- Email: [email protected]
Maintaining control of your orthopaedic practice
Presidential Speech
Maintaining Control of Your Orthopaedic Practice Neal C. Small, M.D.
am pleased to address you this morning on my final .day as President of the Arthroscopy Association of North America. I have had a m o s t enjoyable year, which has been educational for me and hopefully productive for the Association. I entered this year as President with significant concerns about the obstacles that we as subspecialists, practicing minimally invasive surgery, will encounter in the future. I conclude the year with many of these same concerns still remaining but with perhaps a few answered. I cannot conclude the year without thanking those who have made my presidency rewarding and enjoyable. First, I would like to thank the staff of the Arthroscopy Association at the Chicago office, notably Holly Albert, Ed Goss, Pare Martens, and Donna Nikkel for their efforts and never-ending availability. I would also like to thank my long-time friend, Jack McGinty, for returning to our association as Executive Vice President and making the duties of the Presidency manageable. Jack's efforts in Chicago have allowed me to travel and represent the Association while being assured that the store is being minded. I would like to thank my family for their love, support and encouragement throughout the years. Many of them have honored me greatly by coming to this meeting. My parents, A1 and Helen Small, are with us today, as well as my in-laws, Erwin and Maxine Waldman. In addition, my brother, Stuart, and his wife, Patty; my brother, Joel, and his wife, Brenda; Cherie's sister, Carol Jean, and her husband, Howard; and Cherie's brother, Steve, and his wife, Jackie, have all joined us here. I want to let each of them know how much it means to me to have them here.
I
Address correspondence and reprint requests to Neal C. Small, M.D., 3801 W. 15th St, Bldg 2, Suite 350, Plano, TX 75075, U.S.A. Presented at the 15th Annual Meeting of the Arthroscopy Association of North America, Washington, D.C., April 13, 1996. © 1996 by the Arthroscopy Association of North America 0749-8063/96/1204-149953.00/0
516
My three children are here with us today, Justin, who is in commercial real estate in Dallas; Macey, who is a sophomore at The University of Texas; and Meredith, who is a junior in high school. It has made this an even more special week for me to have so many of my family here. I hope everyone who made the trip is enjoying themselves. I suppose a married man is only as successful as his better half will allow him to be. I must say that my wife, Cherie, has boosted me, encouraged me and allowed me to achieve whatever measure of success that I may have achieved. Cherie is constantly encouraging and nurturing my projects. I would not be standing in front of you today without her guidance, loyalty and friendship. We surgical subspecialists have a problem today. The problem is managed care. This problem c o m p o u n d s when we consider our obligation to deliver quality care while there is rationing of orthopaedic and arthroscopic care under the ominous shadow of managed care. When I began practice 21 years ago, orthopaedic care was intelligently designed and well delivered. The quality and utilization assessments were performed by our true peers--other surgeons. Today, we practice in an era of ever-increasing scrutiny, not by our orthopaedic colleagues, but by those who pay for the care we deliver. The quality and utilization assessments are not performed by our peers any longer but by managers at the lower executive or clerical levels. These assessments are almost entirely economic, regardless of how they are disguised. True quality is rarely assessed. As subspecialist arthroscopic surgeons we, unfortunately, are in a very vulnerable position. Any physician who has subspecialized, and particularly those who have found themselves in fields where relatively expensive care is delivered, are vulnerable to the vagaries of the payors. Our vulnerability does not extend merely to reimbursement in our own practices. Our vulnerability includes our entire subspecialty of arthroscopic sur-
Arthroscopy: The Journal of Arthroscopic and Related Surgery, Vol 12, No 4 (August), 1996: pp 516-518
PRESIDENTIAL SPEECH
