Economies of scope in physicians' work: the performance of multiple surgery

While the fees for the large majority of physicians' services in the new Medicare Fee Schedule (MFS) are derived directly from studies of the resource costs involved, payments for one class of procedures, multiple surgery, are based instead on existing policies and conventions. Using surveys of physicians, we measured the work and time involved in performing 146 multiple surgeries. We found economies of scope exist in performing these services, particularly during the preoperative and postoperative periods. We also found some differences in economies across procedures. Based on our findings, we propose payment policies for multiple surgery.