Insight, analysis & opinion from Joe Paduda
Just to be clear, I’m talking about the ones used in spine surgery, bone and joint surgery, and other orthopedic procedures. The use of surgical implants has grown dramatically, as have their prices, and the impact of utilization and price means big bucks for WC payers.
Big bucks as in $72 million in California alone. As in adding 11% to 33% to inpatient hospital bills in the Golden State.
Jason Shafrin reports on the link between physician compensation mechanisms and surgery rates.
Here’s the “money quote” –
“When specialists are paid through a fee-for-system (FFS) methodology rather than a capitation or salaried basis, surgery rates increase 155%. There is suggestive evidence that surgery rates fall when primary care physicians are paid on a fee-for-service basis compared to capitation or salaried payments.”
Not addressed is the key question – is the rate of surgery appropriate under either compensation mechanism?
If consumerism is going to work, the consumers are going to have to think about costs. Problem is, the real consumers (physicians) don’t think about patients’ out-of-pocket costs.
At least not when it comes to diagnostics and hospitalizations.
Insurance companies, employers, and TPAs rely on vendors to process bills, build and operate networks, manage prescriptions and PT, support litigation, and provide expert advice on problematic medical issues. In many instances the vendors are selected thru a competitive bidding process, wherein the lowest bidder gets the deal, or at the least has a much better chance of landing the business than their more costly competitors.
But in others, the selection process goes on seemingly without end.
More evidence is emerging about the rather minimal impact medical malpractice has on medical costs.
Two timely topics are in the news; the likelihood of cuts in the additional payments for Medicare Advantage programs and reductions in Medicare reimbursement rates for physicians.
The juxtaposition is just too…obvious to pass without comment.
Controversy over treatment types, overly generous payments to physicians to endorse a product, lawsuits alleging faulty research, the FDA under fire for inadequate evaluation, fights over reimbursement for a new procedure, and confusion over the usefulness of a common and very expensive procedure.
If you want to know why the US health care system is so dysfunctional, I give you low back pain.
Health care outsourcing to India was a $300 million business last year. And a just-released Health Affairs article indicates that the total market may be a lot, and I mean a LOT, bigger.
You’re better off getting treated at a not-for-profit hospital. Unless you qualify for treatment at a VA hospital, in which case you’re the luckiest of all. At least that’s the conclusion drawn by researchers at Harvard who evaluated care for three common conditions at over 4000 hospitals.
The annual Medicare physician price cut season is on us. Next year’s reduction will average 5%, although payments for office visits (evaluation and management codes) will increase by up to 30%, but reimbursement for other procedures will be slashed up to 20%.
Don’t expect this to actually happen; every year the Medicare reductions are reversed by Congress. And this year will be no different. I’d expect Congress will do something to reverse the cuts, at least in part.