What PELTO Health Partners did in its 1st year to prepare for expansion

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In February 2023 Durham, N.C.-based EmergeOrtho, Indianapolis-based OrthoIndy and Seattle-based Proliance Surgeons came together to form PELTO Health Partners, an orthopedic group free of outside capital.

Since forming, the group has focused on its short- and longterm strategies, along with growing the platform.

"We've divided into committees, we've established our board governance and have reaped some significant rewards of that," Allison Farmer, CEO of EmergeOrtho told Becker's. "[We saw] millions of dollars of savings, as well as some very unique opportunities for other extensions of PELTO. While we're doing that, we are being very intentional that we're building something that other practices can easily attach to and quickly see that value."

PELTO hasn't added more practices yet, but OrthoIndy CEO John Ryan said the group has been in conversation with several practices across the country. 

"We're being very deliberate about finding practices that are like-minded," Mr. Ryan said. "At this point [we're looking at practices that are] similarly sized, recognizing that eventually we will have built a number of solutions that will allow us to bring those solutions to smaller practices who can really benefit by the scale that PELTO has become."

Mr. Ryan said he expects PELTO will start to see new practices joining as soon as this year. The number of practices showing interest in PELTO so far has been in the double digits, Mr. Ryan said.

PELTO stepped into a market dominated by private equity-backed groups. Fourteen major private equity-backed orthopedic groups were formed between August 2017 and February 2023, according to a report in the Journal of Orthopaedic Experience & Innovation.

But PELTO has shown that private equity doesn't have to be the way, Ed Hellman, MD, president and board chair of OrthoIndy, said.

"I think one of our biggest accomplishments this year is just proving that we can do this," Dr. Hellman said. "We have three very big practices who are in diverse parts of the country in very different markets, yet we're able to get together and put aside our differences and focus on what it is that we can do together, how we can learn from each other, how we can benefit from each other's experiences to improve our situations in our own individual markets, and that's been really rewarding."

Note: This article was updated Feb. 29 to update a quote attribution. 

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