A panel of executives in the spine and pain management industry discussed the evolving industry and clinical and competitive issues at the Becker's 13th Annual Spine, Orthopedic and Pain Management-Driven ASC Conference + The Future of Spine in Chicago June 11.
The panel included John Prunskis, MD, president and medical director of the Illinois Pain Institute and medical director of the Barrington Pain and Spine Institute; Danny Bundren, JD, vice president of acquisitions, operations and developments for Surgery Partners; and Todd Andres, CEO of Spinal Elements. Timothy J. Fry, JD, of McGuireWoods moderated.
Note: Questions and panelist responses are edited for length and clarity.
Question: How are you seeing the market mature and how are providers responding to some of those changes?
Dr. John Prunskis: The market is maturing and changing at the same time. With regards to Obamacare, we are seeing high deductibles and an increase in patient awareness around costs. We're also seeing hospitals acquire primary care practices, meaning some physicians continue to refer patients within the network with others do not.
For our administrators, it's a constant battle and balance between looking at the pressures of the market, trying to find new referral patterns and monitoring hospital acquisitions in all our geographic areas.
Danny Bundren: When I think about where we are as an industry today compared to four years ago, we are facing many of the same issues on a macro level, such as how to move case loads to an ASC, physician employment, pressures on reimbursement and uncertainty in the healthcare industry. What has changed from the spine perspective is we are seeing much more difficulty getting cases reimbursed on the ASC side with more payer and outcome challenges. From the pain perspective, we're seeing more independent pain practitioners face state scrutiny in procedure rooms. We're also seeing more pain physicians try to latch onto the idea of regenerative medicine and using stem cell and platelet injections.
Todd Andres: From one perspective, we saw the market experience double-digit growth for a decade or longer and those days are gone now. In response, we're seeing a lot of growth and opportunity in outpatient spine procedures. When we started the company in 2003, there were about 30 competitors in the area, but that number has grown to closer to 300. What it takes for a company to grow is very different than what it took back then.
We see opportunity in innovative devices that expand the continuum of care and sophistication in biologics. This market has flattened out and we need to be smarter than our competition.
Q: How do surgery centers and other nonhospital practices view reimbursement changes?
JP: The fact that hospital outpatient facilities charge an exorbitant amount of money compared to a surgery center is well known. Frequently, the largest employer in a politician's district is the hospital so when there is any talk about getting parity between ASCs and hospital reimbursement, you're talking about a large political mountain to move. There is no question that if the money being paid to hospitals was removed and there was equality in reimbursement rates between hospitals and ASCs, it would solve a majority of the Medicare crisis in this country. There is a political reality and an economic reality and the two don't always mesh.
DB: For the last few years, we've seen many surgery centers acquired by hospitals converted to HOPDs, which escalates the reimbursement so much so that the Department of Justice has decided to look into it. But that's all they are doing — looking into it. The most frustrating thing in dealing with payers is they have to have a health system or acute care facility so most payers you come in contact with are reluctant to raise ASC reimbursement rates since the hospitals will want more money too. When ASCs have a hospital partner that has a majority interest, we're seeing that those hospital rates aren't necessarily carte blanche being added to the surgery center. There is some compression, but not nearly as much as we'd like.
TA: This isn't really my area but I find it amazing that the government created this problem and now wants to investigate it. This happened because of the different cost-of-living adjustments for the healthcare consumer, which they created and now want to investigate. It's crazy.
Q: This industry is changing, and not just regarding payers — there are a lot of clinical changes in the spine and pain world. What are some of the changes and how are you taking advantage of the opportunities the changes present?
JP: There are clinical changes in both medical management and on the interventional side. On the non-interventional side the changes are all about opiates, opiates, opiates. We prescribe so few opiates and not because we don't think they are appropriate but because, if you identify and fix the source of a patient's pain, you don't need them. Providers need to make an effort and be vigilant in distinguishing themselves from pill mills by being a true interventional clinic.
On the interventional side, there have been some subtle advances in spinal cord stimulation but, by and large, the interventional procedures that have been in place for the past few years haven't changed all that much.
DB: From the business perspective, we have to continue to embrace new technology, and that comes with a cost. We've got to be able to work with our partners and convince them that we are going to continue to plow investment dollars back into new clinical procedures that are coming out. Employee retention and training is also crucial to keep workers up-to-date on all the new procedures and developments coming out.
TA: We're involved in the implant side of innovation and we think the fusion of implants and biomaterials will be an important area. Procedure innovation in terms of minimally invasive surgery — making them less invasive, faster and more reproducible — will continue.
There is also a business change in terms of how companies need to approach providers because it is different than selling to someone in the OR of a traditional hospital.