Why the OR Just Doesn't Pay

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Clinicians in virtually every medical and surgical specialty would have little trouble citing services for which they considered third-party reimbursement woefully inadequate for the time involved.

 

Medicare reductions in payments for commonly performed procedures have forced physicians to change their practices so that they can pay for ever-increasing office expenses and still make a decent living.

 

This new economic reality was the focus of an enlightening talk at the recent annual meeting of the American Urological Association in Anaheim, Calif. Paul Brower, MD, CEO of Orange County (Calif.) Urology Associates, observed that by manipulating relative value units and place of service, Medicare has successfully shifted procedures to the office from the more expensive hospital. Dr. Brower cited a study (J Urol. 2004;172:1958-1962) showing that between 1995 and 2004, reimbursement for evaluation and management (E&M) codes increased by 51% while surgical fees decreased by 28%.

 

Reimbursement for office procedures has risen even more than the increase in E&M codes, he observed. During the past five years, urologists' incomes have come under tremendous pressure, he reported, adding that costs associated with running practices have risen and reimbursements have fallen.

 

He concluded that the majority of urologists' income is derived from the office (85% for his group practice) and that the system rewards urologists who stay in the office seeing patients and doing procedures—which is ironic when you consider that urologists are surgeons.

 

Dr. Brower cited the financial folly of assisting in a surgical procedure at the hospital—a half-day commitment for which the doctor is paid $175. The doctor could earn many times that amount by staying in the office, he said. He did not advocate that urologists stop operating, only that they use their time wisely, such as not scheduling hospital surgical cases in the middle of the day.

 

Dr. Brower made good sense, but I wonder what the effect would be if most urologists took his advice. Would it take longer for patients to get hospital-based procedures such as radical prostatectomies because urologists prefer to spend their time in the office? Long term, might spending less time in the OR dull certain surgical skills?

 

Given the costs of maintaining a viable practice, urologists are justified in doing what is economically feasible, but they should not forsake the necessary art of the surgeon.

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