There's power in numbers – How private practice orthopedic surgeons can compete with hospitals, health systems

Practice Management

Operating a successful private practice, can be difficult without the right resources and people on your team. To compete with the buying power of hospitals and health systems, Louis Levitt, MD, and Nicholas Grosso, MD, of The Centers for Advanced Orthopedics in Bethesda, Md., provided strategies on physicians looking to become self-employed.

Dr. Grosso is the president of The Centers for Advanced Orthopedics and Dr. Levitt the vice president.


Question: Why has the number of physicians choosing private practice substantially dropped in the past 10 years?


Dr. Louis Levitt: I don't believe there has been a complete abandonment of private practice; rather there is just the flow of industry trends. I think the nature of private practice medicine is completely changing. I believe the sole proprietor ownership of private practice is moving toward multispecialty groups. There is

now a competition between traditional institution medicine, such as universities and health systems, versus other institutions, which are larger groups being created by private practice medicine. This integration in private practice is occurring due to the need to compete with the aggressive practices of the hospitals

and universities that began hiring physicians and putting them on their staff.


In turn, when hospitals and universities began putting physicians on staff, productivity dropped. Employed-physicians are paid a certain salary to work a specific number of hours and therefore are not being reimbursed for any of the additional time worked. As a result, we are now starting to see many of the physicians

who signed contracts to work for institutions are turning back toward the private sector. There is no question the younger generations are choosing to join institutions. One of the reasons is because the younger generation wants a certain lifestyle along with their work life. I have personally seen younger physicians

choosing practices based on location and availability.


A third factor motivating physicians to join institutional practice, especially in orthopedics, is due to the oversaturation of subspecialties. So many young physicians leaving their residencies are sports medicine or hip specialists and when they go to look for employment they quickly notice no jobs are available.

However, other subspecialties, such as trauma, are in higher demand because there are few trauma specialists in the area.


Dr. Nicholas Grosso: Six or seven years ago there was a huge move for hospitals and health systems to go out and buy orthopedic practices. Orthopedic surgeons and other specialties then felt squeezed by decreasing reimbursements while costs continued to go up, making it harder to run a practice efficiently. To

stay afloat, a lot of private practices allowed themselves to be purchased. However, for orthopedic surgeons similar to The Centers for Advanced Orthopedics, we didn't want to get bought up. So our solution to being successful was to join together.


I think now things have settled down in relation to hospitals acquiring orthopedic practices. They realized it wasn't the cash cow they were hoping for. However, I still notice young physicians out of residency training are choosing to join hospitals and health systems due to the set schedule and lifestyle appeal.


Q. What tips would you give a physician looking to open a private practice?


LL: I talk to my residents all the time and I am still a big advocate that all physicians should have self-determination, you should run your own shop and make your own clinical decisions. I then tell physicians looking to join private practice they need to affiliate with some very large group in a community. The single

practice of medicine will not survive. The larger group will give them the opportunity to grow their practices more quickly and secure more clinical opportunities. Contracting can also be more difficult when working in a solo practice and physicians can also experience difficulties with buying.


I think the big decision for physicians today is whether you want to work for someone who makes the decisions about your life or if you want to make those decisions yourself. A lot of private physicians have ancillary centers, and these can be profitable investments that universities and hospitals cannot offer.


NG: It is a tough time for physicians out of training to open a private practice de novo. Payers are still trying to squeeze the contracts of one to two-man groups, so you end up taking lower contracts and reimbursement rates. While some people can survive in a solo practice, I recommend physicians look to larger,

well-established orthopedic groups or practices to join.


Q. How will The Centers for Advanced Orthopaedics continue to advance and grow in the coming years?


LL: As we look across the healthcare industry, larger players are beginning to buy up other larger players. For example, CVS buying up Aetna. There is a lot of pent up money in the economy and a lot of players looking to join healthcare because they see money in medicine. The plan is to control the entire episode of

care from diagnosis to treatment. At The Centers for Advanced Orthopaedics we originally thought being the largest orthopedic group bought us a seat at the table when negotiating with giant industry competitors such as CVS and Amazon. However, we have come to conclusion that we are not big enough. To grow

our practice, we are in talks to partner with other large orthopedic groups in the surrounding area and across the country in Colorado. The hope is by the end of the year, the groups will form one large company with The Centers for Advanced Orthopaedics, creating a 400-plus physician group.


The Centers for Advanced Orthopaedics wants to be the only resource patients turn to when considering orthopedic care. We are cutting costs and looking to create the most streamlined process to provide patients with high-quality orthopedic care while making our physicians successful.


NG: We are always looking for new groups interested in joining us. And then we go through a process to determine if groups are a good fit for The Centers for Advanced Orthopaedics. Currently, we have a couple groups looking to come under The Centers of Advanced Orthopaedics in the pipeline. And we are also

working on teaming up with larger orthopedic groups across the country.


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