The career path decision is not getting any easier for physicians. Independent practice. Hospital employment. Private equity partnership. ASC ownership. For spine and orthopedic surgeons, choosing a path has never come with more options.
Three physicians who have been through the decision shared their insights with Becker’s.
1. Offsetting declining reimbursement
Another round of physician fee cuts is part of CMS proposed 2027 Medicare Physician Fee Schedule on July 14. Each year, physician reimbursement declines by small percentages, while the companion calendar year 2027 Outpatient Prospective Payment System/ASC proposed rule increases facility payment rates. For many surgeons, owning part of an ASC has become a way to offset declining professional reimbursement with facility revenue.
John Peloza, MD, is founder and owner of Peloza Spine, a physician-controlled ASC-based practice in Chesterfield, Mo. He said as technology advances and physician reimbursement continues to decline, spine and orthopedic procedures will increasingly migrate to ASCs.
“It’s just death by a thousand cuts,” Dr. Peloza said, referring to the gradual decline in physician reimbursement. “So you’ve got to have other sources of revenue streams. So the biggest one is ancillaries at facilities.”
2. Recognizing red flags
While ownership can create additional income opportunities, physicians said it is not necessarily an easier career path. Whether joining an existing center or accepting a partnership offer, they emphasized the importance of understanding both the organization and the people involved before making a commitment.
Benjamin Stein, MD, is an orthopedic surgeon and CEO of Capital Surgical Solutions, an ASC company in the Washington, D.C., area. He said one of the biggest warning signs is being recruited too aggressively before getting to know the organization.
“If a place is doing that without you even barely stepping foot in the door, that’s a red flag because that means something must be going on from their own economic bandwidth that is making them desperate,” he said.
Dr. Stein also said the physician ownership structure is a strong indicator of whether a surgeon will thrive at an ASC. Prospective partners should evaluate whether they trust their colleagues and share similar long-term career goals.
“What’s the physician owner makeup of that facility? Are they peers? Are they people that you feel are true colleagues and peers of yours?” he said.
Private equity firms also have become increasingly involved in ownership.Michael Gross, MD, orthopedic director of Union Middlesex Orthopedics in Woodbridge, N.J., said a private equity transaction may make sense for surgeons nearing retirement but is less attractive for physicians early in their careers.
“[Private equity groups] are interested in buying them up, rolling them up and reselling them,” he said. “That’s how private equity makes money. It’s not giving you stability.”
Dr. Peloza said he remains skeptical about the long-term success of physician-private equity partnerships and urged physicians to carefully review contracts before signing.
“You better know what you’re signing,” he said. “You better have good lawyers because I can guarantee you the private equity guys have the best lawyers.”
3. No one-size-fits-all path
Independent practice, hospital employment, private equity-backed practice and ASC ownership involve different trade-offs in compensation, stability and practice environment. Physicians advised early career surgeons to identify their own priorities rather than following a universal path.
“One person’s ceiling is another man’s [floor]. … I don’t think you can generalize,” Dr. Gross said. He encouraged physicians to evaluate what they value most in compensation, workplace culture and stability before choosing a practice model.
Dr. Peloza said physicians considering ownership should have an entrepreneurial mindset. Those without an interest in business operations may not find ownership to be the best fit.
Dr. Stein said physicians should begin by asking themselves one central question.
“How can I have the most input and control to the environment and the patient experience and how can I maximize in an appropriate manner my economic position and make sure I’m putting it into place that has good long term viability?” 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.
