CONFIDENTIAL: Property of the American Academy of Orthopaedic Surgeons Contents may not be duplicated or reproduced without permission. Copyright 2012.

CONFIDENTIAL: Property of the American Academy of Orthopaedic Surgeons Contents may not be duplicated or reproduced without permission. Copyright 2012CONFIDENTIAL: Property of the American Academy of Orthopaedic Surgeons Contents may not be duplicated or reproduced without permission. Copyright 2012

Phase III: Hospital-Employed Orthopaedists and State

Societies Study

Prepared by DT Research LLCPrepared for AAOS Marketing Department and the Department of Society

Relations

March 2012

CONFIDENTIAL: Property of the American Academy of Orthopaedic Surgeons Contents may not be duplicated or reproduced without permission. Copyright 2012

2

The Department of Society Relations sought to investigate the impact of state orthopaedic societies (SOSs) and SOS membership in the lives of hospital-employed orthopaedists.

As a result, AAOS Marketing developed a multi-pronged study consisting of feedback from SOS leadership and State Society members:

Phase 1: 2011 Annual Meeting focus group among hospital-employed Fellows

Phase 2: Online survey of SOS leadership

Phase 3: Online survey of AAOS members

BACKGROUND AND OBJECTIVES


3

Phase 3 member survey is the subject of this presentation – Phase 1 and 2 findings are included where they overlap.

Phase 3 objectives:– Identify key programs/activities SOSs should develop to enhance

relationships with members– Confirm members’ opinions, needs, and level of satisfaction with their

SOSs– Determine opinions, needs of non-SOS members– Identify unmet needs– Determine likelihood of future SOS membership among existing and

current non-members– Confirm/uncover issues facing hospital-employed orthopaedists– Identify resources used by hospital-employed orthopaedists in contract

negotiations

BACKGROUND AND OBJECTIVES


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METHODOLOGY

AAOS emailed survey invitations to a random sample of 3,500 Active U.S. Fellows and Candidate Members

Emails included a link to complete the survey online

417 respondents completed surveys representing a 12% response rate

Results are based on 95% confidence level, +/-4.8 percentage points



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Employed by a hos-pital or hosp/ medi-cal foundation, 55%

Private practice, 27%

Salaried by educ institution, 9%

Co-manage hosp ortho dept, 2%

Other; 7%

Average age: 55

Average number of years in practice: 22 years

Respondent Practice SettingsN=417

Q1: Which of the following positions best describes your orthopaedic practice setting?

RESPONDENT CHARACTERISTICS


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HOSPITAL CONTRACTUAL ARRANGEMENTS


7

(N=205)

No direct con-tracting hassles with payor net-

works

No medical liabil-ity insurance

expense

No overhead expenses

A steady paycheck

Employee bene-fits

Reimburse reg/ leg not an issue

Access to large pt base

1

2

3

4

5

4.4 4.3 4.2 4.2 4.13.9 3.8

The most valuable benefits according to hospital-employed survey respondents reflect Annual Meeting focus group sentiments.

Q5: The following are potential benefits of hospital employment. Please rate their value to you (5=Very valuable -1 Not at all valuable).

BENEFITS OF BEING HOSPITAL-EMPLOYED


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(N=8)

Control over desig-nated surgical suites

Access to a large pa-tient base

Better management of ER call

Control over staffing Increased revenue Maintain private prac-tice revenue from

ancillaries

1.0

2.0

3.0

4.0

5.0

43.8

3.5 3.43.1

1.8

Co-managers value most control over their practice environments.

Q5: The following are potential benefits of co-managing a hospital ortho dept. Please rate their value to you (5=Very valuable -1 Not at all valuable)..

BENEFITS OF CO-MANAGING A HOSPITAL ORTHOPAEDIC DEPARTMENT


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Bureaucracy impedes de-cisions

Admin does not fully un-derstand how ortho practice

differs

No direct control over staffing

Spend more time than ex-pected on mtgs, operations,

admin

1

2

3

4

5

3.8

3.4 3.4

2.9

4

3.53.8

Hospital-Employed (N=221) Co-Managers (N=8)

Of the potential difficulties tested, both hospital-employed and co-manager respondents find that hospital bureaucracy and dealing with administration prove the most challenging.

