Here are five ways to promote growth of orthopedic practices.
1. Merge with other practices. Due to the regulatory and cost pressures associated with running an orthopedic practice, Michael Schwartz, MD, board president of OrthoTexas (a recent merger between four orthopedic groups), sees mergers between smaller practices as a safe medium between private practice and hospital employment. "The pressures on a private practice will build and it will be difficult to compete with physicians who are employed by hospitals," he says. "A larger practice gives you the ability to work with insurance companies on a more fair reimbursement, form a good relationship with hospitals and be able to negotiate healthcare insurance and overhead expenses."
The larger practice setting can also provide economic benefits for the physician partners. "There are definite economies of scale that we can bring together as a large organization, which in turn allows us to increase our visibility, provide better services and take advantage of efficiencies to better serve the patient," he says. "If we can take the cost-benefit and provide better service for our patients, everyone benefits."
2. Strategically locate new and satellite office locations. Every time Rothman Institute decides to expand into a new community, the practice leaders must find a good location that will be easily accessible to the residents of that community, says Mike West, CEO of the Philadelphia-based practice. For example, after a while the practice began to outgrow its office in Voorhees, N.J., so they decided to ease the burden on that office by constructing a new location in Marlton, which is a little further north.
"This location really provided accessibility to the residents of South Jersey," says Mr. West. "Our South Jersey office is our fastest growing area — we experienced a 30-35 percent growth over the past three years. We see positive population growth in the future because we are opening offices in areas we haven't captured before with our other offices. By expanding, we hope to make our physicians easily accessibly for our patients."
However, it is always important to gauge the potential for success before making a commitment to build in the community. Rothman collects population demographic information first and then evaluates the potential patient volume. Taking on a hospital partner helps make the expansion less risky and begins to grow your professional network in the area.
3. Update technology for efficiency. When the two practices merged to form OrthoCarolina, the physicians constructed a new technology standard that included electronic medical records, digital radiology and a data warehouse. "This technology has created a platform that's fairly robust and has allowed us to serve as an alternative for smaller practices looking at the landscape and saying 'I need to be part of something bigger.' They are either looking at joining hospitals or large specialty groups, and we have the infrastructure to support them," says Daniel Murrey, MD, MPP, a spine surgeon and CEO of OrthoCarolina. The new technology also increases compliance needs with RAC audits and Comprehensive Error Rate Testing audits. Implementing these new technologies can be stressful for staff and drain financial resources because the staff must be trained on the new system. However, adaptability is a feature of a profitable practice. "The culture here is so accustomed to change that the staff gets nervous when things stay the same," he says. "The groups that are the most successful are the ones that are adaptable."
4. Add physical therapy services. Many orthopedic and sports medicine physicians have begun to expand the services offered at their practices by adding physical and occupational therapy. While adding these services could increase practice revenues, there are several things physicians must consider before moving forward with the addition. "The new school of medicine relies on sharing the risk of care for the patient, which means adding services to your practice," says Andre Blom, a physical therapist at the Illinois Bone and Joint Institute. "Ultimately, you have better outcomes, save money and become a premier facility."
Orthopedic practices have the option of partnering with rehabilitation and physical therapy organizations to provide physical therapy, but Mr. Blom recommends hiring the professionals on as part of the practice's staff. "When you have your own employees, it's easier to do program development and risk management," says Mr. Blom. "You have to have a lot of faith in the other organization to do things right 100 percent of the time." Additionally, high turnover rates for physical therapists and differing goals among the two organizations can make a partnership difficult. "We have a much higher level of satisfaction among our staff and less turnover when we hire them directly," says Mr. Blom.
5. Turn to cash patients and services. To combat declining reimbursement, Geoffrey Connor, MD,'s medical practice, D1 Sports Medicine, made the decision last year to begin targeting cash pay patients for his practice. While he is a trained orthopedic surgeon and performs joint replacement surgeries regularly, he also offers services such as platelet-rich plasma injections and in-office fiberoptic arthroscopy on a cash basis. Additional cash-based services include sports performance measures, such as body mass index and nutritional analysis, to create an environment of concierge sports medicine.
"If more subspecialists turn to the cash patient model, Medicare patients may have to wait longer for care or choose to pay more out-of-pocket," says Dr. Connor. "I don't want to scare Medicare beneficiaries, but hip implants and surgeries are expensive and the proposed rates just aren't viable. I set up a system like plastic surgeons or bariatric care; I'm trying to evolve an orthopedic practice that captures patients who need medical services with added value."
However, transitioning to a more cash based practice, including patients with a high deductible plan, isn't as easy as hanging a sign outside your front door. When patients are paying out of pocket for these services, they'll want the most bang for their buck. "With more out-of-pocket costs, patients will be far more demanding and expect a higher level of care, caring and services that are rare to find in today's orthopedic practices," says Mr. Champion.
