November 28, 2022

Surgery needs a new pay model, free from incentives for more procedures

4 min read

How will my surgeon get paid? That’s a question few people ask as they think about having surgery. But it is worth asking, and the answer should factor into decision-making.

For most surgeons, the answer is a compensation model that incentivizes more surgery — and bigger surgery — making it hard to ignore the dollar signs attached to these procedures.

About 15 million Americans have surgery each year, and up to one-quarter of these operations are deemed unnecessary. Not only does this present grave concerns for patients’ well-being, but it is also an enormous drain on the medical system. More surgeries — and more extensive surgeries — mean more complications. Infections occur in 2% to 3% of surgeries, so eliminating unneeded surgeries would prevent more than 90,000 post-surgical wound infections a year.

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You’re probably already questioning the ethics: Yes, physicians take the Hippocratic oath vowing to do no harm. Yet a majority of surgeons are benchmarked and paid according to their accumulated relative value unit (RVU). These serve as a proxy measurement to gauge the amount and expertise of physician work, and clinical and nonclinical resources needed for each procedure.

Physicians once charged different prices for the same procedures, with no standardization. Medicare would use a customary, prevailing, and usual fee scale based on what was being charged by doctors in different regions of the country for each procedure, which private insurers then adopted. In 1992, the Centers for Medicare and Medicaid Services and private insurers started to tie reimbursement to effort in a more standardized fashion. The federal government, with help from the American Medical Association, created the relative value unit (RVU) scale to determine how much physicians are paid per procedure.

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At the time, RVUs may have seemed like a sensible way to boost efficiency in a medical system fraught with redundancy. The busier and harder-working the doctor, the more money they would receive. But this policy has incentivized physicians — and the hospitals that employ them — to perform more procedures and surgeries. Surgeons aren’t the only ones tied to this model. Over half of all physicians in any area of medicine are to some extent paid by RVUs.

Simply put, what most surgeons take home at the end of the day became — and still is — directly tied to the types and quantities of surgeries they perform.

Here’s an example. Say you have a herniated disk that requires surgery. There are two options: a herniated disk operation, called a discectomy, and lumbar spine fusion. For the discectomy, your surgeon accrues approximately one-quarter of the RVUs they could get performing the lumbar spine fusion. The discectomy takes 45 to 90 minutes and you’ll likely leave the same day. The fusion can take more than two hours, and you may have to stay several nights in the hospital.

For the equivalent RVUs — meaning take-home pay — a spine surgeon can spend the entire day performing four discectomies, or complete one lumbar fusion and be done by 10 a.m. But what’s better for you? Discectomy is a less invasive surgery and sometimes the better option. But in the current payment model, surgeons are incentivized to suggest the longer and bigger surgery.

It’s not surprising that the number of lumbar fusions increased steadily among people covered by Medicare between 2004 and 2009. Medicare spending on this surgery increased 500% over that time period, and rates of these surgeries continue to rise.

To be sure, changes in reimbursement are not solely to blame for the rise in lumbar fusions. Other factors, such as lack of scientific evidence about which lumbar procedures have the best outcome, improvements in technology and instrumentation, differences in clinical training, and professional opinion also contribute.

The compensation model centered around RVUs is well-known among surgeons and is frequently discussed offline as well as in professional bulletins. But few speak publicly about it, even those with a moral compass.

Change starts with exposing the flaws. Experts are urging Medicare to change. That will require a coordinated effort among physicians, government, health care systems, insurance agencies, and the patients all of these entities are supposed to be serving.

Given how health care works in the U.S., solutions will be evasive, imperfect, and hard to craft. The incentives surgeons receive need to support what is in the best interest of their patients, as doctors all pledge to uphold in the Hippocratic oath. A risk-sharing model between the doctor, the hospital, and the insurance carrier could reward good patient outcomes, regardless of surgical or nonsurgical management. This would necessitate an agreement of what outcomes are being measured and how they are tracked.

There are also some models that incentivize doctors based on other milestones like patient satisfaction scores, low surgical infections, and dictating cases in a timely fashion for instance. Changing to risk sharing models and getting all of the stakeholders to agree on a new model is a lot easier said than done, but it is possible — and necessary. Throughout medicine, moving to align the interests of all parties involved will go a long way to improving patient outcomes, which really should be the ultimate key to any medical care.

Simone Betchen is a neurosurgeon at Maimonides Medical Center in Brooklyn, N.Y.

Surgery needs a new pay model, free from incentives to do more procedures

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