Q6 & 8: The following are potential difficulties of (hospital employment/co-management.) Please rate the degree to which they have proven to be challenging to you (5=Very Challenging -1=Not at All Challenging).

CHALLENGES OF HOSPITAL ARRANGEMENTS


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Non-SOS Members (N=78)

Hospital Employed (N=227)

SOS Members (N=157) Co-manage Ortho Dept. (N=8)

1

2

3

4

54.2

4.0 3.9

3.5

Q3: Overall, how satisfied are you with this contractual arrangement (5=Very Satisfied - 1=Not at All Satisfied)?

SATISFACTION WITH CONTRACTUAL ARRANGEMENT

While many respondents obtained legal counsel to aid with hospital contract negotiations (130 mentions), there is a notable portion of respondents who did not (51 mentions). Nevertheless, respondents are generally satisfied with their contracts.


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• Hospital-employed orthopaedists may feel insulated from the repercussions of decreasing reimbursement models, and less engaged in legislative dialogue.

• While satisfied overall, hospital-employed respondents acknowledge difficulty in dealing with hospital bureaucracy and conflicts with administration.

• Contracted orthopaedists sought legal counsel, but many entered into their arrangements without any professional preparation.

CONCLUSIONSHOSPITAL CONTRACTUAL ARRANGEMENTS


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RELATIONSHIPS WITH STATE ORTHOPAEDIC SOCIETIES


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MEMBERSHIP IN STATE ORTHOPAEDIC SOCIETY

Membership in their State Society is nearly equal for both hospital-employed (67%) and non-hospital employed (70%) respondents. However, on average, non-hospital employed respondents are more satisfied than their hospital-employed physician counterparts. Further, a significant faction is “neutral” with regard to SOS membership.

Satisfaction with SOS Membership All SOS

Members (%)

Hospital-Employed (%)

Non-Hospital Employed (%)

Average satisfaction rating3.5 3.2 3.8

5-Very Satisfied16 8 24

431 27 36

3-Neutral42 51 33

26 7 5

1- Not at all Satisfied5 7 2

N 285 154 131Source: Q10 Overall, how satisfied are you with membership in your State Orthopaedic Society?


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Total (N=417) Current SOS Members (N=285)

Non-Hospital Employed (N=187)

Hospital-Employed (N=230)

Current Non-Members (N=132)

1

2

3

4

5

3.6

4.2

3.6 3.5

2.1

Q11 How likely are you to join or maintain membership in your SOS within the next 3 years (5= Very Likely- 1 =Not at all Likely)?


Current State Society members are more likely to maintain their membership in the next three years. However, those who are unlikely to maintain membership cite receiving adequate CME from other sources such as AAOS (64 mentions), hospital (32 mentions), or subspecialty (27 mentions) as reason.


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Priority of Medical Association Membership(1=Highest Priority)

All Respondents SOS Members Non-SOS Members

AAOS1.4 1.4 1.3

National Orthopaedic Subspecialty Society2.8 2.9 2.6

State Orthopaedic Society3.5 3.3 4.1

State Medical Society4.5 4.4 4.7

County Medical Society4.9 4.8 5.0

American Medical Association5.9 6.0 5.7

N 417 285 132Source: Q13 The following are six professional medical associations with an option to add a seventh. Please rank order from “1” to “7” in terms of priority of membership to you where “1” means “highest priority” and “7” means “lowest priority.”


Respondents prioritize membership in six associations (with an option to add a seventh). Membership in a SOS ranks in the middle, while AAOS consistently ranks first. Further, non-SOS members give higher overall priority to membership in a subspecialty society, and lower overall priority to SOS membership.


