Becker's Spine Review

28 PRACTICE MANAGEMENT MSOs becoming attractive option for physician-owned orthopedic groups By Alan Condon A ligning with musculoskeletal man- agement services organizations is becoming a more attractive strategic option for some orthopedic practices as economic, payer and administrative hurdles continue to challenge physician-owned groups to maintain independence. e list of tasks medical practice managers must address — coding, billing, compli- ance, payroll, revenue cycle management, etc. — requires a significant amount of time. Ensuring a practice is getting the best pric- ing for supplies, implants and services as well as tending to day-to-day issues can prove overwhelming, which is where MSOs aim to help out. MSOs are designed to alleviate the increasing administrative burdens independent practic- es face and are typically owned by hospitals, groups of physicians, hospital-physician joint ventures or, increasingly, private equity investors and commercial payers. Arguably the most significant benefit to or- thopedic groups joining larger networks — as healthcare continues its push from fee for service toward a value-based care model — is the ability to share cost and outcomes data with like-minded practices, essential in con- tract negotiations with commercial payers. In addition, MSOs seek to ensure best pric- ing on supplies, implants and services. MSOs aggregate volume and as such, they acquire economies of scale that allow them to secure preferred pricing from insurers and vendors. Consolidation is occurring at an acceler- ated rate during the COVID-19 pandem- ic, with independent practices selling to hospitals and corporate entities. However, many physicians are increasingly attract- ed to MSOs that allow them to "maintain their brand identity, clinical autonomy and a level of income that they're accustomed to," said Graham Young, vice president of mergers and acquisition at U.S. Orthopae- dic Partners, an MSO formed in the South- east in October 2020. USOP acquired Birmingham, Ala.-based Andrews Sports Medicine & Orthopaedic Center in December and penned letters of intent with two more practices, Mr. Young told Becker's. The MSO has six affiliate practices that operate 22 locations across Mississippi and Alabama, and it aims to double in size by the end of 2022. The plat- form is also targeting expansion into the Midwest. Meanwhile, in Ohio, Cincinnati-based MSO OrthoAlliance kicked off 2022 by adding New Albany-based JIS Orthopedics, expand- ing its network to more than 70 physicians and 1,100 employees. OrthoAlliance, jointly owned by private eq- uity firm Revelstoke Capital Partners and Sharonville, Ohio-based Beacon Orthopae- dics & Sports Medicine, has more than 25 affiliate offices across Ohio, Kentucky and Indiana, with growth plans for the Midwest and Southeast. In the South, the newest MSO to enter the U.S. market is private equity-backed Novum Orthopedic Partners in Dallas, which was formed aer closing partnerships with three physician-owned orthopedic practices in December. Georgia's largest orthopedic group, Atlanta-based Resurgens Orthopae- dics, also secured private equity investment to build a company that seeks to affiliate with "like-minded, entrepreneurial orthopedic practices around the country," CEO Alex Bateman said in December. e expansion of these musculoskeletal-spe- cific MSOs, and the births of new ones, is a strong indicator many independent physi- cian groups are considering such partner- ships over affiliations with hospitals, health systems or other corporate entities, where brand identity and clinical autonomy is oen sacrificed. n Colorado hospital expects up to 70% decline in orthopedic revenue in 2022 By Alan Condon A spen (Colo.) Valley Hospital executives are predicting an up to 70 per- cent decrease in orthopedic revenue in 2022, which equates to about a $20 million hit to its bottom line, The Aspen Times reported. About 37 percent of the hospital's revenue comes from orthopedics, followed by its emergency department (22.2 percent) and primary care (10.9 percent). But in anticipation of orthopedic procedures shifting to the outpatient en- vironment, Aspen Valley partnered with Steadman Clinic and the Steadman Philippon Research Institute to build a 65,000-square-foot surgery center in Basalt, Colo., which CEO David Ressler expects will attract patients from across the country. The ASC, a joint venture between Steadman Clinic, Gainesville, Fla.-based Orthopedic Care Partners, Aspen Valley Hospital and Vail Health, will open in March. It features four operating rooms, a procedure room, a biologics lab, nine preoperative and postoperative rooms, and 14 recovery rooms. "When that surgery center generates profit ... we will receive 25 percent of our share of the profit," Mr. Ressler said at a Dec. 13 board meeting, according to The Aspen Times. Aspen Valley plans to move 70 percent of its orthopedic cases to the ASC. n

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