Related Articles on Orthopedic Practices:
5 Tips for Optimizing Orthopedic Practice Revenue Cycle
Poised for the Future: 6 Ways for Orthopedic Practices to Overcome Today's Challenges
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1. Merge with other practices. Due to the regulatory and cost pressures associated with running an orthopedic practice, Michael Schwartz, MD, board president of OrthoTexas (a recent merger between four orthopedic groups), sees mergers between smaller practices as a safe medium between private practice and hospital employment. "The pressures on a private practice will build and it will be difficult to compete with physicians who are employed by hospitals," he says. "A larger practice gives you the ability to work with insurance companies on a more fair reimbursement, form a good relationship with hospitals and be able to negotiate healthcare insurance and overhead expenses."
The larger practice setting can also provide economic benefits for the physician partners. "There are definite economies of scale that we can bring together as a large organization, which in turn allows us to increase our visibility, provide better services and take advantage of efficiencies to better serve the patient," he says. "If we can take the cost-benefit and provide better service for our patients, everyone benefits."
2. Strategically locate new and satellite office locations. Every time Rothman Institute decides to expand into a new community, the practice leaders must find a good location that will be easily accessible to the residents of that community, says Mike West, CEO of the Philadelphia-based practice. For example, after a while the practice began to outgrow its office in Voorhees, N.J., so they decided to ease the burden on that office by constructing a new location in Marlton, which is a little further north.
"This location really provided accessibility to the residents of South Jersey," says Mr. West. "Our South Jersey office is our fastest growing area — we experienced a 30-35 percent growth over the past three years. We see positive population growth in the future because we are opening offices in areas we haven't captured before with our other offices. By expanding, we hope to make our physicians easily accessibly for our patients."
However, it is always important to gauge the potential for success before making a commitment to build in the community. Rothman collects population demographic information first and then evaluates the potential patient volume. Taking on a hospital partner helps make the expansion less risky and begins to grow your professional network in the area.
3. Update technology for efficiency. When the two practices merged to form OrthoCarolina, the physicians constructed a new technology standard that included electronic medical records, digital radiology and a data warehouse. "This technology has created a platform that's fairly robust and has allowed us to serve as an alternative for smaller practices looking at the landscape and saying 'I need to be part of something bigger.' They are either looking at joining hospitals or large specialty groups, and we have the infrastructure to support them," says Daniel Murrey, MD, MPP, a spine surgeon and CEO of OrthoCarolina. The new technology also increases compliance needs with RAC audits and Comprehensive Error Rate Testing audits. Implementing these new technologies can be stressful for staff and drain financial resources because the staff must be trained on the new system. However, adaptability is a feature of a profitable practice. "The culture here is so accustomed to change that the staff gets nervous when things stay the same," he says. "The groups that are the most successful are the ones that are adaptable."
4. Add physical therapy services. Many orthopedic and sports medicine physicians have begun to expand the services offered at their practices by adding physical and occupational therapy. While adding these services could increase practice revenues, there are several things physicians must consider before moving forward with the addition. "The new school of medicine relies on sharing the risk of care for the patient, which means adding services to your practice," says Andre Blom, a physical therapist at the Illinois Bone and Joint Institute. "Ultimately, you have better outcomes, save money and become a premier facility."
Orthopedic practices have the option of partnering with rehabilitation and physical therapy organizations to provide physical therapy, but Mr. Blom recommends hiring the professionals on as part of the practice's staff. "When you have your own employees, it's easier to do program development and risk management," says Mr. Blom. "You have to have a lot of faith in the other organization to do things right 100 percent of the time." Additionally, high turnover rates for physical therapists and differing goals among the two organizations can make a partnership difficult. "We have a much higher level of satisfaction among our staff and less turnover when we hire them directly," says Mr. Blom.
5. Turn to cash patients and services. To combat declining reimbursement, Geoffrey Connor, MD,'s medical practice, D1 Sports Medicine, made the decision last year to begin targeting cash pay patients for his practice. While he is a trained orthopedic surgeon and performs joint replacement surgeries regularly, he also offers services such as platelet-rich plasma injections and in-office fiberoptic arthroscopy on a cash basis. Additional cash-based services include sports performance measures, such as body mass index and nutritional analysis, to create an environment of concierge sports medicine.
"If more subspecialists turn to the cash patient model, Medicare patients may have to wait longer for care or choose to pay more out-of-pocket," says Dr. Connor. "I don't want to scare Medicare beneficiaries, but hip implants and surgeries are expensive and the proposed rates just aren't viable. I set up a system like plastic surgeons or bariatric care; I'm trying to evolve an orthopedic practice that captures patients who need medical services with added value."
However, transitioning to a more cash based practice, including patients with a high deductible plan, isn't as easy as hanging a sign outside your front door. When patients are paying out of pocket for these services, they'll want the most bang for their buck. "With more out-of-pocket costs, patients will be far more demanding and expect a higher level of care, caring and services that are rare to find in today's orthopedic practices," says Mr. Champion.
Related Articles on Orthopedic Practices:
5 Tips for Optimizing Orthopedic Practice Revenue Cycle
Poised for the Future: 6 Ways for Orthopedic Practices to Overcome Today's Challenges
6 Features of Effective Orthopedic Group Websites