Surgeons could be the next medical specialty up for grabs as Triangle hospitals carve up the local health care market among themselves.
Rex Hospital in Raleigh has set the tone by announcing its own surgery program, which will limit hospital access by surgeons it doesn’t employ.
Rex’s program will assign four staff surgeons to treat patients coming into the emergency room, typically people with appendicitis, gallstones and other urgent medical problems that require operations. Previously Rex had relied on self-employed surgeons to handle the overnight shift rotations.
As a result of losing the overnight shifts, local surgeons will lose a lucrative source of extra income – in excess of $50,000 in a good year – at a time when the expense of running a medical practice is rising and insurance reimbursements are shrinking.
The pressures are likely to cause some surgeons to ditch private practice and opt for the financial security in hospital employment. Six general surgeons stopped treating emergency patients at Rex last month when the hospital created its acute care surgery program; one has already taken a job with Rex as a staff surgeon.
The staff surgeons, called “surgicalists” in hospital jargon, are part of a broader trend in which hospitals also employ family doctors, cardiologists, neurosurgeons and oncologists to capture patients and maximize proceeds.
“This is all about money; it’s more empire-building,” said David Zeiler, an independent surgeon with Triangle Surgical Associates in Cary. “They’re scrambling for every nickel. They’re looking under the sofa.”
Zeiler’s partner, Lemuel Yerby III, estimates that the same procedure will cost patients 20 to 30 percent more when performed by a surgicalist. The reason: Hospitals have the leverage to negotiate higher reimbursements from insurance companies, and hospitals tack on extra facilities charges.
The surgicalist trend has been around for some time and is on the rise around the country. An early adopter, WakeMed Health and Hospitals, has been using round-the-clock staff surgeons since 2002 at its Raleigh campus and currently employs 12 surgicalists there. But WakeMed’s Cary hospital still relies on about two dozen community surgeons, including Zeiler and Yerby, to work the overnight shifts.
Jeff Abrams, one of WakeMed’s surgicalists in Raleigh, said relying on staff surgeons makes particular sense for WakeMed because it’s Wake County’s only Level 1 trauma center and sees a high volume of patients who arrive in bad shape. Abrams added that WakeMed sees more than the average number of uninsured patients, so that under a traditional model, independent surgeons were being asked to do more work for less pay.
“That’s the advantage of having an in-house presence,” Abrams said. “Most of the nights you’re on call here you’re up at night and operating.”
Thomas Ricketts, professor of health policy and management at the UNC School of Medicine, said the surgicalist model is often hyped “by consultants and folks selling a ‘system’ or negotiating a contract for a set of practitioners.” A program’s actual quality depends on the way it’s run by a hospital, he said.
Linda Butler, chief medical officer at Rex, said staff surgeons are a response to a changing health care environment in which hospitals will be rewarded for improving efficiency and quality of care, and reducing hospital stays and readmissions. These are the primary punishment-and-reward mechanisms the federal Medicare system and private insurers are adopting to try to control runaway health care costs.
She said Rex would initially lose money on its surgicalist program and described the switch as “more patient-centered.”
Butler said having staff surgeons available on site will mean that emergency room patients won’t have to wait for a local surgeon to finish seeing a patient at the office, or to get out of bed to drive to the hospital in the middle of the night.
“It’s a delay all the way through,” Butler said. “For many reasons, they can’t get here right away.”
An overnight shift at Rex typically started at 7 a.m. and ended at 7 a.m. the next day. That meant moonlighting surgeons were logging 32-hour stints several times a month, because they still had to show up for a full day at the office after pulling an all-nighter.
Under the new program, Rex surgicalists are working 12-hour shifts for seven days straight, then take seven days off, so that they get 26 weeks off a year.
Zeiler, 63, said delays were rare. He said his drive from his home in Holly Springs to Rex takes 20 minutes, and to WakeMed Cary takes 10 minutes, but the commutes would be twice as long during rush hour.
Zeiler said he almost always arrives at the hospital before the patient is ready for the operating room, or before the operating room is ready for a patient.
When freelancing on an overnight shift, local surgeons would take whatever mix of patients came into the ER. They could get paid nothing if the patient was uninsured. Or they could get extra fees if an out-of-state insured patient was receiving health care outside his insurance network, Yerby said.
“You don’t ask about insurance, and you don’t get to pick the patients,” Yerby said. “It’s the luck of the draw, basically.”
The surgicalist, by comparison, is paid a salary, not by piecework. At WakeMed and other hospitals, surgicalists are also paid bonuses for exceeding set surgery volumes.
Early on in the surgicalist movement, some hospitals hired their own surgeons because doctor shortages in their regions made it difficult to staff ER departments, Ricketts said. Some surgeons are relieved to give up the physical demands of overnight shifts, he said.
But modern health care pressures supplied financial incentives.
Protecting market share
A 2013 issue of AAOS Now, a publication of the American Academy of Orthopaedic Surgeons, estimated that a hospital surgicalist program could increase ER surgeries by 50 percent, thereby boosting revenue. At the same time, it would save hospitals money by reducing patients’ lengths of stay.
A 2012 study published by the American Medical Association, and co-authored by the surgery department at UNC-Chapel Hill’s School of Medicine, reached similar conclusions.
“Direct employment also gives hospitals the freedom to impose additional requirements on the physician,” the AMA study states, “such as requiring employed physicians to refer (patients) to the hospital’s service lines instead of other entities.
“This insulates the hospital’s market share and guarantees use of the facility by physicians,” said the study, which was written by UNC’s Ricketts and others.
Zeiler, Yerby and other community surgeons will be able to continue sending their regular patients for elective surgery to Rex, as they have been doing for years. Until Rex started its surgicalist program, community surgeons were required to work the ER overnight shifts as a condition of having privileges to perform elective surgeries.
But some of the general surgeons are still smarting from the shock of losing their overnight shifts.
Yerby, 65, said operating on an ER patient typically generates about $1,000 for a surgeon on an overnight shift, and some years he would log 60 operations a year at Rex.
“If you will, they bought my 60 patients – without paying me for it,” Yerby said. “Do you think I have a great loyalty to Rex?
“I was on staff 20 years, and with a one-sentence letter, they said, ‘Go away.’ So I’m not particularly interested in taking my patients there.”