The conversation surrounding orthopedic and spine practice consolidation often frames the question as who owns the practice. However, according to surgeons, what matters most is who has a voice in the decisions.
Private equity often dominates the conversation about orthopedic consolidation, but health systems are also a large employer of orthopedic and spine surgeons. Ten physicians explain what that gap means for autonomy, compensation and where both models are headed.
Note: Responses were lightly edited for clarity and length.
Question: Health systems are acquiring orthopedic practices as is private equity, but they tend to not receive the same level of scrutiny. How do the two models compare regarding surgeon autonomy, compensation and clinical independence?
Cory Calendine, MD. Orthopedic Surgeon of Bone and Joint Institute of Tennessee (Franklin): The debate often frames health systems and private equity as fundamentally different models, but in reality they are becoming more alike than many realize. Both operate in an increasingly challenging healthcare environment where growth, efficiency and long-term sustainability are essential.
From my perspective, ownership matters less than governance. The more important question is: Who has a voice in the decisions? When physicians have meaningful input into clinical operations, technology adoption, staffing and strategic direction, either model can be highly successful. Likewise, organizations that actively engage physicians in leadership are better positioned to innovate, adapt and deliver exceptional patient care. Every organization must balance financial stewardship (profitability, even sustainability) with quality, access and the patient experience.
Ultimately, the organizations that will attract and retain the best orthopedic surgeons will not simply offer the highest compensation. They will foster a culture where physicians are viewed as trusted partners, with a meaningful role in shaping both clinical care and the future direction of the organization. In the long run, culture and physician engagement will matter far more than the ownership model itself.
Tan Chen, MD. Orthopedic Spine Surgeon of Inova Orthopaedics & Sports Medicine (Fairfax, Va.): For patients, the most important question isn’t who owns the practice. It’s whether their surgeon has the freedom to recommend what’s truly best for them. Compensation models may differ between health systems and private equity, but treatment decisions should always be based on a patient’s needs, not financial incentives. Regardless of the ownership model, patients benefit most when physicians have the independence to make decisions based on their expertise and what’s right for the individual sitting in front of them.
Travis Doering, MD. Founder, Upper Extremity ATX (Austin, Texas): The private equity conversation gets framed as capital versus capital. The variable that actually matters is integration. PE buys the practice — the charts, the schedule, the ancillaries. It doesn’t buy the hospital or the referral network feeding that practice. So the available levers are blunt ones: more patients per session, shorter visits, tighter coding. Real pressure, but bounded pressure, and largely visible to the surgeon living it.
A health system buys the surrounding infrastructure along with you. Referral flow, site of service and implant selection all get set upstream of you. Autonomy erodes through committee rather than through a productivity dashboard — slower, harder to point at, which is part of why it draws less scrutiny. Compensation follows the same logic: systems often look better in year one, but you’re paid on wRVUs whose volume you no longer control, while the system captures the facility-fee differential your work generates.
Neither model has been stress-tested. Site-neutral payment is the test. If the HOPD differential goes away, the network effects systems are paying for get a lot less valuable. Do those practices then get sold to PE? Do surgeons buy themselves back? Nobody knows yet.
What gets lost in the two-model debate is the third option. Independence is still viable — it just means building the infrastructure yourself instead of renting someone else’s.
Thomas Dowling, MD. Orthopedic Spine Surgeon, Medical Director and Managing Partner of Long Island Spine Specialists (Commack, N.Y.): It really varies among the healthcare systems as to how practices are bought, integrated and managed. That is a topic in itself. One type is to just employ the physician and not buy the practice — providing a signing bonus, good employment contract with productivity bonus structure along with a paid administrative title. However, there is less autonomy. The structure of this may have some varieties of what I just outlined.
Another may buy the practice and assets plus or minus real estate along with providing a possible signing bonus, employment agreement with usually a productivity bonus with or without a paid administrative title, but with more autonomy as to maintain a recognized brand that the practice may represent, especially a subspecialty practice like spine.
Overall, a system wants to capture the volume of surgeries and ancillary services a practice or a surgeon may provide. Some systems already have a great base of readily available patients but need the orthopedic surgeon to keep those patients within the system as they already have a great captured primary care group of providers. Those are the ones with less autonomy.
PE firms, in general, are looking for primarily well-managed positive cash flow practices to acquire, aggregate and then resell for a profit. There is usually more autonomy for the anchoring practices with efficiencies of scale in terms of administrative-contracting and ancillary services such as physical therapy, imaging and ASCs, until that second sale occurs and then autonomy typically takes a blow with a more corporate structure looking to squeeze more profits.