gery. It is possible that we arthroscopic surgeons may find our subspecialty eliminated within the next several years--consolidated within the umbrella designation of "musculoskeletal provider." As we visit here this morning, arthroscopic meniscectomies are being performed by rheumatologists and other non-orthopaedists. The orderly delivery of surgical care as we have known it during our careers is changing. For the most part, we have either ignored or paid very little attention to these escalating trends. These are simply the facts. As Aldous Huxley said, "Facts do not cease to exist just because they are ignored." We are currently practicing in a time where health care delivery is being completely redesigned in this country. I frequently use the phrase "healthcare delivery re-engineering." What can we do to assure that our individual practices survive and our subspecialty survives in this managed care maelstrom? One thing that can be done is to provide the most cost-effective delivery of care in our field. Performing arthroscopic procedures in an expensive environment, using the most expensive equipment and only disposable supplies, is not acknowledging that this re-engineering of health care delivery exists. In order to survive as subspecialists, arthroscopic surgeons will be required to deliver cost-effective care. We will not be able to allow patient charges of $5,000 or more for the use of a hospital operating room for a 30-minute arthroscopic procedure. Fortunately, there has been a distinct and aggressive movement over the past several years, in which f have certainly been involved, which has seen the delivery of outpatient arthroscopy largely transition from the hospital operating room to the hospital outpatient surgery unit to the ambulatory surgery center and now, in many parts of the country, to the orthopaedic clinic. In the realm of anterior cruciate ligament surgery, there are now several published series showing the successful outcomes and the cost-effectiveness of reconstructions performed on an outpatient basis. In addition, we must give strong consideration to the cost of diagnostic procedures such as MRI and CT, rehabilitation measures such as CPM and hot ice, and assessment devices such as isokinetic testing. This entire transition toward cost-effective delivery of arthroscopic care is gaining significant momentum and will continue to escalate as pressures on providers intensify. For the past few years, I have given presentations on regaining control of our orthopaedic practices. Complete practice independence may no longer be possible; however, there are certain measures that can be taken to maintain or in some cases regain control of
517
our practice destinies. Today's managed care environment is rapidly moving toward the provider umbrella of the multispecialty IPA with primary care gatekeepers. These gatekeepers withhold referrals for surgical treatment until they absolutely must satisfy the demands of the uneasy patient. Most primary care physicians have signed contracts calling for a withhold and a portion of the shared risk pool if they practice costeffectively. Increasingly, these gatekeepers insist that minimally invasive procedures be utilized and that these procedures be performed in the most cost-effective environment. Even large consolidated orthopaedic groups and single-specialty orthopaedic IPAs are going to need to address the cost of the surgical care they deliver, or they will lessen any likelihood of year-end profit when they are bidding for at-risk contracts. The risk-pool dollars will simply not be there at the end of the year for the orthopaedic group if the at-risk contract or the global bid provides for the hospital operating room or outpatient surgery department of the hospital as the venue for arthroscopic care. Today, the payors are fully aware of the extra expense when the hospital is involved in arthroscopic c a r e - - i t shows on your provider profile that they keep. They now prefer to negotiate with physician groups, particularly multispecialty IPAs, for care in less expensive venues. There has been a rapid and justifiable exodus of arthroscopic surgeons from the hospital operating rooms. Most hospitals of today have become cost centers, not profit centers. The PHO concept as a joint effort between the hospital and the physician for contracting and revenue sharing is failing nationwide. It will not be a surprise to find hospitals in the near future consisting of emergent care, critical care, and geriatric care centers. Oral surgeons, dentists, and podiatrists have been excluded from hospital staffs until the last few decades. By necessity, they learned office surgical and office anesthesia techniques because they were not allowed to perform their procedures in the hospital environment. We orthopaedic surgeons, on the other hand, have seen our specialty evolve from large crippled children's hospitals and trauma centers in 19th century England and America. We traditionally have not been encouraged to use the office or the clinic for delivery of surgical care, even in the era of minimally invasive techniques. As arthroscopic surgeons, we are positioned more favorably than other orthopaedic subspecialists to take advantage of the economy of performing least invasive surgery in the least expensive environment. The cost pressures inherent in managed care will mandate that we learn these techniques in
