2 CEOs on orthopedic consolidation — Don't grow for the sake of growth alone

Alan Condon -   Print  | Email

Orthopedic consolidation has likely been accelerated by the COVID-19 pandemic as more groups consider strategic partnerships to address the added economic challenges introduced this year.

Last month, the CEOs of two large orthopedic groups spoke to Becker's about industry consolidation and how they're looking at growth in 2021.

Note: Responses are lightly edited for style and clarity.

André Blom. CEO of Illinois Bone and Joint Institute (Des Plaines): Consolidation in the Chicagoland area in 2021 will continue. In a strange way, COVID-19 helped us to take a pause as we onboarded different practices and took the time needed to work through the challenges that onboarding can bring with it. At this stage, we want to ensure that we consolidate growth in a qualitative measure and not just grow for the sake of growth alone. One of the reasons we expanded was that we wanted to be a regional supplier of musculoskeletal services rather than just a local facility, but without losing the community feel of our individual practices. 

Coming together is the first part and working together is the second part. Now we have to work on things like brand integration, getting on the same EMR system, which we're moving to next year. Working together is really next for us in 2021, but I think there'll be more consolidation. We think the market in Chicago and in the Midwest is going to continue to lean toward more consolidation.

Aaron Johnson. CEO of Twin Cities Orthopedics (Golden Valley, Minn.): I think consolidation in orthopedics has been accelerated by the pandemic. One of the benefits of being a larger group is the economies of scale as well as the ability to negotiate better contracts with implant or supply vendors. Additionally, from a reimbursement standpoint, typically the larger groups are able to leverage the commercial payers and negotiate more lucrative contracts. As the pandemic hit and groups started to see this financial pressure and the financial crisis it created, it was quick for them to realize that long term — if they wanted to be a viable, autonomous independent practice — they really need to band together to be able to deal with some of these pressures and challenges.

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