Physician reimbursement for general surgical procedures in the last century: 1906-2006

The last century has seen revolutionary changes in health-care delivery and treatment of surgical diseases. Equally dramatic has been the changes in health-care economics, including the creation of the Medicare and Medicaid programs in 1965. To better characterize the impact to surgical billing, we have undertaken an analysis of physician fees for common general surgical procedures during the past century.

Five common general surgical procedures were analyzed--inguinal herniorrhaphy, appendectomy, cholecystectomy, thyroidectomy, and repair of abdominal aortic aneurysm. Data for physician fees and reimbursement were obtained from the Illinois Medical Blue Book, the University of Iowa Department of Surgery, and the Centers for Medicare and Medicaid Services. The Consumer Price Index was used to convert all data to 2006 dollars.

Trends for billed charges of common surgical procedures during the last century have decreased by an average annual rate of approximately 3.5%. Reimbursement during the past 15 years demonstrates continued decreases for repair of abdominal aortic aneurysm (4.7%), thyroidectomy (3.3%), and cholecystectomy (2.9%), and reimbursement for inguinal herniorrhaphy has been flat and for appendectomy has increased slightly (0.9%). The combined annual decrease in reimbursement for the group of 5 surgical procedures during the past 15 years is 1.4%. By comparison, the average annual change in the price of an automobile during the past century has seen a 1.25% increase. Interestingly, milk prices have had a similar trend as surgical procedures with an average annual decline of 1.5% during the last 15 years, which has been attributed to government support (creating a surplus) and increased productivity.

There has been a substantial decline in payments for general surgical procedures during the past century. The influences of government regulations and increased productivity are likely to continue to apply downward pressure on surgical reimbursement.