How the 'Neiman Marcus' of spine practices plans to compete with large groups, MSOs

Carly Behm -  

While some practices are looking to expand across state lines, Spine Center Atlanta plans to focus on the Georgia market, founder and spine surgeon James Chappuis, MD, said.

Dr. Chappuis spoke with Becker's Spine Review about his practice's plans and strategies for 2022.

Editor's note: This conversation was edited for clarity and length.

Question: How will Spine Center Atlanta grow? What strategies is the practice implementing?

Dr. James Chappuis: We've added a satellite location in Augusta (Ga.) and one in Macon (Ga.) in 2021. We've teamed up with a medical clinic, and that deal is just about to be completed. When that's done, we'll have an additional 14 satellite clinics because we'll be associated with them. We've added a few new physicians and we've started a traumatic brain injury program called Concussion Center Atlanta.

Q: What's your strategy in choosing locations for satellite offices?

JC: We like to feel like we're a regional practice, so we like to stay within Georgia. But we want to try to cover metropolitan Atlanta and areas that are within a three- to four-hour drive in areas that are underserved with spine and orthopedics. We just bought a medical office building in Valdosta, Ga., and we'll be up and running there in September.

Q: Would you ever consider expanding out of Georgia?

JC: Maybe. When you're growing, you really have to be careful because you don't want to grow with operating capital. So you need to find either a bank or credit line where you can grow so you're not using your operating capital. That's a mistake I think a lot of practices have done in the past. So you have to grow strategically. You have to grow with financial wisdom because if not, then you can really get into trouble, especially with reimbursement like it is today. It's less than it used to be, it's unpredictable, and you have to really factor that in with your growth plans.

Q: What's the key component of your strategy in 2022?

JC: With reimbursement like it is with private insurance, it's most likely going to be less to some degree than it was the year before. I think our strategy is to make sure we watch our overhead, keep our expenses conservative and well supervised. Then as far as the growth piece goes, we're expanding our out of network work we're doing with insurance companies. We also have cash prices now. So there are many patients in America today without insurance at all who need care. A number of them will come to us and say, "Well, what's your cash price for surgery?" So we have a cash price, which we think is reasonable.

Q: Large orthopedic groups and MSOs are branching out in the South. How will Spine Center Atlanta remain competitive?

JC: The key today is you have to be better than your competition or you have to be willing to do something that your competition doesn't really want to do. For us, I do a lot of failed spinal surgery, and many of those patients will come from long distances. That's one area that keeps us competitive.

I like to say that we're sort of the Neiman Marcus or Saks Fifth Avenue of medical practices. By that I mean we spend time and we don't rush patients through. We try to give quality care, give patients the time they need and deserve. So especially if someone's going to be paying out of network or paying cash, they're going to get the extra time that a lot of the other practices just don't have the time to give. If you're in a Medicare in-network practice, you've got to really keep the wheels turning. You've got to maximize the number of patients and surgeries you're doing each day. So there isn't a lot of time in practices like that for the art of medicine.

Q: What are the top healthcare trends you are following today?

JC: The biggest trend I'm following is a corporate takeover of healthcare in America today. I'm interested in watching hospitals are hiring their own surgeons and develop vertically integrated systems. I'm watching the care that the patients are getting in these types of institutions. We see so many patients that come to see us because they're not happy with that type of care.

I think the other thing that's interesting to watch right now is private equity groups are starting to buy more and more practices and developing megagroups. I think eventually they're going to be in direct competition with hospitals because they're buying practices and surgery centers. So we're starting to see a dichotomous healthcare system developing the vertically integrated hospital-based systems and then the more private practices that are getting purchased by private equity groups and consolidating. I think we're going to see more and more of that.

Q: Who do you think will win, hospitals or megagroups?

JC: I think hospitals will win because of the fact that they have to treat everything. They're going to be your go-to place for emergencies, and a lot of insurances are going to force patients to those vertically integrated systems. I don't know that sometimes you'll necessarily have a choice as a patient, but I think that the more quality surgeons are going to stay in private practices and will probably be part of the more integrated private-equity groups.

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