The value of $85.9 billion spent on the treatment of low back pain in 2005 was not just for medical management but also included the costs of alternative medicine and chiropractic care. Many out-of-pocket payments are not captured in the growth of patients with spinal problems, with Medicare data reimbursing for only a few chiropractic procedures and codes. Looking at just one of the chiropractic CPT codes such as manipulative treatment of 3 to 4 regions of the spine, represented by CPT 98941, we see an increase of 8.3 million encounters since 1999 with 2009 estimated payments to chiropractors exceeding $471.5 million for this 1 procedure CPT code alone (Figure 3). In comparison, Medicare’s physician payments for the entire field of neurosurgery was $570 million in 2007, which includes all cranial, pediatric, vascular, functional, stereotactic, pain, peripheral nerve, and other procedures our neurosurgical colleagues perform.14
It has been estimated that Medicare enrolls > 10 000 new Americans per day. This is reflected in the number of new level 4 outpatient clinic visits (CPT 99244), which has risen by > 3 million patients in 2009 compared with 1999 (Table 1). Because the growing numbers of Medicare patients are using nonsurgical treatment options more than spinal surgery, it would appear that surgery may be underused on the basis of these trends. However, the criticisms and concerns about the unsustainable rise in healthcare costs are not about the patient use of surgery but rather the overall high costs of spinal surgery relative to the other nonsurgical modalities available.
WE ARE CONCERNED ABOUT COSTS, NOT USE
Given the exponentially higher growth and use of nonsurgical treatments over spinal surgery, we have to question why there is so much more scrutiny of surgical treatments. Although the general public has the perception that physicians are overpaid and are the main drivers of healthcare costs, < 5% of the healthcare dollar actually goes to pay physicians for their services. However, the downstream revenue of surgery to others in the healthcare system is immense.
Spinal fusion surgery has been a principal driver of the rapid increase in inpatient stays per population among the elderly.15 Of the $207.6 billion in nonelderly patient aggregate hospital costs for inpatient stays in 2009, spinal fusion surgeries alone accounted for hospital payments of $7.9 billion, or almost 4% of the costs. In the nonelderly, this represented a 14.9% average annual growth, whereas in the elderly, this was a 19% average annual growth in inpatient hospital costs.15 So although it may not be correct that spinal surgery is being overused, spinal surgery costs are increasing significantly, and our concern about use is really related to the costs.
Healthcare costs are increasing, and according to Centers for Medicare & Medicaid Services, the average costs per beneficiary in 1960 was $151, grew to $605 per beneficiary by 1975, rose to $4781 per beneficiary by 2000, and now exceeds $8000 per beneficiary. However, this increase was driven by price in per capita spending, not by increased use by a growing number of patients. An analysis by the Health Care Cost Institute looked at aggregate data from payers and noted that increases in per capita healthcare expenditures from 2009 to 2010 were driven primarily by higher prices, not by the use or intensity (mix) of services.16
However, costs per beneficiary of physician services are declining. That is, physicians are being paid less over time to provide the same services to patients, thus becoming more cost-effective. On the basis of CPT codes from 1997 to 2009, the professional payment to surgeons for spinal surgery has been declining (Table 2). Surgeons in 2009 were actually being paid less per patient than they were in 1997, and any increase in physician compensation is related to increased use with lower cost/payment per patient. For example, a surgeon performing a PLIF and coding this procedure with CPT 22630 would be paid $1705 in 1997 and only $1433 for the same procedure in 2009, with these values not adjusted for inflation. The increases seen in physician compensation have been tied to an increased number of patients and their use of health care. Physicians are not being overpaid but rather overworked and underpaid for their work compared with the past.
PHYSICIAN DECISIONS DRIVE HEALTHCARE COSTS
Although payments to physicians performing spinal surgery are not themselves the increased cost per capita spending in health care, decisions made by surgeons play a key role in our rising healthcare costs. The massive cost increase comes from choices of surgeons regarding surgical equipment and drugs, radiology imaging, and hospital charges during the coordination of patient care. In spinal fusion surgery, the economic incentives for more complex surgeries lie not with the surgeon but with the company that manufactures the spinal implants catering to the surgeon’s preferences.
For example, when a surgeon performs a single-level posterior lumbar instrumentation such as at L4-L5 with placement of 4 pedicle screws, the surgeon can expect compensation by Medicare of $746.95 based on 2010 reimbursements for CPT code 22840, with the spinal implant manufacturer expecting an estimated average of $6728 for the cost of the implants based on 2010 prices. If the surgeon decides to perform a complex spinal fusion such as placing spinal hardware at 6 levels (T12-L5) instead of just 2 levels, the surgeon can expect an additional $1.08 for putting in an additional 8 pedicle screws. Because the average reported additional time to do this based on CPT code 22842 was 105 minutes, the surgeon is being paid an additional 62 cents per hour, or 14 cents per additional screw, for his or her effort compared with just doing a single-level instrumentation. This would not be considered an economic incentive to implant spinal hardware unnecessarily. In graphic contrast to this, the manufacturer of the screws is compensated an additional $13 456 for the additional 8 pedicle screws and set screws used. If a surgeon performs even more complex spinal fusions such as placing spinal hardware at 12 levels (T6-S1) instead of just at L4-L5, the surgical fee increases by $2.27 for CPT 22843 vs CPT 22840, whereas the implant manufacturer will see additional average payments of $33 640 for the additional 20 screws used.
