences."

Finally, if you have served as an instructor for spinal technique courses, market yourself as a "surgeon to surgeons," which further exemplifies your expertise.

3. Aggressively negotiate with insurance companies.
When going through negotiations with payors, make sure to hold your ground on your prices.

"The worse thing surgeons can do is undercut others by lowering their prices," says Dr. Siddique. "For example, if surgeon X goes to United and charges half as much as surgeon Y, they'll cut the rates for surgeon Y as well. Surgeons must be aggressive and not undercut each other. If you negotiate a bad contract, you have to work twice as hard for your income and the quality of your work will drop."

By going out-of-network, Dr. Siddique says surgeons can signal their outcomes have higher quality than others and demand a fair price. "You can't gouge patients or payors for the procedure, but you don't want to undercut others and lower prices either," he says. "If you are a surgeon from a small town without much competition, you must demand more from commercial payors because you have a position of leverage."

Spine surgeons can also become part of a group to leverage better negotiations with insurance companies. However, you must be part of a group in order to collectively bargain. "Surgeons are prohibited from joining unions, so if you are not part of a group you can't collude with other surgeons about the price for procedures," says Dr. Siddique. "However, if you are in a group all under the same tax ID, you can negotiate for better deals with insurance companies."

4. Emphasize quality over quantity.
Lower reimbursements are forcing many surgeons to focus on performing more cases to cover expenses, which leaves less time to focus on each individual case and patient. The lower reimbursements and higher case volumes can lead to poor quality outcomes and less satisfied patients. Instead of following this path, Dr. Siddique proposes cutting the case load but spending more time with patients and charging more per case, which emphasizes quality over quantity.

"If you cut your case load from 400 to 200 cases and charge twice as much, your gross income is the same at the end of the day but you are emphasizing quality over quantity," Dr. Siddique says. "Some may say that charging more would increase healthcare costs, but most of the costs associate with spine surgery are hospital costs. Seventy percent of the bill is from the hospital and 30 percent goes to the surgeon. If surgeons reduce the number of cases they are doing, they are taking fewer cases into the hospital and lowering the overall cost of care."

When surgeons are focused on quantity, it's more likely they will perform surgery on patients who may not need the procedure, says Dr. Siddique. Instead, surgeons should find out the minimum payment for spine surgery is in their region and raise their prices so they can narrow their case volume to only those who absolutely need surgery.

5. Be selective with indications to ensure great outcomes.
To avoid poor outcomes, Dr. Siddique recommends operating only on proven indications — such as patients with stenosis, disc herniation, spondylolisthesis and deformity. "Avoid operating on patients with degenerative disc disease as their only indication," says Dr. Siddique. "Only operate on patients when you know they will get better."

Spine surgeons can also operate with other spine and neurosurgeons in the room to reduce complication risks.

6. Use marketing tools to brand your practice.
Surgeons must market their private practices to drive patient volume and promote brand recognition. Dr. Siddique says it's important for practices to have a moniker that reflects their commitment to high level care, which is why his group decided to practice under the name "Beverly Hills Spine Surgery."

"Beverly Hills denotes a quality of care," says Dr. Siddique. "The name of your corporation should tell patients about the level of care you provide; such as Premier Spine Surgeons, Inc."

Focus on any aspects that make your group special in your marketing efforts. For example, if your group includes all fellowship-trained spine surgeons, tout your expertise to show you are a quality organization.

7. Avoid becoming an employee.
Don't become part of an HMO as a hospital employee because patients then would select your services based on the fact that you are part of the program, not your surgical skill or expertise. "When you are part of an HMO, you are paid a salary but you aren't in control of how much you charge," says Dr. Siddique. "You become a spoke in a wheel and you aren't differentiated from other surgeons in the hospital. The patient who needs spine surgery will go to the hospital instead of you, and now you have become a commodity because the hospital will see all spine surgeons as the same."

Instead, stay independent and negotiate your own contracts. In some areas, it may be necessary to negotiate out-of-network contracts for your procedures.

More Articles on Spine Surgeons:

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7 Best Practices for Increasing Spine Center Profitability

7 Spine Surgeons on Where to Focus Research

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