The Red, Green Flags When Considering Private Equity Investment in Orthopedics


At the 20th Annual Spine, Orthopedic + Pain Management-Driven ASC Conference, attendees had the opportunity to learn about the red and green flags when considering private equity investment in orthopedics.

Liliana Lehmann, MBA, Administrator at Cypress Creek Outpatient Surgical Center and Founder and President of Axis HealthCare Partners, Steven Topper, MD, Orthopedic Surgeon and Co-Founder and Partner of Aspire Physician Solutions, Charles E. Claps, DO, Orthopedic Surgeon at Resurgens Orthopaedics, Hunter Early, Director of Corporate Development at Summit Spine & Joint Centers, and Scott Davis, Managing Director of Provident Healthcare Partners, discussed their experiences in the field. Paige Twenter, Assistant Editor of Becker's Healthcare, moderated the session.

Key Takeaways:

1: Green flags when considering private equity investment in orthopedics include monetizing value, protection from future risks, cost savings with consolidated functions, lifestyle benefits, access to capital for expansion, and strategic resources.

Dr. Charles cites the positive factors that come with private equity investment, such as improved finances, reduced risks, and access to resources for growth.

2: Due diligence is crucial when selecting a private equity partner to ensure they have the necessary experience, resources, and alignment with stakeholders.

The 10-member group emphasized the importance of researching potential partners thoroughly by speaking to existing partners and portfolio companies to avoid common pitfalls such as financial performance and misaligned interests.

3: Private equity firms are responding to quality issues by providing training and support for developing clinical autonomy and management boards.

The panelists note that private equity firms are addressing concerns about quality by sending out administrators to smaller groups and encouraging the development of management boards for better clinical autonomy and oversight.

4: Communication, transparency, and education are crucial for successful private equity partnerships, and it is important to find the right partner and plan for future growth.

The panelists stress the importance of clear communication and transparency throughout the process, as well as educating oneself and seeking input from industry colleagues to determine the best course of action for one's practice.


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