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IMPORTANCE OF SOS BENEFITS: (5=Very Important and 1=Not at All Important)

AllSOS

Members

SOS Leadership

Survey Respondents

Hospital-Employed

SOS Members

Non-Hospital Employed SOS

Members

Legislative advocacy 3.7 4.4 3.5 4.0

Solidarity with orthopaedic peers 3.5 4.0 3.3 3.8

Information on legislation and regulation changes 3.5 4.4 3.3 3.8

Networking 3.2 3.9 3.1 3.4

Scope of practice advocacy 3.1 4.1 3.0 3.3

Workers’ Compensation advocacy 3.1 4.0 2.8 3.3

Annual Meeting 3.0 4.0 2.8 3.1

Pay-for-call advocacy 2.8 3.2 2.7 3.0

CME 2.8 3.6 2.7 2.9

Mediation with third-party payors 2.6 2.8 2.3 2.8

Practice management education 2.5 3.1 2.3 2.6

Legal/ contract assistance 2.4 2.6 2.3 2.6

Job postings 2.2 2.1 2.3 2.0

N 193 111 110 83Source: Q14: Please rate the importance of the following benefits of membership in your SOS. SOS Leadership Survey Q8: Please rate the following member benefits

Legislative advocacy is the most important SOS benefit. Close behind are “solidarity with peers” and “information on changes in legislation and regulation.” Non-hospital employed SOS members find benefits related to reimbursement issues to be of greater importance.


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• Hospital employment of orthopaedists may not pose a near-term threat to SOS viability, as several current SOS members are likely to maintain their membership within the next three years.

• But non-hospital employed SOS members are more satisfied with SOS membership. And a significant faction of members are “neutral.”

• Orthopaedists who join professional organizations for CME may be disappointed with/ unlikely to join a SOS.

• The most important SOS benefit is legislative advocacy, placing membership in a SOS behind “educational” organizations such as the AAOS and orthopaedic subspecialty societies.

• There is a gap in perception of the relative importance of SOS member benefits between SOS leadership and members, especially hospital-employed members.

CONCLUSIONSRELATIONSHIPS WITH STATE ORTHOPAEDIC SOCIETIES


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CHALLENGES TO THE ORTHOPAEDIC PRACTICE


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IMPACT OF ENVIRONMENTAL PRESSURES: (5=Significant Impact, 1=No Impact at All)

AAOS Member Survey

Respondents

SOS Leadership Survey

Respondents

Hospital-Employed

Respondents

Non-Hospital Employed

Respondents

Uncertainty of Medicare reimbursement rates 3.9 4.4 3.7 4.1

New ICD-10 coding 3.7 3.8 3.6 3.7

Payor requirements for evidence-based practice 3.6 3.6 3.5 3.6

Medicare Accountable Care Organizations (ACOs) 3.5 3.6 3.5 3.5

Data collection for clinical outcomes 3.4 3.4 3.4 3.4

Medical liability insurance rates 2.7 3.3 2.5 3.0

Changes to “Stark” self-referral and fraud and abuse laws 2.4 3.6 2.3 2.7

Pressures to become hospital/ academic center employees

2.4 3.9 2.2 2.8

Pressures to affiliate with large group practices 2.4 3.7 2.1 2.7N 379 111 217 162

Source: Q17 Within the next three years to what extent will the following environmental pressures impact your practice? SOS Leadership Survey Q11. To what extent will the following pressures impact orthos in your state?

Most respondents concur that Medicare reimbursement rates will have the most impact on orthopaedic practices within the next three years. In general, the top five anticipated environmental pressures are similar, regardless of respondent type. However, hospital-employed respondents are less inclined to rate “liability insurance rates,” “Stark,” and pressures to affiliate as challenges that will significantly impact their practices.

IMPACT OF ENVIRONMENTAL PRESSURES


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IMPACT OF ENVIRONMENTAL PRESSURES: (5=Significant Impact, 1=No Impact at All)

SOS Members Non-SOS Members

Uncertainty of Medicare reimbursement rates 4.1 3.4

New ICD-10 coding 3.8 3.3

Payor requirements for evidence-based practice 3.7 3.3

Medicare Accountable Care Organizations (ACOs) 3.6 3.3

Data collection for clinical outcomes 3.5 3.1

Medical liability insurance rates 2.8 2.6Changes to “Stark” self-referral and fraud and abuse laws

2.6 2.1

Pressures to become hospital/ academic center employees

2.7 1.9

Pressures to affiliate with large group practices 2.6 2.0

N 285 114Source: Q17 Within the next three years to what extent will the following environmental pressures impact your practice? SOS Leadership Survey Q11. To what extent will the following pressures impact orthos in your state?

