Ravi Chari, MD, the CEO of Orthopedic Solutions Management, said the model behind his company’s growth is simple: Give physicians real control, and the rest follows.
OSM, a majority physician-owned management service organization, recently completed its 23rd partnership. The company serves a mix of independent orthopedic practices and ASCs and accounts for more than 220 physicians.
“Physicians are our heartbeat,” Dr. Chari said. “With the heartbeat, we need an ECG.”
He described an “ECG” in this context as three components: the right economics, clinical autonomy and real governance rights. Those three elements, he said, are what convince independent practices to join OSM rather than go it alone or align elsewhere.
Why practices join
Dr. Chari said practices are primarily drawn to MSOs such as OSM due to the increasingly higher operational burdens pulling physicians away from patient care, with payer rate negotiations, office management and cost control among them.
“It’s the chance to be in a network of high-performing orthopedic surgeons where they have opportunities to partner with a group that can help them manage better through some of the challenges that are going on in healthcare broadly,” he said.
Smaller practices also benefit from shared data across a larger network, he said. A group of 12 physicians may see only a handful of a given issue, while a larger organization can identify patterns sooner.
Dr. Chari noted that orthopedic consolidation is being driven less by private equity investment and more by structural shifts in healthcare, including the movement toward outpatient care, value-based reimbursement, and increasing financial risk borne by providers.
He also pushed back on the idea that consolidation will inevitably produce fewer, larger MSOs. He said physicians are becoming more discerning about what they are joining, weighing ongoing compensation, clinical independence and governance rights over sheer scale.
“I don’t think size is going to be the most compelling feature,” he said. “I think it’s going to be, ‘What are the ways that this structure I’m joining allows me to preserve the things that matter the most to me.'”
Governance in practice
Dr. Chari said OSM’s roughly 220 physicians have real input into company decisions, not just symbolic representation. He pointed to instances in which physician partners have halted potential deals.
“There are times when the economics may look favorable to the company, and the physicians don’t want to proceed, and we’ve stopped it,” he said.
Dr. Chari said the emphasis on physician autonomy is especially important as younger physicians are joining MSOs. Those physicians in particular are seeking more than employment opportunities; they want a long-term voice in the future of the organizations they join and a meaningful opportunity to share in the value they help create.
“They want to make sure that if they are able to, if they’re going to join an organization, there’s a pathway for them to also participate in that equity side,” he said.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
