These are challenging times for Dr. Ralph Gambardella Jr., chairman of the Kerlan-Jobe Orthopedic Clinic in Los Angeles. The facility, founded by Drs. Robert Kerlan and Frank Jobe in 1965, revolutionized sports medicine with its elbow reconstruction surgery known as the Tommy John Procedure, a ligament replacement operation that has saved the careers of hundreds of pitchers and other professional athletes. Gambardella’s patients have included a number of Dodgers, including Orel Hershiser, Kevin Brown, Sandy Koufax and Shawn Green. But the clinic’s level of care has been increasingly hampered by the workers’ compensation and malpractice insurance crises. So Gambardella is transforming the 18-physician practice into one that focuses more on non-workers’ comp patients who can pay the full tab.

Question: What percentage of your practice involves professional athletes?

Answer: Probably about 5 percent, for any type of orthopedic care. In terms of the number of professional athletes that get injured relative to the number of patients in a private practice, it is still quite small. The amount of time spent, however, is different. When you are acting as a team physician in baseball, there are 81 days or nights that you’re with the team. On a typical day you may be in the practice seeing patients and doing surgeries and then at 5 p.m. trying to figure out how to run up to Dodger Stadium to get there before game time and then come home after the game is over. Dr. Jobe and I cover each game. We have other guys in the group that do the other sports.

Q: Pro athletes take a small part of the practice, but you’ve got a lot of team assignments.

A: At this point, we cover all of the professional teams in Los Angeles and Orange counties, with the exception of the L.A. Clippers. For all of those, we are the orthopedists and team physicians.

Q: It would seem to be a lucrative part of the practice.

A: A typical retainer (from a team) is between $25,000 and $50,000. It’s really a year-round job. In baseball, during spring training, they like somebody down there. That’s time away from your practice. In July, we have the baseball draft, so the high school and collegiate players are going to land (at the Dodgers’ spring training complex) in Vero Beach and someone’s got to go down there to examine them all. There are things that go on throughout the year. That’s true no matter what the sport is.

Q: Are the fees for surgeries on pro athletes a big revenue generator, then?

A: What most people fail to realize is that all the professional ballplayers are (covered under) workers’ compensation insurance. So the reimbursement for doing Kevin Brown’s elbow is no different than doing a janitor who slips and falls and has to have an elbow reconstruction. It’s become more and more of an issue, because third-party payers have continued to drop the reimbursements. Workers’ compensation may only pay $2,000 for this type of operation. If someone is going to pay cash for that operation, the normal cost is between $7,000 and $10,000.

Q: There aren’t agreements with teams to pick up the remainder of the bill?

A: If you have an injured worker, and that’s what pro teams have, you have to accept workers’ compensation fee as your total fee. You can’t bill the team. Even if the team wanted to have a separate contract with you, it’s against the law.

Q: So where does the money come from?

A: From patient care and surgeries. I probably do about 350 to 400 surgeries a year. The clinic does 5,000 to 6,000 cases per year. There are some sophisticated spine surgeries that our surgeons might be reimbursed $7,000 to $10,000 for. There are some procedures where a doctor is only reimbursed $500. If you are a Medicare patient, for instance, and you have torn cartilage of the knee, Medicare pays about $700.

Q: We’re in the midst of baseball’s post-season, when teams can really tax their pitchers. Do you believe a lot of pitching injuries stem from over-usage?

A: There have been several studies that have shown that there are increased injury rates for pitchers that throw more than 250 innings a year, particularly if they throw that many innings consistently year after year. Often times the athlete that may say, “Gee, I think I was throwing too much,” but you can’t see that from an MRI exam. What we see more often, and what bothers us the most, is a very, very young athlete that is pushed by family and coaches and lands up with an injury that takes him out of that sport on a permanent basis. If the players are good, they get overplayed.

Q: Has your business grown as teams send more players your way to protect their investment in high-priced, long-term contracts?

A: Yes, but at the same time, the evolution of weekend warriors who work hard during the week and want to do something fun during the weekend and then get injured has led to growth as well. Part of it is just being in Southern California, where people tend to do more outdoor activities.

Q: Did watching sports have an effect on your career growing up?

A: One of the first games I saw was actually a very famous game where a (Red Sox) player named Tony Conigliaro got hit in the eye. Again, it was a permanent disability for that player. It’s one of those things you see as a moment in history that you’re there for. For me, it reinforced how bad things just happen.

Q: What got you into sports medicine?

A: I did a rotation in medical school in orthopedics and I was fascinated with how you could use your hands and people actually got better. If somebody comes in with a broken bone, you manipulate the bone back into position, put it into a cast and watch them go through (rehabilitation.) For me, that was an eye-opener compared to some of the other things like cancer, where you would take care of them but they never really got better.

Q: There is a belief among some pitchers that their velocity was actually greater after they had the Tommy John surgery.

A: That’s a misnomer. I don’t think we can put an extra 2 miles per hour on your fastball. Many people perceive it that way because they were actually performing at a lower level because of the problem. Now that they’ve gone through the surgery they blossom. I don’t believe that even Dr. Jobe would tell you that a reconstructed elbow was better than a normal one.

Q: Can you tell if steroids or other illegal substances played a role in an injury?

A: It’s very difficult to tell. In general, there are some people who seem to develop more irritations and repetitive injuries to their tendons. We think that that is usually a signal there is some usage of illegal substances, such as steroids. But it is very difficult to prove. You can’t tell by looking directly at the injury. But why does an 18-year-old wind up with a hamstring injury every week? At the professional and collegiate level, there are discussions about the detrimental effects of these materials, but we can’t control that at the high school level.

Q: You say your primary mission is to offer the best and newest techniques. How do you do that when you’re limited by insurance?

A: What we’re going to do is look for ways that we can operate in a free-market society and offer the best to the people that want the best. The way we are going to pull that off is we are going to push costs back to the people. We are going to evolve to some degree into a clinic for the people who want to use their discretionary income to have the best and do the best.

Q: Earlier this year the clinic paid $2.65 million to settle a whistleblower case brought by the U.S. Attorney that alleged health care fraud. What were the circumstances?

A: Medicare is not a system that’s applicable to a lot of the sub-specialties. We tried to use the (billing) codes as best as we could translate them for the amount of actual work that was done. But Medicare doesn’t recognize that work because it is not in their system. We elected not to fight this battle. In the end, about two-thirds of the physicians in our group have opted out of Medicare. We will no longer accept Medicare insurance. We’ll see patients but we have to charge them cash.