518
N. C. SMALL
order to deliver cost-effective care in the future or we will rapidly become victims of the deselection process, both individually and as an entire subspecialty. Confucius said, "As the water shapes itself to the vessel that contains it, so a wise man adapts himself to circumstances." We must adapt our practices to the demands of employers, consumers, and managed care payors. Your association, The Arthroscopy Association of North America, has become increasingly active in dealing with changes in managed care and reimbursement. During this past year, we have hired Washington counsel to represent our interests at the legislative and regulatory levels. Mike Romansky, with the firm of McDermott, Will & Emery, will keep a close watch on issues of importance to our Association and our membership and will keep us informed. During the past year, we have worked closely with the American Academy of Orthopaedic Surgeons on health policy and practice matters. Nick Cavarocchi from the Washington office of the Academy is here with us at this meeting. Nick has worked closely with us on several matters relating to legislative and regulatory issues, including access to specialty care and Medicare reform. Ken DeHaven, this year's Academy president, has been with us here this week. As you may know, Ken is a past president of this organization. Ken has been a good friend to many of us through the years and a good friend to this organization. Ken is followed next year in the Academy presidency by
Doug Jackson, who is well known to all of us and is also a past president of this organization. Bill Tipton, the executive vice president of the Academy, has also been with us here this week. Bill is a longtime friend, going back to our residency days together at UC-Davis. It has been a true pleasure having him here. As you can well see, we should enjoy a close working relationship with the American Academy of Orthopaedic Surgeons for years to come. Our Association has come a long, long way since its inception in 1981. With the external pressures that the Association faces today, the next 15 years may not be as smooth and may not offer the rewards that we have seen during the past 15 years in arthroscopic surgery. We must not, however, allow these external pressures from managed care to affect our responsibility to deliver quality and compassionate care. I firmly believe that with good orthopaedic and arthroscopic care, good leadership, and with attention to managed care and reimbursement issues, our subspecialty will survive. If we continue to improve the cost-effective delivery of arthroscopic care, our subspecialty will not only survive but should thrive. The Arthroscopy Association of North America will then continue to be the voice and the conscience for providers who deliver quality cost-effective minimally invasive care for the musculoskeletal system. I look forward to continuing my service to this organization in the years to come. Thank you for a great year as your president.
Maintaining Control of Your Orthopaedic Practice Neal C. Small, M.D.
am pleased to address you this morning on my final .day as President of the Arthroscopy Association of North America. I have had a m o s t enjoyable year, which has been educational for me and hopefully productive for the Association. I entered this year as President with significant concerns about the obstacles that we as subspecialists, practicing minimally invasive surgery, will encounter in the future. I conclude the year with many of these same concerns still remaining but with perhaps a few answered. I cannot conclude the year without thanking those who have made my presidency rewarding and enjoyable. First, I would like to thank the staff of the Arthroscopy Association at the Chicago office, notably Holly Albert, Ed Goss, Pare Martens, and Donna Nikkel for their efforts and never-ending availability. I would also like to thank my long-time friend, Jack McGinty, for returning to our association as Executive Vice President and making the duties of the Presidency manageable. Jack's efforts in Chicago have allowed me to travel and represent the Association while being assured that the store is being minded. I would like to thank my family for their love, support and encouragement throughout the years. Many of them have honored me greatly by coming to this meeting. My parents, A1 and Helen Small, are with us today, as well as my in-laws, Erwin and Maxine Waldman. In addition, my brother, Stuart, and his wife, Patty; my brother, Joel, and his wife, Brenda; Cherie's sister, Carol Jean, and her husband, Howard; and Cherie's brother, Steve, and his wife, Jackie, have all joined us here. I want to let each of them know how much it means to me to have them here.