This disparity in healthcare costs is also seen in other aspects in the United States compared with other developed countries. Although physician compensation per patient treated is not significantly different in the United States compared with other developed countries, this is not the same for the costs of drugs, devices, hospital charges, and other charges, which lead to the large differences in healthcare spending per Gross Domestic Product. The United States has much higher prescription drug prices than other countries around the world. An example can be seen in the name-brand drug Lipitor used to treat high cholesterol or radiology studies such as computed tomographic scans of the head (Figure 4). Choices made by the physician to write a prescription or to order a scan have significant implications in contributing to the costs of health care.
Although development costs of drugs and new technology have been cited as contributors to their high costs in the United States, this does not apply to daily hospital charges, which are also significantly higher in the United States than in other developed countries (Figure 4). This speaks to the complexity of the US healthcare system and the highly regulated environment in which we practice, with the higher associated costs. This has led to an explosive growth in hospital administration, with Cowan17 in 2009 noting that from 1970 to 2004, there was a 2753% increase in the number of hospital administrators compared with a 156% increase in the number of physicians (Figure 5). The costs for hospital administrators alone account for 7% of the more than $2 trillion spent for health care and rivaled the amount spent in the United States on pharmaceutical drugs.18
All of the aforementioned factors are important contributors to the noticeable increase in healthcare costs, and from the evidence, it is safe to say that these price increases have had larger impacts on US healthcare costs than the use of complex spinal surgeries to help patients. However, because only physicians can practice medicine and write prescriptions and perform surgery, there is intense scrutiny of the choices we make to control the future use of spinal surgery and the costs associated with it.
LONG TERM: COST VS BENEFIT
The significant costs associated with the use of spinal surgery to treat prevalent conditions such as lumbar spondylosis have led to the development of payer policies to temper the rise in healthcare use that appear to conflict with local standard of care and clinical guidelines.19 Thus, as neurosurgeons, we find ourselves challenged to provide our patients with what we believe to be the most appropriate and beneficial care in an increasingly difficult financial environment with decisions increasingly influenced by the conflicting interests of government, hospitals, and insurers.
These conflicts are debated with evidence-based medicine, which has superseded the prior concepts of standard of care and the respectable minority practicing the “art of medicine.” The data extracted from the literature are frequently the key in assessing the delivery of health care in hospitals and community settings, and compliance with guidelines is now a surrogate analysis of a physician’s effectiveness in providing treatment.19 However, a review of evidence-based guidelines on the use of spinal surgery such as fusion for the treatment of chronic low back pain noted inconsistencies across guidelines and policies that were government sponsored or developed by specialty societies.19 This heterogeneity in the assessment of the literature was more pervasive in the medical payer policies owing to variations in the literature cited and transparency of the development process.19 Unfortunately, concerns for healthcare costs have also affected the resources available for clinical research, leading to a decline in high-quality studies used for the development of policies and guidelines.20
Because large-scale randomized controlled studies to analyze all aspects of the utility of spinal surgery are not practical, efforts have been made by our national leaders in neurosurgery such as registry development through the NeuroPoint Alliance. Early work on lumbar stenosis showed that the long-term value of spinal surgery far outweighs its cost and highlights the improved cost-to-benefit ratio of surgery compared with medical management.21 In lumbar stenosis, if we look at pure costs alone, we would assume that medical management was better than surgery because the direct 1-year cost of medical management of lumbar stenosis is $9350 and the same cost for a lumbar laminectomy is $24 716. However, although the cost of surgery is approximately 2.5 times higher than that of medical management, surgery was 5 times more effective than medical management at effectively treating patients with lumbar stenosis.21 On the basis of the benefit to the patient, as measured in quality-added life-years gained, medical management per quality-added life-year was much more costly at $95 500 vs surgery with a lumbar laminectomy at $33 700. In other words, spinal surgery is almost 3 times more valuable overall compared with medical management techniques used to treat lumbar stenosis.
Although certain individuals may believe that it is the economic incentives to the surgeon to perform more complex spinal surgeries that are driving the increases in spinal care costs, and potentially even healthcare costs as a whole, this is simply not the case. Procedures such as ESIs, PT, and chiropractic care have had far greater increases in the overall use in spinal care in recent years, and on the basis of the fee-for-service system of CPT coding notes, physicians are actually receiving lower compensation per patient now than they were for performing the same procedures in 1997. The increase in costs can be attributed to the increases in the prices of medical equipment, drugs, and tests such as scanning and imaging and in our regulatory burden and growing administrative costs. However, surgeons play a key role and must be competent in system-based practice as we continue our role as advocates for our patients. This includes being proactive and participating in our American Association of Neurological Surgeons/Congress of Neurological Surgeons neurosurgery registries to address misperceptions such as focusing on the higher cost of surgery for lumbar stenosis without noting the greater benefits compared with medical management techniques. Surgery is not something malignant in spinal care; in fact, it may just be the best practice at the moment. We need to participate in data collection efforts and to support our national society leaders to help maintain access to beneficial surgical care for our patients, and we must help protect the future use of effective spine surgery for the benefit of our patients.
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The authors have no personal financial or institutional interest in any of the drugs, materials, or devices described in this article.
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Copyright © by the Congress of Neurological Surgeons
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