Written by Bradley S. Ellison, M.D.
Orthopedic care is a subspecialized medical and surgical discipline focused on the prevention and treatment of various musculoskeletal injuries and diseases, including hip and knee replacements, sports injuries, spinal disorders or problems with the upper or lower extremities. With current estimates, a single individual will enlist the expertise of an orthopedic surgeon between 10 and 12 times in his or her lifetime. As the ongoing socioeconomic pressures related to burgeoning government deficits continue percolating throughout our country, the focus on health care reform intensifies. There is speculation that access to medical care could be threatened. Specifically, specialty medical care services, such as orthopedic care, may be impacted significantly, dependent on the scope of legislation that is ultimately approved.
In previous years, access to orthopedic care, or medical care in general, could have been complicated by either a lack of insurance or insufficient insurance coverage. Growing concern about unfettered patient access to physicians has served to increase political pressure to reformat the U.S. health care system, with the aim of providing more Americans with the opportunity to receive orthopedic care when needed. To this end, the Patient Protection and Affordable Care Act (PPACA) was signed into federal law in 2010. At an approximated cost of nearly $1 trillion, the ambitious goal of this legislation is to expand health care coverage to more than 30 million uninsured Americans based on utilizing three programs: Medicaid, private insurance agencies and Medicare.
Created in 1965 through the Social Security Act, Medicaid is a joint federal and state program designed to provide needs-based health services. Although eligibility restrictions differ from state to state, the PPACA is set to add 16 million people into the Medicaid program by 2014, encompassing citizens reporting an income within 133 percent of the federal poverty level. At first glance, the thought of more coverage to more Americans may sound gratifying. However, before the PPACA, many states struggled financially to support their Medicaid programs, resulting in substantial restrictions for participants because of decreased compensation for physicians and other health
care services.
Although variable for each state, Medicaid typically reimburses 15 to 20 percent of the billable charges submitted for reimbursement of physician services. Imagine if any other profession, for example a plumber, electrician or attorney, only received 20 percent of their billed services—how quickly would their operations be impacted? Even before the PPACA, Medicaid funding was increasingly a major budgetary issue for many states and the federal government, costing approximately 20 percent of the state budget and 10 percent of the nation’s gross domestic product. The federal government and many states are currently experiencing a budgetary crisis, making it difficult to understand where the projected $300 billion needed to cover expansion of Medicaid will come from. Moreover, how will the previous declining reimbursement for physician services be corrected in order to ensure Medicaid patients will actually have meaningful access to orthopedic care? Many physicians and health care experts are skeptical that expansion of the Medicaid program will translate into improved access for participants to medical care, but only time will tell if this government provision accomplishes its intended objective.
With the new Affordable Care Act, all Americans outside of Medicaid eligibility and younger than 65 years old will be required to obtain personal health care insurance or risk tax penalties for non-compliance. If a health insurance policy is not provided through employment, insurance exchanges scheduled to open in 2014 as a provision of the PPACA may facilitate the procurement of an individual or family policy. With legal enforcement, insurance agencies will be expected to provide reasonable premiums that will be standardized based on specific demographic features for populations without any ability to discriminate against pre-existing medical conditions or newly developed illnesses. Determining if this approach to expand private health insurance will be successful in improving access to orthopedic care largely depends on the enforceability of this law, which is currently being challenged in 28 states on grounds that it may be a breach to the U.S. Constitution. However, with more Americans being urged to invest their own “skin in the game,” the financial burden of caring for this segment of the uninsured population previously shouldered by the physicians and hospital systems will be redistributed to the newly insured American public and insurance agencies. To this end, actual access to orthopedic care may improve, but utilization of medical services will likely decrease as Americans will be expected to pay a greater proportion of the expenses accrued for medical services in the form of higher deductibles or out-of-
pocket expenditures.
In 1965, the Medicare program was formulated as the first major federal health insurance entitlement program as an amendment to the Social Security Act. Medicare is a complex, multi-segmented system of health care insurance provided by the government for Americans older than 65. In 2008, Medicare provided health care coverage for approximately 45 million Americans, with that number expected to nearly double by 2030, as more baby boomers become eligible. Medicare has been divided into parts A, B, C and D, with part B principally responsible for payments to physicians. Historically, Medicare has provided reimbursement for approximately 20 to 25 percent of billed services and has not kept up with the operating expenses in a medical practice nor inflation during the past two decades. As I write this column, physician reimbursement is projected to be decreased by 29 percent on January 1, 2012, unless rescinded by the U.S. Congress as a byproduct of the Sustainable Growth Rate (SGR) formula.
Most Americans not only understand that repealing the flawed SGR formula is imperative, but that any further reduction in physician reimbursement threatens access to orthopedic care for Medicare patients. The truth is that for years, physicians have been saddled with the mutually incompatible prospects of continually decreasing reimbursements and perpetually increasing operating expenses. Any further decrease in physician reimbursement from Medicare will likely exacerbate the crisis of patient access and threaten to compromise the high-quality standard of health care most aging Americans have come to expect and rightfully deserve.
As of December 2011, the supercommittee appointed by President Obama and Congress to develop a collaborative plan for reducing our federal budget deficit has failed to produce any meaningful resolution. Without doubt, our society is at a historical crossroads. We are confronted with unparalleled challenges to continue providing the highest quality of health care to an ever-increasing population of Americans with fewer financial resources available to us. With the projected annual spending for Medicare and Medicaid estimated at 25 percent of the overall annual federal budget, most expert economic analyses indicate that for any meaningful health care reform to be compatible with the future prosperity of our nation, substantial cost-reduction measures will be needed for many government programs.
The unfortunate downstream result of curtailing financial support for Medicaid and Medicare programs usually means diminished reimbursement for physicians caring for these patients. As we have witnessed patient access to medical care suffer from previous reductions in physician reimbursement throughout the past two decades, we could only expect this trend to continue if further reductions were realized. For health care reform to truly be comprehensive and successful, not only will the concern for patient access need to be addressed but protection of physicians will need to be a central focus of legislation. Specific measures will be needed to address frivolous lawsuits and tort reform, reduce the stress, incurred debt and duration of training for physicians, as well as reduce the perpetually increasing operating costs for compliance with extensive government regulations for medical practices in the 21st century.
The one certainty that has persevered through time, regardless of profession, is the basic tenet that the quality of a service is proportionate to the value of compensation: “you get what you pay for.” If physician reimbursement declines much further, as potentially projected for Medicaid and Medicare patients, not only would patient access be negatively impacted, but the high quality of care that has defined the American medical institution may
also decline.