Financial Pressures Threaten Private Orthopedic Practices and Patient Access

Orthopedic surgeons, integral to the U.S. healthcare system, perform over 1 million elective joint arthroplasty procedures annually, predominantly benefiting Medicare patients. Their role in restoring mobility and alleviating pain emphasizes a patient-centered, value-based care approach.

However, private practice orthopedic surgeons confront increasing financial challenges due to declining reimbursement rates from Medicaid and Medicare, which often do not cover the actual costs of care. This financial strain threatens the sustainability of private practices and limits patient access, as many surgeons reduce Medicaid and Medicare caseloads or opt out entirely. Medicaid reimbursement rates vary by state and typically fall below 60% of Medicare rates, placing further pressure on physicians who must absorb losses without access to supplemental funding available to larger healthcare organizations. Hospitals benefit from the Upper Payment Limit (UPL), a federal regulation allowing additional Medicaid payments up to Medicare levels, providing them a critical financial buffer. Private practices lack access to UPL subsidies, creating an uneven reimbursement landscape that disadvantages independent providers.

The financial imbalance forces private orthopedic surgeons into ethical dilemmas, weighing the duty to care for all patients against operational viability. Employed physicians also face challenges as Medicaid's lower reimbursement impacts available resources, compensation, and practice growth. The consolidation of orthopedic services into larger systems, driven by these economic pressures, reduces patient options and strains the healthcare infrastructure.

Policy reforms are required to increase Medicaid reimbursement rates to reflect true care costs, offer financial support and subsidies to private practices, and improve transparency around funding mechanisms like UPL. Without such interventions, the decline of private orthopedic practice will continue, diminishing access to quality care for Medicare and Medicaid populations and undermining the government's healthcare safety net.