Brandon Hirsch, MD. Orthopaedic Spine Surgeon of DISC Sports and Spine Center (Newport Beach, Calif.): Hospitals and health systems have been acquiring physician practices since the 1990s, and the current wave is larger than the first one, with close to 60% of physicians now employed by a hospital or health system compared to roughly 6.5% owned by private equity. Private equity receives the majority of the scrutiny in this conversation despite being a much smaller share of the consolidation that has actually occurred.
Surgeons in both models have generally made a deliberate decision to hand off the business of running a practice: staffing and payroll, payer contracting and credentialing, billing and collections, compliance, and the cost of real estate, equipment and technology. Those are the real levers of autonomy in an independent practice, and giving them up is usually the reason a surgeon chooses employment or a platform in the first place. What differs between the two, in my opinion, is how far the constraint extends beyond that handoff. A health system typically owns imaging, physical therapy, rehabilitation facilities and a referral network, and its economics depend on capturing that downstream revenue rather than facility revenue alone. That gives the employer a reason to influence where a patient goes across the entire episode of care, from the imaging that establishes the diagnosis and the conservative treatment that precedes surgery through rehabilitation afterward. A private equity platform is usually a smaller entity with fewer ancillary assets to protect, so a surgeon in that setting may retain somewhat more practical latitude over those decisions.
Clinical independence is treated differently in each as well. In a private equity arrangement the physician-owned practice contracting with a management company is the structure required in most states to satisfy corporate practice of medicine law, and states are now testing how much control a management company can hold under it. Oregon restricted that structure directly in 2025, California’s restrictions took effect this January, and several more states have similar legislation moving. Hospital employment faces no equivalent scrutiny of its ownership structure, though it does operate under a different constraint. Stark law permits a hospital to require an employed physician to direct referrals internally, but only in writing and with explicit exceptions for patient preference, insurer determination and the physician’s own judgment of what is in the patient’s best medical interest.
The compensation question is where I think surgeons are least well informed. Employed physician compensation is often higher than professional collections alone would support, and hospitals recover the difference through facility fees and downstream revenue. Site neutrality compresses that. CMS moved payment for drug administration at off-campus hospital departments to the physician fee schedule equivalent rate this year and has proposed extending the same treatment to imaging without contrast for 2027, and the 2026 spending bill will require every off-campus department to bill under its own provider identification number by 2028. MedPAC has stated that aligning rates across settings would remove much of the financial incentive hospitals have had to acquire practices. A surgeon evaluating an employment offer generally cannot see the facility and ancillary economics that justify their compensation number, and most hospital agreements permit the employer to revise the compensation formula during the term.
Both models rest on payment and ownership rules that are being rewritten simultaneously. I would encourage any surgeon considering either one to look past this year’s terms and ask what the arrangement looks like once site neutrality and state corporate practice enforcement have run their course.
Philip Louie, MD. Spine Surgeon, Director of Research and Academics of Virginia Mason Medical Center (Seattle): When looking at what actually changes day to day, I think both have a ton in common. The major difference is “visibility.” Private equity tends to draw more attention partly because the terms are easy to see (publicly). There’s a fund with a “duration” attached, and everyone knows the practice is expected to sell again in five or seven years. When a health system buys the same practice, it looks like the group is simply joining a larger organization that plans to stay, so people assume that this is a fundamentally different kind of arrangement.
Autonomy. Private equity tends to take the operational decisions: vendor contracts, staffing, scheduling and site of service. Health systems often leave the practice looking familiar while placing it inside institutional governance, so implant selection, formulary, block time and service line priorities get decided through committees. Both models involve transferring meaningful decision rights away from the surgeons.
Compensation. Private equity offers a payment up front in exchange for a reduced ongoing salary and equity whose value depends on a transaction the surgeon doesn’t control. Health systems offer no up-front payment, often a competitive initial contract, and productivity expectations that get revisited at renewal. Both carry risks, but are realized at different times.
Clinical independence. Both models create site-of-service pressure. Private equity wants to move cases into the ASC, and health systems want to move them into the HOPD. If you look closely at literature, this type of vertical integration has been shown to raise commercial prices without a corresponding gain in quality. Which will be interesting to follow longer term, given the added scrutiny.
James Rizkalla, MD. Clinical Assistant Professor of Orthopedic Surgery and Medical Director for Orthopedic Research of the Texas A&M School of Medicine and Baylor University Medical Center (Dallas): As a hospital-employed spine surgeon at Baylor University Medical Center in Dallas, part of the Baylor Scott & White Health system, I’ve seen firsthand how many independent orthopedic practices throughout the Dallas-Fort Worth area have been acquired by either health systems or private equity groups. Both models have their pros and cons. Hospital employment offers stability, infrastructure and support for research and complex care, while private equity often provides greater operational flexibility and physician ownership. Ultimately, the most important issue isn’t who owns the practice — it’s whether physicians maintain a meaningful voice in clinical and operational decisions and the autonomy to make patient-centered decisions without undue financial or administrative pressure.
