For young orthopedic surgeons, having the full, long-term outlook of a practice before signing on is crucial, but is something that can be overlooked.
Private equity has changed the business dynamics of orthopedics, and understanding those nuances is critical.
These four surgeons and executives recently connected with Becker’s to talk about the differences between how new orthopedic surgeons think the business side of the industry works versus the realities of building a practice.
Ask Orthopedic Surgeons is a weekly series of questions posed to orthopedic surgeons and leaders around the country about clinical, business and policy issues affecting orthopedic care. Becker’s invites all orthopedic surgeons and specialists to respond.
Next question: What is one cost you’ve cut in the last year that had no negative impact on patient outcomes or staff morale?
Please send responses to Cameron Cortigiano at ccortigiano@beckershealthcare.com by 5 p.m. Central time on July 6.
Editor’s note: These responses have been lightly edited for clarity and length.
Question: What’s one thing you’d tell a newly trained orthopedic surgeon about the business realities of practice today that nobody told you?
James Andry, MD. Orthopedic Surgeon at DISC Surgery Center at Carlsbad (San Diego): I would go back and tell myself to get a very clear picture of the simple math of running the business, specifically regarding overhead and productivity. Taking calls is an absolute must early in your career as it helps support your practice while you refine your surgical skills. In whatever practice you join, get the numbers before signing anything. Also, find out the immediate and long-term future plans of the practice. Opportunities may arise that you never considered or learned about during training.
Ronald Gardner, MD. Founder of Gardner Orthopedics (Fort Myers, Fla.): Be mentored if the plan is to provide traditional orthopedic third-party reimbursement care. Otherwise, if economics allow, don’t sign up for any third-party contracts, take calls to build a practice the old-fashioned way and deliver very highly individualized care. The practice will grow and you will be able to have minimal overhead and logistical headaches.
Louis Levitt, MD. Vice President of The Centers for Advanced Orthopaedics and Chief Medical Officer of Medvanta (Bethesda, Md.): What I’d tell a newly trained orthopedic surgeon is this: the medicine you were trained to practice and the medicine you will be asked to practice are increasingly two different things. The system has shifted, and decisions that once lived in the exam room now get made in boardrooms, driven by volume targets and margin expectations rather than patient outcomes. The doctors I’ve seen thrive are the ones who recognized this dynamic early, asked hard questions before signing a contract and never stopped fighting to keep the patient at the center of every decision. Old-fashioned medicine may not fit neatly into today’s healthcare system, but the values behind it are still worth protecting.
Alex Vaccaro, MD, PhD. President and Spine Surgeon of Rothman Orthopaedics (Philadelphia): When it comes to the current trend of private equity entering private practice, one crucial and often unspoken reality is that the major financial rewards are front-loaded. Senior partners typically benefit most from the initial private equity transaction, receiving large payouts. However, junior surgeons who join the practice later often discover that subsequent recapitalizations or so-called “second bites at the apple” rarely deliver the same level of financial return. This creates a disconnect between initial expectations and later realities.
For new surgeons, it’s essential to look beyond just the starting salary or buy-in offer. Consider the long-term sustainability and true equity potential of the business. After the first private equity buyout, future value creation often depends on aggressive cost-cutting, expanding ancillary services or boosting patient volume — tasks that frequently fall on the newest hires. These junior partners may inherit significant debt and additional operational pressures, but without the prospect of achieving the same financial upside as those who benefited from the original deal.
Ultimately, the much-touted “second bite of the apple” rarely results in a transformational financial event. That’s why it’s critical for junior surgeons to negotiate and secure their path to true ownership upfront rather than banking on a future sale or recapitalization that may never materialize.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
