Dynamic Chiropractic – June 15, 2014, Vol. 32, Issue 12

Hospitals React to Shifting Health Care Priorities

By Donald M. Petersen Jr., BS, HCD(hc), FICC(h), Publisher

Sometimes it seems as if hospital owners and administrators have one goal and one goal only: authorize as many procedures as possible on as many patients as they can, and then bill them at the highest rate they can get reimbursed for.

The reimbursement policies of the past have given hospitals a virtual blank check when it comes to surgeries and other forms of care.

But reimbursement trends are changing, and hospitals are adjusting accordingly. Part of this adjustment may open doors for doctors of chiropractic.

Joseph Gregory, an analyst specializing in surgical devices for the GlobalData consulting firm, notes: "Originally, insurers issued reimbursement payments as long as the hospital coded the (spinal fusion) procedure properly. Now, the payers require extensive documentation to validate the medical necessity of the procedure, including well-documented attempts at conservative care and radiographic imaging to record the source of pain."1

This trend to substantiate insurance reimbursement is just a precursor to what is coming under the Affordable Care Act and other cost-savings initiatives. Over the next few years, you will see a multitude of studies, announcements and policies that will motivate a movement toward more responsible health care expenditures. More insurers will look to pay a set amount, expecting hospitals to use that money more efficiently.

One recent study found that 42 percent of the 1,360,908 Medicare beneficiaries in 2009 received at least one service that had been "found to provide little to no clinical benefit on average, either in general or in specific clinical scenarios." The total dollars paid for these "low-value services" in 2009 totaled $8.5 billion.2 This is just a sample of what you will be reading more about in the media.

How are hospitals preparing for the new reimbursement environment? Over the past few years, hospitals have been buying up medical practices at a substantial rate. In some areas, as many as 70 percent of medical physicians are now hospital employees. As noted in an article last year in USA Today, "Hospitals across the country are buying more physician practices as they prepare to move away from fee-for-service reimbursements to a system that pays for treatments focusing on outcomes and cost containment."3

Hospitals are also taking advantage of the higher fees they can charge for physician services that used to be provided by independent doctors. The same MD can perform the same service, but if it's done in a hospital, they can add on a "facility fee," which costs Medicare an additional $1.5 billion a year. Some analysts feel this advantage may be short lived.

Medical physicians are selling their practices because they don't want the hassles that accompany reimbursement in today's world, something you can probably identify with. They are looking for a better lifestyle with much less pressure.

As cost-effectiveness takes center stage, more hospitals also will begin looking at doctors of chiropractic to join their staff. Some are already doing so. This could involve an offer to purchase your practice.

As the initial reports come in from various DCs, it is interesting to note how much information the hospitals have when they approach a doctor of chiropractic about joining the hospital. Hospitals are being somewhat selective, apparently basing their choices on established relationships with medical doctors and how efficiently the DC practices.

The potential to work at a hospital is probably not what most DCs were thinking when they graduated from chiropractic college; but this opportunity will give many DCs an option they may find to their benefit. (We will be looking to provide more information about the experiences doctors of chiropractic have when they join a hospital staff in future issues of Dynamic Chiropractic and DC Practice Insights.)

Chiropractic provides great value to the health care marketplace. Chiropractic care has proven time and again to be extremely cost effective while getting high marks in patient satisfaction. Now that cost is finally becoming a true issue, it is our time to shine. As the health care priorities shift, it is likely that hospitals will not be the only organizations looking to benefit from what DCs have to offer their patients.


  1. "Spinal Fusion Market Size to Suffer Amid Scrutiny and Reimbursement Changes, Says GlobalData Analyst." GlobalData Press Release. May 13, 2014.
  2. Schwartz AL, et al. Measuring low-value care in Medicare. JAMA Intern Med; epub ahead of print May 12, 2014.
  3. Osby L. "Hospitals Buying More Doctors' Practices." USA Today, Sept. 4, 2013.

Read more findings on my blog: http://blog.toyourhealth.com/wrblog/. You can also visit me on Facebook.

Click here for more information about Donald M. Petersen Jr., BS, HCD(hc), FICC(h), Publisher.


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