I
Address correspondence and reprint requests to Neal C. Small, M.D., 3801 W. 15th St, Bldg 2, Suite 350, Plano, TX 75075, U.S.A. Presented at the 15th Annual Meeting of the Arthroscopy Association of North America, Washington, D.C., April 13, 1996. © 1996 by the Arthroscopy Association of North America 0749-8063/96/1204-149953.00/0
516
My three children are here with us today, Justin, who is in commercial real estate in Dallas; Macey, who is a sophomore at The University of Texas; and Meredith, who is a junior in high school. It has made this an even more special week for me to have so many of my family here. I hope everyone who made the trip is enjoying themselves. I suppose a married man is only as successful as his better half will allow him to be. I must say that my wife, Cherie, has boosted me, encouraged me and allowed me to achieve whatever measure of success that I may have achieved. Cherie is constantly encouraging and nurturing my projects. I would not be standing in front of you today without her guidance, loyalty and friendship. We surgical subspecialists have a problem today. The problem is managed care. This problem c o m p o u n d s when we consider our obligation to deliver quality care while there is rationing of orthopaedic and arthroscopic care under the ominous shadow of managed care. When I began practice 21 years ago, orthopaedic care was intelligently designed and well delivered. The quality and utilization assessments were performed by our true peers--other surgeons. Today, we practice in an era of ever-increasing scrutiny, not by our orthopaedic colleagues, but by those who pay for the care we deliver. The quality and utilization assessments are not performed by our peers any longer but by managers at the lower executive or clerical levels. These assessments are almost entirely economic, regardless of how they are disguised. True quality is rarely assessed. As subspecialist arthroscopic surgeons we, unfortunately, are in a very vulnerable position. Any physician who has subspecialized, and particularly those who have found themselves in fields where relatively expensive care is delivered, are vulnerable to the vagaries of the payors. Our vulnerability does not extend merely to reimbursement in our own practices. Our vulnerability includes our entire subspecialty of arthroscopic sur-
Arthroscopy: The Journal of Arthroscopic and Related Surgery, Vol 12, No 4 (August), 1996: pp 516-518
PRESIDENTIAL SPEECH
gery. It is possible that we arthroscopic surgeons may find our subspecialty eliminated within the next several years--consolidated within the umbrella designation of "musculoskeletal provider." As we visit here this morning, arthroscopic meniscectomies are being performed by rheumatologists and other non-orthopaedists. The orderly delivery of surgical care as we have known it during our careers is changing. For the most part, we have either ignored or paid very little attention to these escalating trends. These are simply the facts. As Aldous Huxley said, "Facts do not cease to exist just because they are ignored." We are currently practicing in a time where health care delivery is being completely redesigned in this country. I frequently use the phrase "healthcare delivery re-engineering." What can we do to assure that our individual practices survive and our subspecialty survives in this managed care maelstrom? One thing that can be done is to provide the most cost-effective delivery of care in our field. Performing arthroscopic procedures in an expensive environment, using the most expensive equipment and only disposable supplies, is not acknowledging that this re-engineering of health care delivery exists. In order to survive as subspecialists, arthroscopic surgeons will be required to deliver cost-effective care. We will not be able to allow patient charges of $5,000 or more for the use of a hospital operating room for a 30-minute arthroscopic procedure. Fortunately, there has been a distinct and aggressive movement over the past several years, in which f have certainly been involved, which has seen the delivery of outpatient arthroscopy largely transition from the hospital operating room to the hospital outpatient surgery unit to the ambulatory surgery center and now, in many parts of the country, to the orthopaedic clinic. In the realm of anterior cruciate ligament surgery, there are now several published series showing the successful outcomes and the cost-effectiveness of reconstructions performed on an outpatient basis. In addition, we must give strong consideration to the cost of diagnostic procedures such as MRI and CT, rehabilitation measures such as CPM and hot ice, and assessment devices such as isokinetic testing. This entire transition toward cost-effective delivery of arthroscopic care is gaining significant momentum and will continue to escalate as pressures on providers intensify. For the past few years, I have given presentations on regaining control of our orthopaedic practices. Complete practice independence may no longer be possible; however, there are certain measures that can be taken to maintain or in some cases regain control of
517
