Surgeons' response to reimbursement changes for alternative procedures: Evidence from spine fusion in the U.S.

Abstract

Spinal fusion is the highest operating room expense in the U.S. and the performed procedure depends largely on surgeon preference. We use national claims data for 2010–2014 to study changes in the relative frequency of substitutable spinal fusion procedures, following a one-time cut in Medicare reimbursement fees that switched the ranking of the two procedures with the highest surgical fees. Relative to lower-fee alternatives with better clinical outcomes, patients were 6.3% more likely to receive the highest-fee procedure after the policy change. We find no evidence of cost savings following the reimbursement change.