Contact: Michael Smart, (801) 378-7320
PROVO, Utah -- A Brigham Young University economist and an orthopedic surgeon believe health maintenance organizations' cost controls will result in poorer orthopedic care in the future.
In an article published this week in the orthopedic medical journal Arthroscopy, Norman Thurston, assistant professor of economics, and Ron Clark, M.D., who practices in Indiana, point out that the financial incentives that spurred the development of ever-improving orthopedic techniques are waning.
"It appears that HMOs have wrested market power from orthopedic surgeons and in doing so have imposed artificially low prices," says Thurston. "That means your surgeon has less of an incentive to find a quicker or less painful way to replace your hip or repair your shoulder."
In their paper Thurston and Clark explain that HMOs negotiate pre-set prices for orthopedic procedures, and if a surgeon refuses the price controls, the HMO will simply funnel its patients to other health care providers who have caved in to the low fees.
Because of this trend, the researchers say, the inflation-adjusted income of orthopedic surgeons dropped about 10 percent from 1991 to 1998, a time of otherwise robust economic growth in the U.S.
To be sure, no one is throwing a pity party for a group worried about its average salary slumping lower within the six-digit range. But Thurston emphasizes that the decline in compensation will have a more serious effect on patient care than it will on surgeons' net worths.
"This isn't about salaries -- it's about entrepreneurs and their incentives to create new products," he says. "In the past, if you could find a better way to do a hip replacement or a less invasive knee surgery, you could make a lot of money. Now the first thing that will happen is an HMO will negotiate your fee down. So why bother?"
Thurston explains that most of the innovations that have drastically improved orthopedic surgery in the past two decades have come from talented practicing physicians who sunk some of their surplus income into research and development.
"But if doctors are making less money and have less of a financial incentive to innovate, they'll have to sacrifice their research time for more practice time," he says."They become workers instead of innovators, using the same old techniques to make money day to day."
The researchers see other effects caused by the HMO-induced income decline. They predict orthopedic surgeons will begin taking early retirements, retraining into family practice or relocating to areas without a strong HMO influence.
The latter was the route Clark chose, moving from Utah to northern Indiana last year after he saw several health plans in Utah reduce their payments 50 percent.
"Most orthopedic surgeons are very busy people who are more concerned with helping patients than with developing strategies to deal with healthcare companies," he says. "Insurance companies will continue to reduce payments until enough surgeons leave the state that a shortage does develop."
Clark says he knows seven other orthopedic surgeons who quit practicing in Utah because of declining income in the past three years. There are 113 orthopedic surgeons on the rolls of the Utah Medical Association.
Clark believes the declining incomes of orthopedic surgeons and their consequent flight from the specialty will have an even more significant impact than stifling innovation.
"I predict that this decline will coincide with the entrance of the 'baby boom' generation into their sixth and seventh decades when their need for orthopedic services increases by as much as 600 percent," Clark says. "This potentially will result in a shortage of skilled providers."
Contact:
Norman Thurston, (801) 378-4883
Ron Clark, (219) 464-8581
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