On virtually every issue, SOS Members expect greater impact on their practices, compared to non-SOS members:

IMPACT OF ENVIRONMENTAL PRESSURES


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Hospital-Employed (%)

Non-Hospital Employed (%)

“ObamaCare”/ Reimbursement models 19 24Aging orthos/ partners 5 4

Insufficient hospital reimbursement 5 0

EMR/EHR implementation/ Requirements 4 7

Retirement 4 7Burdens imposed by regulatory rules/ requirements

1 5

No Other Challenges 5 3Total Mentions 115 91

Source: Q18 What other challenges will impact your specific orthopaedic practice within the next three years?

ADDITIONAL PRESSURES/CHALLENGES

Both hospital-employed and non-hospital employed physicians fear “ObamaCare”/ reimbursement models pose a challenge to the future of their practice.


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• Regardless of practice setting or SOS membership status, income optimization is a primary challenge for these respondents. This challenge manifests as Medicare rate uncertainty, coding and evidence-based practice requirements, or ACO implementation.

• Although income optimization and reimbursement are issues for all, the degree to which orthopaedists experience environmental pressures varies by respondent segment, with SOS members and non-hospital employed respondents expecting greater impact on their practices.

CONCLUSIONSCHALLENGES TO THE ORTHOPAEDIC PRACTICE


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RESPONSES TO CHALLENGES


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The table on the following slide lists specific issues respondents could face and the organization-AAOS, SOS, Both or Neither-from which they would seek assistance.

In every instance the proportion of respondents who would seek out the AAOS alone is greater than the proportion who would seek assistance from a SOS alone.

Between 20% and 38% of respondents, depending on the issue, would consult both organizations.

Between 43% and 50% of respondents would consult neither organization for education on any type of contract negotiation.

SEEKING ASSISTANCE


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Meeting Specific Challenges: Organizations Respondents Would Utilize

AAOS (%)

SOS (%)

Both (%)

Neither (%)

N

Education on the impact of changes/reforms in health care on member practices, and tactics for coping with these changes

51 <1 38 10 407

Courses/ product offerings specific to hospital-employed orthopaedists

44 2 27 26 404

Practice management programs/ services 33 3 36 27 404

Education on contract negotiation for co-management of a hospital orthopaedic department

31 4 22 44 399

Education on establishing/participating in an ACO 31 4 34 32 399

Education on negotiation of a hospital employment contract

30 3 24 43 403

Education on dissolution of contractual relationships 28 3 21 47 398

Education on contract negotiation for joining a group practice

24 5 20 50 403

Mediation of billing problems with carriers and bill review companies

19 15 24 42 404

Source: Q19 The following are potential measures that the American Academy of Orthopaedic Surgeons or your State Orthopaedic Society could take to assist you in meeting potential challenges. From which organization are you likely to seek assistance?


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Requested Product Offerings Specific to Hospital-Employed Orthopaedists

Hospital-Employed

(%)


(%)

Contract Negotiation 17 10

Working with Administration/ managing expectations, conflicts 8 6

Management/expansion/ marketing a hospital-employed practice 6 0

Salary/reimbursement data 6 0

Costs vs. outcomes of devices/imaging/procedures 5 0Call responsibility/payment 5 0

None 11 10

Total Mentions 65 52Source: Q20 Please specify the courses and product offerings specific to hospital-employed orthopaedists that would be of interest to you.

