10 Tips for Orthopedic Practices to Remain Independent

Written by Laura Dyrda | September 26, 2011 | Print  |
It's much more difficult for orthopedic practices to remain independent today than it was even five years ago. As more and more practices are selling to hospitals and specialists are becoming employed, some independent groups are struggling to stay afloat. However, there are some large groups, such as OA-Centers for Orthopaedics based in Portland, Maine, which have been able to remain independent and even grown over the past few years. "There's no doubt that it's becoming more and more difficult to stay independent," says John Wipfler, CEO of OA-Centers for Orthopaedics. "Eight years ago, in Maine, about 35 percent of physicians were employed by a hospital or system. Today, that number is more than 70 percent, and in northern Maine it's really hard to find independent physicians. We've been lucky to maintain our independence and open three new offices in four years."

Mr. Wipfler discusses some fundamental things an orthopedic group needs for success in today's every-changing healthcare environment.

Basic fundamentals

Having a strong basis in the fundamentals is an important first step in securing your group's independence. Here are the elements that make up the foundation of a strong orthopedic group.

1. Clinical outcomes and patient experience.
Orthopedic groups must have outstanding clinical outcomes to build a reputation of excellence within their community. "Part of the reason for our success is that we have a long history in our community and a reputation of being an outstanding orthopedic practice in terms of our outcomes and how we treat our patients," says Mr. Wipfler. "It has become foundational: if you sell a crappy car and the car industry environment is bad, you won't survive."

In addition to focusing on good clinical outcomes, orthopedic groups should have a strong foundation of quality service. Constantly consider how the practice can give patients a better value in terms of respecting their time and making sure they are treated well during their time at the practice. One of the ways OA has been able to meet the needs of their patients is by building additional satellite offices closer to patients who would have traveled longer distances to see subspecialists at the central office.

2. Low staff turnover, high engagement. As a way to support patient satisfaction and manage expenses, orthopedic groups should also be focused on keeping their staff happy. "Practices have to remember that their most valuable resources are their staff and they have to work really hard to keep their staff happy," says Mr. Wipfler. "The average medical practice turnover rate is 18-19 percent and we are somewhere around 9 percent — half of the national average."

It's important to keep good staff members who know how to treat patients consistent with your group's patient-centered culture and can quickly answer any questions patients might have about their care. Training new staff members takes a great deal of time and money, and if they leave the practice quickly they are a drain on resources.

"If you want to retain experienced and good people, it makes sense to put resources into keeping them happy," says Mr. Wipfler. "Pay is only the beginning and it doesn't need to be at the top of the scale. Respecting their wisdom, giving them a voice in the practice, having working committees with staff and creating many channels for hearing about what they are thinking and feeling. We want to keep morale up and be very transparent about what is happening in the practice. Enlist them in helping you solve your problems."

3. Be upfront with staff about tough issues. A big factor in employee satisfaction is respecting how the group deals with changes. For example, OA had to freeze employee wages in 2009 because the practice was expecting lower revenue than in previous years. "When changes are coming, we want to give employees a heads up so that when the hard issues arise, there aren't any surprises, which builds trust." says Mr. Wipfler. "We are honest in telling them why we have to make a change and work with them to find the best solution to the problem. We often solicit their input and help."

In this case, practice management asked the staff to help find cost-saving measures and in turn allowed the staff to benefit from cost savings. The incentive program encouraged employees to work harder at lowering costs and minimizing waste, which made the practice more successful. "With this solution, we treated our employees respectfully and decently, and we were able to come through a challenging time," he says. In the end they did better that year financially than in other years.

4. Provide ancillaries with continuity of care. It's very helpful for orthopedic practices to add ancillary services, if they haven't already, and fully integrate all services to provide the best continuum of care possible. OA includes fully integrated X-ray, MRI and physical therapy services and a surgery center in addition to its clinic, so patients can benefit from several specialists who are all in communication about their individual care.

"The patients understand that their care is communicated from point to point, and they appreciate it," says Mr. Wipfler. "Ancillaries are a big part of our ability to survive over time, in part because it is more cost efficient as well as improves quality of care as a result of the continuity of care by providers who are all on the same page."

Positive mindset

When a practice has sound fundamentals, the leaders can begin focusing on different tactics for adapting and surviving within the volatile healthcare world. "We are in a healthcare environment that is very chaotic," says Mr. Wipfler. "There is a lot of change going on and if you don't have the fundamentals in place, it's hard to survive, not to mention thrive. If you do have the fundamentals intact, your mindset amid the upheaval in the healthcare industry is critical."

