Show Me the Money (or the Outcomes)

There is a perfect storm approaching our industry. Hospitals and physicians are being incentivized by Medicare to reduce cost using multiple programs. One pending example in 2013 is penalization for higher than average 30-day re-admission rates for specific high-cost conditions such as heart failure. In the past, this Medicare policy wouldn’t have worked without the support of orthopedic surgeons, but all that has changed now. Hospitals successfully have been creating a new cost-conscious culture by buying physician practices. With the exception of primary care physicians, OB-GYNs, etc., it is estimated that 67 percent of specialty physician practices (orthopedics and cardiovascular leading the way) have been purchased by hospital groups. This trend aligns hospital and physician incentives, and already is a major factor influencing product price, mix and use.