Casinos dazzle you with flashing lights, high-stakes tables, and the chance to win millions of dollars. The house always wins, but casinos still trick people into thinking they will make money. Substitute Medicare for casinos and you can see what physicians who take risks with the country’s largest health payer are up against.
I’m an orthopedic surgeon, so I’ll focus here on this specialty. But what I’m describing also affects other surgeons and physicians.
After two decades of fixing the price of joint replacement at a paltry $1,300, Medicare lured doctors into an experimental program to save the government even more money. It requires surgeons to bundle the cost of surgery and all postoperative costs over 90 days into one lump sum, which varies from surgeon to surgeon.
Surgeons whose patients cost Medicare less than the lump sum over 90 days get a portion of their savings as a reward. Surgeons who don’t save Medicare money face penalties large enough to bankrupt them.
I was among the few lucky ones. The protocols I developed helped me decrease costs and beat the house by reducing medical complications. But as happens in Las Vegas, when you win, the house makes new rules.
The Medicare Bundled Payments for Care Improvement Advanced (BPCI-A) did just that. Even though my program featured one of the lowest costs in the country, Medicare lowered my target price even further. Once I realized it had rigged the game, I cashed out before I lost my shirt.
I am far from alone.
Nicholas Mast — a San Francisco-based surgeon specializing in hip replacement — has outperformed most of his colleagues in terms of lower costs and complications nationally since 2015. He added additional staff to achieve his outcomes. He collected bonuses from Medicare for his work. But after Medicare changed the rules, and seeing other surgeons pay tens of thousands of dollars in penalties, he left the Medicare BPCI-A roulette table and has since left Medicare altogether.
With baby boomers coming of age and Americans enjoying longer lives than when Congress passed Medicare in 1965, Medicare will run out of funds in 2026. The BPCI-A program as it currently stands is pushing the best, lowest-cost surgeons out of Medicare, depriving people covered by Medicare of access to them.
This year, Medicare again reduced surgeon reimbursement while recommending an 8.5% lift for hospitals. Hospitals, though, are prohibited from prescribing or directing care. Only physicians can do that. Therefore, they are best positioned to create value since they orchestrate the entire episode of care. How does rewarding hospitals with more taxpayer dollars and cutting pay for the surgeons who help bring in patients save money?
Despite its failures, Medicare recently stated it will mandate that all surgeons and hospitals participate in BPCI-A by 2024.
Why is the federal government forcing surgeons to gamble in a fixed game? The new mandate and poor reimbursement will force many more of us out of caring for patients covered by Medicare, especially surgeons with the lowest complication rates. The number of available surgeons has already fallen.
Three simple changes can help prevent this exodus — and save Medicare money.
First, incentivize surgeons. Set a nationwide 90-day bundle price, rather than one that differs from hospital to hospital. If a surgeon beats that number, the government and surgeon share in the savings for that patient. It will require transparent pricing to work.
Second, if surgeons do not meet the bundle price for a particular patient, they receive no extra reimbursement but they also do not bear personal financial responsibility for the overage. It enables surgeons to take care of sicker patients without fearing financial retaliation from the government.
Third, review surgeons who repeatedly exceed the negotiated price. Provide retraining to meet cost goals or potentially expel them from Medicare.
Knee and hip replacements significantly decrease pain and improve quality of life, with an 85% survival rate at 20 years. Surgeons deserve fair reimbursement for their work like any other profession, so tying fair reimbursement to value-based outcomes only makes sense.
Dr. Mast and I decreased costs in the rigged game. We proved that it can be done.
Surgeons will continue to drop Medicare or limit the number of Medicare patients they see as reimbursement becomes more unsustainable. What will you do when your surgeon faces a mandatory risk program they can no longer tolerate and stops accepting Medicare?
Americans must demand from their elected officials more transparency on health care costs, especially hospital costs. This will save money while improving lives and overall satisfaction. Medicare should not turn health care into a high-stakes poker table where the house always wins.
Andrew Wickline is an orthopedic surgeon in Utica, New York, and a fellow of the American Academy of Orthopaedic Surgeons.