our practice destinies. Today's managed care environment is rapidly moving toward the provider umbrella of the multispecialty IPA with primary care gatekeepers. These gatekeepers withhold referrals for surgical treatment until they absolutely must satisfy the demands of the uneasy patient. Most primary care physicians have signed contracts calling for a withhold and a portion of the shared risk pool if they practice costeffectively. Increasingly, these gatekeepers insist that minimally invasive procedures be utilized and that these procedures be performed in the most cost-effective environment. Even large consolidated orthopaedic groups and single-specialty orthopaedic IPAs are going to need to address the cost of the surgical care they deliver, or they will lessen any likelihood of year-end profit when they are bidding for at-risk contracts. The risk-pool dollars will simply not be there at the end of the year for the orthopaedic group if the at-risk contract or the global bid provides for the hospital operating room or outpatient surgery department of the hospital as the venue for arthroscopic care. Today, the payors are fully aware of the extra expense when the hospital is involved in arthroscopic c a r e - - i t shows on your provider profile that they keep. They now prefer to negotiate with physician groups, particularly multispecialty IPAs, for care in less expensive venues. There has been a rapid and justifiable exodus of arthroscopic surgeons from the hospital operating rooms. Most hospitals of today have become cost centers, not profit centers. The PHO concept as a joint effort between the hospital and the physician for contracting and revenue sharing is failing nationwide. It will not be a surprise to find hospitals in the near future consisting of emergent care, critical care, and geriatric care centers. Oral surgeons, dentists, and podiatrists have been excluded from hospital staffs until the last few decades. By necessity, they learned office surgical and office anesthesia techniques because they were not allowed to perform their procedures in the hospital environment. We orthopaedic surgeons, on the other hand, have seen our specialty evolve from large crippled children's hospitals and trauma centers in 19th century England and America. We traditionally have not been encouraged to use the office or the clinic for delivery of surgical care, even in the era of minimally invasive techniques. As arthroscopic surgeons, we are positioned more favorably than other orthopaedic subspecialists to take advantage of the economy of performing least invasive surgery in the least expensive environment. The cost pressures inherent in managed care will mandate that we learn these techniques in
518
N. C. SMALL
order to deliver cost-effective care in the future or we will rapidly become victims of the deselection process, both individually and as an entire subspecialty. Confucius said, "As the water shapes itself to the vessel that contains it, so a wise man adapts himself to circumstances." We must adapt our practices to the demands of employers, consumers, and managed care payors. Your association, The Arthroscopy Association of North America, has become increasingly active in dealing with changes in managed care and reimbursement. During this past year, we have hired Washington counsel to represent our interests at the legislative and regulatory levels. Mike Romansky, with the firm of McDermott, Will & Emery, will keep a close watch on issues of importance to our Association and our membership and will keep us informed. During the past year, we have worked closely with the American Academy of Orthopaedic Surgeons on health policy and practice matters. Nick Cavarocchi from the Washington office of the Academy is here with us at this meeting. Nick has worked closely with us on several matters relating to legislative and regulatory issues, including access to specialty care and Medicare reform. Ken DeHaven, this year's Academy president, has been with us here this week. As you may know, Ken is a past president of this organization. Ken has been a good friend to many of us through the years and a good friend to this organization. Ken is followed next year in the Academy presidency by
Doug Jackson, who is well known to all of us and is also a past president of this organization. Bill Tipton, the executive vice president of the Academy, has also been with us here this week. Bill is a longtime friend, going back to our residency days together at UC-Davis. It has been a true pleasure having him here. As you can well see, we should enjoy a close working relationship with the American Academy of Orthopaedic Surgeons for years to come. Our Association has come a long, long way since its inception in 1981. With the external pressures that the Association faces today, the next 15 years may not be as smooth and may not offer the rewards that we have seen during the past 15 years in arthroscopic surgery. We must not, however, allow these external pressures from managed care to affect our responsibility to deliver quality and compassionate care. I firmly believe that with good orthopaedic and arthroscopic care, good leadership, and with attention to managed care and reimbursement issues, our subspecialty will survive. If we continue to improve the cost-effective delivery of arthroscopic care, our subspecialty will not only survive but should thrive. The Arthroscopy Association of North America will then continue to be the voice and the conscience for providers who deliver quality cost-effective minimally invasive care for the musculoskeletal system. I look forward to continuing my service to this organization in the years to come. Thank you for a great year as your president.