This Editor’s Choice post is by Dr. Matt Schmitz, JBJS Senior Editor for Pediatrics and Social Media.
Do the omniscient words of the Wu-Tang Clan in their song “C.R.E.A.M.”—Cash rules everything around me—describe where the business of orthopaedics is headed? With recent proposed cuts in U.S. Centers for Medicare & Medicaid Services (CMS) reimbursement, it seems that margins in orthopaedics are becoming more and important. For physicians, for hospital systems, and for private and academic surgeons, the focus is on costs savings, value, and margins, while still maintaining our core mission of providing excellent patient care.
In the August 5, 2026 issue of The Journal, Day et al. present insights in a new American Orthopaedic Association (AOA) symposium report: Cost, Margin, Mission, and Value: What Every Leader Should Know About the Business of Orthopaedic Surgery
This AOA Critical Issues report examines how orthopaedic departments are navigating the increasingly business-driven landscape of health care through 4 interconnected lenses: cost, margin, mission, and value. The report presents perspectives from 4 types of institutions—fully academic (Washington University), fully integrated nonprofit (Intermountain Health), hybrid academic-integrated (Henry Ford Health System), and a physician-led group (Revere Health)—and explores approaches as health care in the U.S. shifts from fee-for-service toward value-based care (VBC) models.
Brief highlights…
- On cost, the authors outline the difference between health-system and payer perspectives, and discuss Henry Ford’s activity-based costing and Intermountain’s claims-expense transparency in their efforts toward cost containment.
- Regarding revenue, the report explores some of the unique challenges facing academic medical centers (complex cases, trauma readiness, declining RVU [relative value unit] reimbursement) and alternative models like per-member-per-month payment structures and shared savings.
- Looking at margin, the authors point to non-revenue-generating but foundational missions in orthopaedics, such as research, education, and leadership development, and emphasize the “intentional alignment of margin with mission,” to sustain academic and clinical priorities and ready departments to thrive in a value-driven environment. Intermountain’s successful opioid-reduction initiative is an example the authors touch on.
- The section on value discusses formal frameworks, such as the use of incremental cost-effectiveness ratio (ICER)-based modeling for comparing treatment options, with targeted analyses to support data-informed decisions (e.g., evaluating the shift from hospital to ambulatory settings for total knee arthroplasty). Among other value initiatives: incentives based on physician scorecards; and Revere Health’s point-based incentive system, which aligns specialists and primary care around shared outcomes.
The report concludes that, despite structural differences, all 4 institutions share common strategies: embedding cost-awareness into clinical decisions, reinvesting revenue into mission-driven priorities, and restructuring care delivery to maximize outcomes per dollar spent—positioning orthopaedic surgeons to lead system-wide transformation.
As orthopaedic surgeons, we are now being called on to focus on the business side of medicine, while keeping patient outcomes as part of our non-negotiable mission priorities. Through transparency and openly discussing costs, we can potentially improve margins by realizing savings that may have been previously overlooked. I hope we can realize that cash doesn’t have to “rule everything around me,” but it is part of the equation in patient care to improve outcomes and lower costs.
Read the full AOA Critical Issues article: Cost, Margin, Mission, and Value: What Every Leader Should Know About the Business of Orthopaedic Surgery
JBJS Senior Editor for Pediatrics and Social Media