5. Find the opportunity for success.
In Mr. Wipfler's view, the disorganization and crisis of the current healthcare system can be an opportunity for his group to grow and develop. "In a stable environment where everyone's turf is secure, it's hard to upset the apple cart and create better opportunities for your group," he says. "When things are up in the air, you can find opportunities you might not have had before if you are looking for them and don't react to the uncertainty with fear." Approach your challenges with an open mind and a great deal of curiosity. That posture will help you see opportunities.

6. Don't react with fear. When you are merely reacting to the fear of uncertainty, you will miss potential opportunities for taking advantage of a tumultuous time. Instead of fearing potential changes, orthopedic practices should identify their competitive advantages, especially over hospitals, and find ways to exploit them. "It's hard for large hospital organizations to feel friendly to patients, like a smaller practice does, which is a competitive advantage we could exploit," says Mr. Wipfler. "Large hospital organizations can also be clunky, and one of the things we can do is create a high level of customer service that hospitals find hard to compete with."

Another point that Mr. Wipfler often highlights is the group's ability to spread throughout the community while the hospital is fairly grounded within the walls of a single facility. "A hospital is locked where it is, but we are able to have satellite offices in a number of areas," he says. "Local hospitals can't as easily build somewhere else, but we can be nimble and create facilities that are closer to our patients."

7. There will be hard decisions, lean in. With all the challenges being faced by practices there will be hard decisions. OA had its trauma specialists and a number of its joint replacement surgeons recently leave to join a hospital. "It was a very difficult event for the practice and not of our choosing," said Wipfler. "However, one of the most important tasks of leadership in any organization is to understand the change process and take front and center through the inevitable minefields of big events — lean in, don't shy away."  

If you are thoughtful, open and enlist everyone for the challenge not only will you increase the likelihood of making it through, but you may come out on the other side better off.

8. Share ideas with other specialists. Just because your orthopedic group may be one of the only independent orthopedic groups in the community doesn't mean you're alone in your struggles. There are most likely other independent orthopedic groups or other specialty groups in the state that are facing the same challenges you are, and sharing information amongst specialists can help each group grow stronger. The physicians and leaders at OA have been instrumental in forming an IPA in Maine for specialty practices only to support one another.

"We've been involved in the founding of a specialty-only IPA where we come together with other specialists to share resources and ideas, and we collaborate to help each other reduce our expenses and find other opportunities to thrive," says Mr. Wipfler. 

9. Show employers your value. The need for quality care at a reduced cost has caused employers to become focused about where employees are receiving care and how much it costs. They want to ensure their employees have the best care for the lowest cost, and they are less restrained than they used to be about identifying their provider preferences.

"We are seeing some big employers who are self insured looking for high value, meaning high quality for their employees, but at a reasonable cost," says Mr. Wipfler. "These employers are thinking of steering patients to specific providers who meet these qualifications. If we give them a break on our fees and maintain or improve quality, they will change their plan so it costs employees less to come see us in co-pays and deductibles. If you are in a position to take advantage of that, I think its something practices can do to provide great value."

10. Have strong leadership. A strong leadership team that is able to spend time working on issues within the practice and dealing with the outside world is helpful to sustained success. The management team needs to focus, with physician owners, on successful strategies and their implementation. "The most important thing for physicians to be doing is the thing they are trained for: orthopedic care and surgery, however, as owners they need to be engaged in the practice issues," says Mr. Wipfler. "Our management team and physician owners are working toward a good, strong relationship and good internal coordination so everyone is on the same page."

In some larger groups, it can be difficult to bring every physician on to the same page, especially if the group has subspecialists. Surgeons in different subspecialties often have different goals or points of focus, and the management team needs to work with the various groups of physicians to find a common solution. "We have an executive committee and a board, as well as different committees and groups that meet to talk through issues," he says. "You've got to be talking all the time because there are going to be some differences, but focusing on your overarching goal will ensure the smaller decisions and differences don't derail the practice."

Related Articles on Orthopedic Practices:

What Can Orthopedic Surgeons Do to Meet the Needs of Baby Boomers? 7 Responses

5 Tips for Successfully Adding Physical Therapy to Orthopedic Practices
5 Things to Know About Orthopedic Practice Mergers



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