Twin Cities Orthopedics CEO sees 'regional play' as next big growth opportunity

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Minneapolis-based Twin Cities Orthopedics and Ridgeview, a four-hospital system, are building the Orthopedic Institute on the health system's Chaska, Minn., campus.

The center, expected to open in October 2023, will be Minnesota's first dedicated orthopedic center that is a partnership between an independent practice and a health system, according to the practice.

Aaron Johnson, CEO of Twin City Orthopedics, spoke to Becker's Spine Review about the partnership, other growth opportunities in orthopedics and how the specialty is evolving toward risk-based payment models. 

Question: The Orthopedic Institute at Ridgeview's Two Twelve Medical Center will be Minnesota's first orthopedic specialty hospital that is a partnership between an independent practice and a health system. What were the keys to getting this deal over the line? 

Aaron Johnson: It definitely comes down to finding the right partner. We've had discussions about this sort of orthopedic specialty hospital with other health systems, and my guess is other orthopedic practice competitors have, too. We have 60 years of history with Ridgeview, and we're partners in multiple areas. Because of that strong relationship that's rooted in community and providing the very best orthopedic care, that foundation is what really got this partnership over the finish line. We have two very innovative, nimble organizations that want to change orthopedics.

Q: Clearly there's a long-standing relationship between Ridgeview and Twin Cities Orthopedics, but what obstacles did you face when discussing this project?

AJ: The obstacles we faced would have been the same challenges regardless of the partner, but we were able to work through them because of our relationship. First, there was the inpatient bed availability from a licensure standpoint. Fortunately, Ridgeview had 20 beds — licensed and unused — that they could use for the Orthopedic Institute. Second, is from a structural standpoint: In Minnesota physicians can't own a hospital, so this is a Ridgeview facility, but TCO is the exclusive orthopedic provider at the Orthopedic Institute, which is obviously what piqued our interest. The partnership with Ridgeview is like none other I've seen. It's going to be a market disruptor in a great way. For us, for them, but more importantly for patients who need orthopedic care.

Q: Can you expand on why Twin Cities Orthopedics was interested in a project like this?

AJ: It's not that the other hospitals our physicians operate at aren't great facilities, but like anything, the more you specialize in something, typically the results improve. That's where this became such an interesting prospect for TCO, because there is not an orthopedic specialty hospital in the state of Minnesota. All we'll do at this facility is elective orthopedic surgery. We will start with total knees and hips and likely expand to other arthroplasty cases and complex spine. Because of that specialization, we're certain the care will be elevated, the experience and outcomes will be better for our patients, and it will become a destination for those seeking the best orthopedic care.

Q: How many Twin Cities Orthopedics physicians do you expect will operate at the orthopedic institute?

AJ: We have about 120 physicians, but around 40 of our physicians who work close to where the orthopedic institute is located have expressed an interest in working there.

Q: What other growth opportunities are you looking for at Twin Cities Orthopedics?

AJ: We're always in growth mode, and that speaks to the culture and personality of our physicians. We have several projects that are about to begin or are already underway. We'll be opening a new facility in Plymouth, Minn., that will include a five-OR surgery center — that will be our newest addition from an ASC standpoint. Construction is just getting started, and that is anticipated to open in the fourth quarter of 2023. We are evaluating several other markets as well. With that expansion, we also need to recruit more physicians.

Q: How is Twin Cities Orthopedics approaching physician recruitment for these upcoming projects?

AJ: Between now and 2025, we anticipate we'll need to add around 30 orthopedic surgeons. We have a dedicated individual on our team who is solely focused on orthopedic surgeon recruitment. We're investing in that strategy and planning for growth because we're seeing market share increases in almost every market we're in. The demand is certainly there, and we're working diligently to meet those demands.

Q: How do you see the ASC market evolving in your market as more orthopedic procedures continue to shift away from hospitals to the outpatient setting?

AJ: It's no secret in orthopedics that through advancements in surgical technology, anesthesia protocols, medications, etc., more and more cases are moving to ASCs. And that's great because everybody wins — surgery centers provide as good, if not better, outcomes and typically at a lower cost. That said, however, we will always need hospitals. There are some patients who will need to have procedures done at a hospital, which is why we pursued creating the Orthopedic Institute with Ridgeview.

That said, we're developing an ASC in Plymouth and are looking at expanding our existing ASCs. Our physicians operate out of seven ASCs now. We're examining those facilities to see if there are opportunities to add additional OR space. Like many in the orthopedic industry, we are positioning our practice and our ASCs for growth because so many surgeries are moving to the outpatient setting.

Q: In terms of value-based care, Twin Cities Orthopedics has achieved significant success in bundled payments for joint replacement. What area of value-based care will Twin Cities Orthopedics prioritize as healthcare is pushed away from the fee-for-service model?

AJ: We've done more than 10,000 total joint bundles and have a great track record in value-based care, but I think the conversation is trending toward risk-based payment methodologies. How do we manage a population of patients on a more capitated payment model? It's almost like the per-member, per-month model. To do that well, we need to see more collaboration across specialties — specifically orthopedics and primary care — which is why TCO and our physicians created Infinite Health Collaborative

We created an independent multispecialty practice to add other specialists and primary care physicians, so we can collaborate more easily on one tax ID and engage, not only health plans, but self-insured employers to move the needle in risk-based payment programs. Given TCO's track record with the Excel program, we're in a really great position to execute on those types of models.

The fee-for-service model is not working. If we're going to bend the cost curve in healthcare, there has to be more emphasis on risk-based payment models, and we plan on leading the way in that. We don't want to be in a situation where the market is dictating that upon us — we want to help build those models and embrace them.

Q: You became CEO of Twin Cities Orthopedics at a turbulent period in October 2020. How are things at Twin Cities Orthopedics looking now, compared to 18 months ago? How have your core focuses evolved?

AJ: Transitioning into the CEO role when we were fighting through a pandemic and consolidation of business operations with furloughs was a challenging time for all of us. I'm proud of how we weathered the storm because we came out of it as a stronger organization. It made me and my team better leaders and made our employees more resilient, and that's paying dividends today. Our primary focus is always patient care, but that fueled growth for us. We've had more growth opportunities thrust upon us in the last 18 months than we've had in the last 10 years. Growth breeds growth, and we're at a point now where we've got many opportunities we’re considering. 

We're looking outside of Minnesota. You're seeing other orthopedic groups looking at growing regionally and even nationally. We expect to be the local orthopedic provider of choice, and that will evolve into a regional play for us as well. Never take your eyes off the core goal, which is patient care, but we plan to continue to grow TCO and the brand so we can take the excellent care we're providing to our current patients and bring that to new patients in other markets.

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