NEEDS AND REQUIREMENTS Both hospital-employed and non-hospital employed respondents request courses on contract negotiation and on working with hospital administration. Hospital-employed respondents are also interested in database development:

•Salary/reimbursement data•Costs vs. outcomes of devices/ imaging/ procedures


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Requested Practice Management Programs and Services

Hospital-Employed

(%)


(%)

ICD-10 coding/reimbursement optimization 14 15

Contract/fee negotiation issues 11 10

Personnel/PA management 8 0

Management of: ortho dept./ clinic/ solo practice/ group practices 6 5

Income: reimbursement/ compensation data 6 0

Development of ACOs 0 5

Practice efficiencies 0 5

Total Mentions 36 41Source: Q21 Please specify the practice management programs and services that would be of interest to you.

NEEDS AND REQUIREMENTS Respondents’ most frequent practice management program requests involve income optimization. Programs on “coding/ reimbursement optimization” and “contract/ fee negotiation” receive the most respondent mentions. Both hospital-employed and non-hospital employed respondents request programs on management in a variety of practice settings.


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• AAOS emerges as the “go-to” organization for education to address environmental pressures, particularly from an overall perspective. But SOSs may better serve in addressing practice-specific issues.

• The findings suggest the potential for niche programs/services to address the needs of smaller factions of hospital-employed and non-hospital employed orthopaedists who would seek assistance from either organization.

CONCLUSIONSRESPONSES TO CHALLENGES


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RECOMMENDATIONS


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The following recommendations are suggestions based on the current research. AAOS and SOS managements must take into consideration economic and other organizational issues beyond the

scope of this research to determine their feasibility and suitability for each organization.

SOSs may consider providing mediation services with insurance carriers and bill review companies. Although it is of minor importance in relation to a SOS’s advocacy benefits, it is a service that addresses the needs of its non-hospital employed member base.

There is a segment of both the hospital-employed and non-hospital employed respondents who request courses/ products on contract negotiation and who would likely avail themselves of these services for initial or re-negotiated contracts. These product offerings might also prove useful to respondents who used no outside resources in hospital contracting.

RECOMMENDATIONS


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Some respondents acknowledge they discussed their upcoming contracts with other physicians and friends who had experience. Consider an interactive panel discussion (perhaps online?) of physicians who are hospital-employed and/or co-manage hospital orthopaedic departments to provide input into the contracting process, the process of moving into hospital employment from private practice, and their experiences with their contractual arrangements.

There is a faction of hospital-employed orthopaedists who request courses on practicing in a hospital-based environment: implementation of ICD-10 and EMR, call responsibility and payment, management/ expansion/ marketing of a hospital-based practice.

RECOMMENDATIONS


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Consider courses for both the hospital-employed and co-managers of hospital orthopaedic departments on working with hospital administration, understanding differences in budgeting, revenue/expense generation, equipment, and staffing required in a hospital setting, etc.

SOSs, or the AAOS in conjunction with state societies, may consider research among administrators/ staff of hospital systems which employ orthopaedists to investigate their experiences. Do administrators need to be educated regarding the nuances of working with orthopaedic surgeons vs. primary care physicians? Are there ways orthopaedist contracts can be customized? Do orthopaedists require better preparation for this experience?

RECOMMENDATIONS


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Hospital-employed orthopaedists in general may need an organization to connect the dots for them to explain how they are at least tangentially impacted by physician and hospital legislation and regulation. SOSs may consider tracking and communicating changes in hospital legislation that are potentially impactful to hospital-employed orthopaedists.

A segment of hospital-employed respondents request development of databases to access information on salaries/reimbursement, productivity data, and the cost-benefit of medical devices and procedures. Medical Group Management Association produces an annual Physician Compensation and Productivity Survey. It is unknown from the research if there is a general lack of awareness of these data or if they are insufficient for orthopaedist use. The Academy and/or SOSs may wish to determine how/if these data could be made useful for member contract negotiations.

RECOMMENDATIONS

CONFIDENTIAL: Property of the American Academy of Orthopaedic Surgeons Contents may not be duplicated or reproduced without permission. Copyright 2012.

Documents

objectives slide

online survey of aaos

lives of hospital

orthopaedic practice

nonsos members

survey respondents

fellows phase

members opinions