FOLLOW THE MONEY Paul Ruggieri, MD, FACS, is fed up with what's driving surgery.

SURGEON SCRIBE Surgeon's Book Blasts the Big Business of Surgery

When general surgeon Paul Ruggieri, MD, FACS, wrote Confessions of a Surgeon, a blunt look at what goes on behind the closed doors of ORs, he planned to include a chapter on the money side of surgery. But that chapter became The Cost of Cutting, his new 320-page paperback on the dirty business of surgery (paulruggieri.com/cost-of-cutting). That's how fed up Dr. Ruggieri was with how backroom political power plays and hospitals buying up surgeons' practices in his hometown of Fall River, Mass., impacted the choices patients have in where they go for care.

One turf war for cases really bothered the independent-minded physician. A local hospital used economic credentialing to push a well-known surgeon group out the door, forcing them to negotiate with another hospital from a position of vulnerability. Patients who had seen the surgeons for years at the hospital didn't have access to them anymore.

Dr. Ruggieri had had enough. "I'm sure what's going on in my community is emblematic of what's going on in every community," he says.

Money generated in ORs impacts patient care. "It's becoming a big factor," he says. "Hospital systems are buying up physician practices to fill their ORs. They're paying enormous amounts of money for these surgeons, and have to keep them busy."

A growing number of hospitals want their own surgeons, and want to control every aspect of revenue generated from an operation. In the long run, Dr. Ruggieri believes, hospital-employed surgeons will limit patient choice and access to the most experienced surgeons, because a health system's primary care physicians will refer patients to that system's surgeons, who are often fresh out of medical school and looking for the financial stability of a salaried position.

It also raises healthcare expenses across the board, says Dr. Ruggieri, who points out that the cost of surgery depends on the contracts negotiated with Medicare and third-party payors. Let's say an independent surgeon and a hospital-employed surgeon take out gall bladders in neighboring ORs. "The surgeon who's employed by the hospital gets paid 20 to 30% more for performing the same procedure, regardless of outcome," says Dr. Ruggieri. "It's a crazy system."

The buzzwords in hospital systems are patient retention and leakage. "So if you take a patient out of the system for surgery at an independent surgery center, that's considered a negative against the physicians," explains Dr. Ruggieri. "It eventually hurts their bonuses."

Former U.S. Speaker of the House Tip O'Neill famously said all politics is local. "Well, all practice is local, too," says Dr. Ruggieri. "If a hospital system is competing against you, like mine is, you have to choose a side. Otherwise, when the music stops, there's no chair to sit on."

— Daniel Cook