Spine

Health insurers look for ways to cut costs with back surgery

By JAY GREENE /August 26, 2018

  • Insurers adopt prior authorization programs to encourage alternative treatments, save money
  • Blue Cross, HAP and Priority Health have different approval criteria that continue to evolve
  • Back surgeons sometimes find it difficult to manage prior authorizations, but denial rates are low

Back surgery is one of the most overused types of surgery as well as the most common ailment that sends patients to doctors, chiropractors and physical therapists. More than $90 billion a year is spent on low-back pain alone.

On any given day, 31 million Americans experience low-back pain, and it is the leading cause of disability worldwide, according to the 2017 Global Burden of Disease study. Back pain also is one of the most common reasons for missed work.

Controlling costs is a major effort most health insurers are focusing on with patients who want back surgery. In Michigan, Blue Cross Blue Shield of Michigan, Blue Care Network, Priority Health and Health Alliance Plan have programs to ensure members have carefully weighed their options.

Nationally, more than 1.2 million spinal surgeries are performed each year, including spinal fusion and decompression, or discectomy, surgery, according to the National Center for Health Statistics. The fastest-growing types the past decade have been lumbar spinal fusion surgeries that range from $60,000 to $110,000 per procedure.

Some studies have shown that the back surgery failure rate, known as failed back syndrome, is as high as 50 percent. But most spine experts say one-third of patients will have successful outcomes, one-third will have no change and one-third will be worse off.

Since 2007, Priority Health has cut down on back surgery costs by requiring patients who have non-emergency surgery to consult with a rehabilitation doctor, or physiatrist, about treatment options before surgery, said John Fox, M.D., Priority’s medical director.

During the first year of the spine program, Priority had an $8 million reduction in costs. Surgery costs fell 24 percent and imaging 18 percent.

Over the past dozen years, health care costs have risen and the population Priority serves has nearly doubled, Fox said. “Our spine surgery rate was 4.1 per thousand in 2006 and today it’s 2.1 per thousand,” he said. “For the commercial population of just over 500,000, that translates into a cost savings of $36 million per year in avoided costs.”

 

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Photo: Jay Greene/Crain’s Detroit Business

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Josh Sandberg

Josh Sandberg is the President of Ortho Spine Partners and Partner for The De Angelis Group. He also serves as Co-Founder and Editor of OrthoSpineNews.

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