Christian Royer, MD. Chair, Orthopaedic Surgery Section of Baylor Scott & White Health Texas Provider Network (Dallas): I think that both private equity and hospital systems have targeted medical practices which have traditionally offered the greatest return on investment. Certainly, orthopedic surgery fits that criterion given not only its procedural revenue generation but significant downstream revenue from advanced imaging, physical therapy, home health and DME.
The reason they are perceived differently is that the “goal” of private equity is to get the highest return possible for its investors using the provision of medical care as a tool to that end. The healthcare systems, most of which are “nonprofit,” are perceived as attempting to provide the most efficient delivery of healthcare in a cost-effective fashion as their “goal.” There are obviously systems that don’t fall into that category. However, all healthcare systems must provide that care with a return that allows for capital expenditure for improvements and expansion. When there are actors in healthcare whose main goal is profit that creates a target for governmental and payer scrutiny.
With regards to surgeon autonomy, I think the evolution of healthcare is away from variability in the provision of care to control cost and patient outcomes. I think this is true regardless of which model physicians join. True clinical independence continues to be eroded. The payers, whether private or governmental, control this by denying surgeries, treatments and imaging based on all kinds of criteria. Even our professional organizations routinely make policy statements recommending care protocols which subsequently limit our independence in providing care.
On the compensation matter, these are two very different paths. In either case the practices are looking for a solution to staying economically viable in an era of annually declining reimbursement and ever inflating overhead costs. The margins get tighter every year to the point of being negative. Selling to private equity has the upside of being able to continue to participate in downstream and ancillary revenue generated from the practice while pulling equity from the practice. I think this is not a bad option for surgeons in the last decade of practice but decreases the potential income for younger partners after the PE group takes its “scrape” of revenue prior to distribution to the physicians. As to whether or not there is any real value in the surgeon’s equity in the new business entity, that has yet to be proven with any substantial sale I am aware of. Also, it is still a cash model at the end of the day and is vulnerable to the continued reimbursement cuts which occur yearly.
For groups joining healthcare systems this is done either through complete sale of the group bringing the surgeons into a true employment model versus a physician services agreement with the group in a “foundation” model. In both models there is typically a productivity component by RVUs which provides reimbursement to the surgeon above what could be collected in private practice or PE model. This accounts for the value in the downstream revenue on a fair market value basis. The benefit of this is some protection against the declining reimbursement. The downside can be limited access to opportunities like owning and renting your own building or real estate. Also, no ability to have your own physical therapy, DME or advanced imaging.
Given the advantages and disadvantages of both, my opinion at this point is that the employment/foundation model is preferable to the PE model. However, that can vary based on any specific circumstance.
Jeffrey Smith, MD. Orthopedic Traumatologist of Orthopaedic Trauma & Fracture Specialists Medical (San Diego): I don’t believe the conversation should be framed as health systems versus private equity. The more important question is whether the organizational model enables surgeons to deliver high-quality patient care while maintaining meaningful professional autonomy.
In my experience, both health systems and private equity-backed organizations can offer advantages and disadvantages. Health systems often provide greater stability, access to capital, multidisciplinary collaboration and alignment with broader population health initiatives. Private equity may offer greater operational efficiency, entrepreneurial opportunities and financial upside for some physicians.
The determining factor is rarely the ownership structure itself. Rather, it is the quality of leadership, governance, transparency and the degree to which physicians remain meaningfully involved in decision-making.
From a surgeon’s perspective, autonomy is less about complete independence and more about having a respected voice in clinical standards, resource allocation, scheduling, staffing and strategic direction. Compensation also extends beyond salary or equity; surgeons increasingly value practice sustainability, predictable workflows, adequate support staff and the ability to focus on patient care rather than administrative burdens.
The organizations that will be most successful — regardless of ownership model — are those that create genuine physician leadership, align incentives around patient outcomes and recognize surgeons as partners rather than simply providers of clinical productivity.
David Weiner, MD. Orthopedic Spine Surgeon of MedStar Health (Brandywine, Md.): Health-system employment often offers greater income stability, benefits, infrastructure and referral integration, but surgeon autonomy may be constrained by administrative priorities, standardized workflows and hospital politics.
Private equity typically preserves more visible practice-level independence initially, while compensation is often more productivity-driven and tied to aggressive growth, ancillary revenue and eventual investor returns.
Clinical independence can be threatened in either model: health systems through centralized governance and resource allocation, and private equity through financial targets, staffing reductions or pressure to increase volume. Ultimately, the individual physician contract matters more than the ownership label.
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