Orthopedic practices across the country face headwinds from several sources: market consolidation, competition from hospitals and health systems, and organic growth constraints.
Becker's ASC Review recently spoke with Charles Davis, managing partner at MD Healthcare Partners (MDHP) and Chief Development Officer of Orthopedic Solutions Management (OSM) — a orthopedic focused management services organization formed by Florida Orthopaedic Institute (FOI) and MDHP — who shared how OSM has managed to remain on a continued growth trajectory.
Growth in the orthopedic space requires a strong reputation and a multifaceted approach
The foundation for growth and in any clinical specialty is a reputation of quality outcomes. FOI was built around the foundation of clinical excellence through education and research and is home to some of the highest regarded orthopedic surgeons in the world, said Mr. Davis. OSM's job is to channel that excellence into successful partnerships for all stakeholders.
From there, OSM takes a multifaceted approach towards revenue growth with three primary pillars driving expansion:
- De novo growth: To date, OSMs averages 10 physician new hires and two new locations annually. Through the organizations partnership with the University of South Florida, its fellowship and residency programs serve as key recruitment tools. Over 300 orthopedic surgeons have trained at FOI since 2000.
- Hospital partnerships: "Rather than competing, we take a 'rising tide lifts all boats' approach," Mr. Davis said. That approach helped FOI grow its hospital partnerships almost tenfold (from two to 19) in the last two years.
- M&A partnerships: FOI's approach to M&A partnerships is as a physician-led and physician-owned management services organization. "We've found this distinction to be attractive and have completed five [such] partnership transactions with a strong pipeline of additional practices," Mr. Davis noted.
Investments to boost existing case volumes and add new services can be done in parallel
Orthopedic practice leaders should not have to choose between investing in current case volume optimization or integrating new services. Case volume optimization is always a focus. "It's not something you fix, and then move on," Mr. Davis said.
Mr. Davis said case volume expansion can be achieved by improving patient access. They monitor clinical access daily and strive to provide patients with appointment options within 24 hours — expanding clinical access through a broader patient funnel inherently increases surgical volumes.
The balance between the two is achieved through surgical and nonsurgical providers with the goal of maximizing surgeons' availability for surgical patients.
Infrastructure upgrades are key to maximizing growth
With a rising number and variety of high-acuity cases migrating to the outpatient setting, orthopedic ASC leaders can propel further growth by investing in infrastructure.
While this step requires a significant financial commitment and takes time to implement and bear fruit, it ensures the physicians involved engage in a thoughtful long-term strategy rather than a quick solution that may not be sustainable over time or optimal for complex cases.
Growth in orthopedic outpatient volumes means different things to different practice leaders. For some, it may mean simply migrating existing case volume from a hospital to an existing ASC, while for others, growth may take years and a significant financial investment.
Regardless of the preferred approach, it is essential that operators have clarity of purpose. "It all starts with a plan and making sure the shareholder base has the investment wherewithal (both time and financial) to execute that plan," Mr. Davis concluded.