By 2019, Marc Pietropaoli, MD, had built an orthopedic practice with dozens of employees. But when he examined its finances, he discovered something troubling: The only profitable services were those insurance didn’t cover.
For years, declining reimbursement had pushed him to see more patients just to keep the business running. Now, he was questioning whether the traditional insurance model was sustainable at all.
“I just knew the traditional insurance model was killing us financially, but it was also not good care for patients,” he told Becker’s.
Dr. Pietropaoli, founder and CEO of Skaneateles, N.Y.-based Victory Sports Medicine & Orthopedics and Victory in Motion, eventually moved away from traditional insurance participation, rebuilding his practice around direct patient payment, joint preservation and longer appointments. The transition meant cutting staff, narrowing his clinical focus and rethinking how an independent orthopedic practice could survive without relying on patient volume.
When more patients stopped being the answer
Dr. Pietropaoli founded Victory in Motion after leaving a group practice. Trained under renowned sports medicine surgeon James Andrews, MD, he built a multidisciplinary operation that eventually included physical therapy, imaging, athletic trainers and other services.
As reimbursement declined, particularly between 2008 and 2013, maintaining that infrastructure became increasingly difficult. He initially pursued expansion, purchasing 100 acres with plans to develop a sports medicine complex that could generate additional revenue through athletic facilities and training programs. The project ultimately failed amid community opposition, leaving him with significant financial losses.
For much of the following decade, he continued operating within the insurance system, growing increasingly frustrated by the volume required to sustain the business. By 2019, his practice employed roughly 35 to 40 people. Reimbursement was falling while staffing costs continued to rise.
The conventional response was to increase patient volume. Dr. Pietropaoli had reached his limit. “I don’t think we can see more patients, and we’re getting less and less per patient,” he recalled thinking.
Meanwhile, services such as platelet-rich plasma injections, bone marrow-derived cell procedures and laser therapy were generating revenue outside traditional insurance reimbursement.
The COVID-19 pandemic accelerated his decision. When elective surgeries were suspended in 2020, he began combining nonsurgical interventions into a structured knee preservation program for patients who otherwise had been awaiting joint replacement. Insurers ultimately declined to reimburse the program, leaving patients responsible for its cost. To his surprise, some were willing to continue paying after reporting improvements. That experience gave him the confidence to restructure his business.
The hardest cut wasn’t financial
Moving away from insurance also meant dramatically reducing the practice’s workforce. At the beginning of the transition, Dr. Pietropaoli had 32 employees. His COO calculated that the redesigned practice could operate with approximately eight.
Much of the reduction came from eliminating administrative positions dedicated to billing, credentialing and fighting insurance denials.
For Dr. Pietropaoli, letting longtime employees go was the most difficult part of the transition. The smaller operation also required him to abandon the idea that his practice needed to offer everything to everyone.
Working with a business mentor, he narrowed its focus around knee preservation, standardized workflows and reduced services that no longer fit the model.
Today, the practice operates with a substantially smaller team and is beginning to grow again. But removing insurance-related overhead did not eliminate every financial challenge. It replaced one of the practice’s biggest operational burdens with another: attracting patients willing to pay directly.
“Getting people in the door who don’t know you yet or don’t know what you do — that’s the hardest thing,” he said.
Established patient relationships helped. Referrals from current and former patients remain his leading source of new business. For surgeons considering a similar transition, Dr. Pietropaoli emphasized the importance of finding experienced mentors, identifying a clinical niche and building systems before attempting to scale.
A different equation for patient volume
Perhaps the most significant change has been how the practice uses physicians’ time. Rather than scheduling dozens of appointments daily, Dr. Pietropaoli said his team typically evaluates no more than two to four new patients during its extended consultation process.
The practice calls these visits “clarity days.” Each lasts approximately four to five hours and involves multiple team members reviewing medical records, performing examinations, evaluating imaging and discussing treatment options.
“Time is the secret sauce,” he said.
The approach reflects a business model in which revenue is not dependent on maximizing the number of insurance-billed encounters. It also allows Dr. Pietropaoli to spend more time evaluating whether surgery is necessary.
His practice emphasizes exercise, rehabilitation, nutrition and regenerative interventions, although evidence supporting these treatments varies, and they are not established substitutes for knee replacement in all patients. Dr. Pietropaoli acknowledges that some patients still require surgery.
The financial trade-off is also significant. Patients must be willing and able to cover services that insurance does not reimburse. Dr. Pietropaoli cautioned against assuming patients will refuse to pay, noting that many already face substantial premiums, deductibles and other medical expenses. Still, he acknowledged that some patients cannot afford the model, raising questions about how widely it could expand without creating additional barriers to care.
Will more orthopedic surgeons follow?
Dr. Pietropaoli believes growing reimbursement pressures will push more orthopedic surgeons to reconsider traditional insurance participation, although he expects the shift to remain gradual. He pointed to a younger surgeon who established a regenerative medicine practice shortly after residency and eventually moved entirely outside insurance networks.
He also stressed that leaving insurance does not necessarily mean abandoning surgery. Physicians can continue performing procedures as out-of-network providers, depending on their practice arrangements. For established surgeons, however, the transition requires more than changing payment policies. It means rethinking staffing, patient acquisition, clinical offerings and the relationship between physician time and practice revenue.
Dr. Pietropaoli spent years believing there was no realistic way to make that change. Now, he hopes other surgeons recognize that remaining in the traditional reimbursement system is not their only option.
“There’s a way to get out of the system,” he said, “There’s a way to do things where you find the love and joy of medicine again.”
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.
