There's No Floor
Quick thoughts on the Proposed 2027 PFS
$550.
That's about how much a total joint surgeon will take home for a total hip or total knee based on the 2027 PFS released late yesterday.
Due to revaluation of CPT codes and other spuriously justified cuts, joint replacement reimbursement will be down ~9-10%. Keep in mind, inflation adjusted TJA reimbursement is already down 56% since 2000.
Hip and knee replacement are two of the most successful, cost-effective interventions in medicine. GLP-1s would have to come down in price 30-90% to match the value of joint replacements. And most people will have to take them forever. 90-95% of modern joint replacements will last a lifetime.
I get it, no one feels sorry for Ortho Surgeons. But I'm genuinely curious what people think fair reimbursement is for these procedures and where the floor should be.
CMS wants to support primary care. Everyone agrees that's long overdue. Because of budget neutrality, the money has to come from somewhere, and Medicare spends a lot of money on joint replacements. Of course, that's in large part due to an aging population.
CMS also wants to migrate care into value-based arrangements. Again, most people agree that's a good thing. As it stands, there are no models (current or proposed) that allow direct surgeon participation. You can't push surgeons into models that don't exist.
These continued cuts will have unintended downstream effects. More consolidation (i.e., higher systemic prices), more Medicare opt outs, more early retirements. ASC ownership is a hedge, for now. CMS is also making it increasingly less attractive to employ physicians, especially Orthopedic Surgeons — mandatory VBC (with downside), shift to less lucrative outpatient settings, declining pro fees, less vertical integration arbitrage.
Rhetoric about sick care v. well care and spurious justifications for cuts aren't fixes. There are better, more thoughtful solutions. I've written about them extensively and welcome real discussion.
BS
I love the work you are doing and hope people are not only listening but starting to act.
I differ a little with your opinions on VBC, I believe it has been flawed since the beginning. VBC and most other programs are looking at healthcare from the revenue down rather than from the care up.
Although healthcare is business and it ultimately needs to have good business acumen the problem lies in the reality that healthcare should not be looked at as a profit center first.
Look at your statement about physicians they accepted the cuts (accepted may not be the proper term) and made up the delta with efficiencies. The reality of this is that you can only gain so much without sacrificing both patient as well as physician care. So as you reached that point you added ancillaries such s imaging and ASCs to cover the delta. This is in essence robbing Peter to pay Paul and worse yet the ones providing the care are taking all the costs.
At the same time this is happening on the business side insurance and CMS and even hospitals idea of gaining efficiencies are the addition of things such as EMR/EHRs, TPAs, Prior authorizations, Medicare Advantage etc. all things that not only add to the burden on those providing the actual care but also become extraction points for revenue.
One of the most damaging and flawed regulations in all of care is Stark and the AKL. They wrongfully block physicians from driving true change while safe harboring hospitals and insurance companies to profit from the very behavior they were meant to remove from healthcare.
In a paper that was just accepted for publication (Reclaiming the Continuum of Care: A Physician-Owned Capital Platform for Aligning Care Delivery, Risk, and Financial Infrastructure) will be coming out in JOEI soon we outline how to fix this.
• Care delivery generates revenue within aligned systems
• Standardized plan design directs patients toward high-value care
• Predictable utilization enables effective risk management
• Insurance reserves accumulate within the captive
• Reserves are deposited into the physician-owned bank
• Increased capital expands lending and infrastructure development
• Expanded capacity supports greater access and procedural volume
Care generates capital. Capital expands care.
The simple reality is that in healthcare physicians are not the problem, they are the solution. However there is real validity to the adage of "physician heal thyself"
I would welcome the opportunity to present you the Physician Flywheel.
So stupid. Pay surgeons a salary (a very high one). That will 1) stop them operating on marginal cases to make money. 2) stope them NOT operating if they are capitated and going to keep the savings. 3) stop Ben having to write these articles