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Trends in the Relative Payment to Hospitals and Physicians by Private Payers for Common Orthopedic Surgical Procedures: 2010-2016

From the 2019 HVPAA National Conference

Dr. Majd Marrache (Johns Hopkins Medical Institute), Mr. Andrew Harris (Johns Hopkins Medical Institute), Dr. Varun Puvanesarajah (Johns Hopkins Medical Institute), Dr. Michael Raad (Johns Hopkins Medical Institute), Dr. Amit Jain (Johns Hopkins Medical Institute)

Background

Though cost-effective, common orthopedic surgical procedures incur significant costs to both patients and the healthcare system. In the face of rising, unsustainable healthcare costs in the United States, it is important to understand trends in the allocation of healthcare spending for common orthopedic surgical procedures. Hospital-physician financial alignment is important to maintain throughout the implementation of novel healthcare payment models such as value based care and bundled payments.

Objective

Our objective was to determine recent trends in the ratio of hospital to surgeon payments for commonly performed elective orthopedic surgical procedures.

Methods

Using a private insurance claims database, we evaluated trends in payments made to both hospitals and the primary physician responsible for elective orthopedic surgical procedures, including: single level anterior cervical discectomy and fusion (ACDF), one level lumbar fusion, total knee arthroplasty (TKA) and total hip arthroplasty (THA). Data was analyzed from January 2010 to December 2016, and our cohort was identified using ICD-9/10 and CPT codes. The ratio of hospital payments to physician payments (H:P) was calculated using linear regression models, adjusting for age, sex, medical comorbidities, length of stay, and inflation.

Results

We identified 50,951 patients who underwent ACDF, 52,095 lumbar fusion, 145,118 THA, and 260,346 TKA who underwent spinal fusion. From 2010 to 2016, H:P increased by a factor of 4 for TKA, 3.7 for THA, 3.5 for lumbar fusion and 1.9 for ACDF. Overall, inflation-adjusted hospital payments rose by 20%, while there was a trend towards decreasing inflation-adjusted physician payments for lumbar fusion (-2%, p<0.001), TKA (-1.4%, p<0.001), and THA (-1.3%, p<0.001).

Conclusion

Adjusted hospital-physician payment ratios from private payers for common orthopedic surgical procedures rose from 2010-2016. Even after adjusting for potential confounders and inflation, hospital payments have risen significantly, while similarly adjusted payments to physicians are either stagnant or decreasing.

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