From Becker’s Spine Review: Spine and Orthopedic Practice Management
Consolidation of orthopedic practices is a trend that will continue, but private orthopedic practices can still thrive, according to Mark Getelman, MD, of Van Nuys, Calif.-based Southern California Orthopedic Institute.
Dr. Getelman, who was recently named the Arthroscopy Association of North America president for 2021-2022, told Becker’s Spine Review about his outlook for private orthopedic practices.
Note: Responses were lightly edited for style.
Question: Where do you think the state of private orthopedic practices is headed in 2021?
Dr. Mark Getelman: While there does appear to be a shift with many new graduates, like our graduating fellows taking more hospital-based jobs, many of the existing private practices are thriving. Contracting and overhead management can be a challenge. Individual groups need to have excellent administrative support and may need to be more creative. There are opportunities for success and practices may be able to navigate the challenges on their own or in partnership with another group or health system. As we have seen in Southern California, some level of consolidation will likely continue, mirroring that of larger health systems as well.
Q: What are the biggest challenges facing private orthopedic practices right now?
MG: There are the usual challenges that private practices face such as payer rate shifts, external competition and access to capital. However in 2020 and 2021, the pandemic has created its own new set of challenges with reduction in office visits with social distancing, lost surgical volume from the recent elective surgical case cancellations due to the COVID surge and increased office expenses to ensure a safe environment for the patients, providers and employees. Stabilizing the workforce and returning to full practice volumes post COVID-19 will be the key moving forward throughout the remainder of 2021.
Q: What will private practices need in order to grow this year?
MG: We have found that growth is our key to success. Many of our expenses are fixed, and adding new productive providers generates more revenue and effectively reduces individual overhead. While there can be short-term impact to the existing partners with growth, we find that most partners are only temporarily impacted and overall growth is beneficial to the group. The practice must have the financial strength to support the new recruits and importantly space to expand as needed. Through the pandemic, commercial real estate in general has become more available. However, this is not the case with medical office space. This remains at a premium and in our community, there is even less availability over the past year.
Q: What should private practices consider when thinking about a sale?
MG: It really depends on the goals of the sale. There are some mature practices that have not grown and they may be looking to sell as an exit strategy. This will be different than for a group like ours, a large growing group with providers of all ages. Perhaps the biggest issue is the trade-off. They must carefully examine the level of autonomy they have today, and decide what they will be comfortable with after a sale. It will be very different and practicing as an employee can be more challenging. Second, the group should carefully analyze whether the new administration will be able to manage their practice as effectively and as profitably as they did in the past.
You can view the original article here: Dr. Mark Getelman on how private practices can thrive