Becker's ASC Review

13 THOUGHT LEADERSHIP thrown out there as fluff. It's a real issue. e pressure we deal with from the vendor or supply chain manufacturer, when we have a price increase of 15 percent on our packs and nothing has changed with the item, [I wonder] what is that for? What happened when all of a sudden the prices today are totally different tomorrow? It just doesn't make sense. I can't be in the position where I'm buying the exact same packs with the exact same stuff, and these packs are already post-production, but now all of a sudden they cost more money. It seems like post-COVID, there's been a lot of people taking advantage of the system complexity we live in to say, yep, we're going to go ahead and mark this up. e federal government needs to put in some limitations to what these markups can be, because you've got your big distributors and it doesn't seem like there is any accountability from Washington. ey're definitely more willing to say they will cut your Medicare reimbursement but they're not willing to address the other side of the coin. Q: Does this make it difficult for ASCs to stay flexible and adaptable? AL: I think it does. You're not going to save your way to prosperity anymore. You have to pay out salary, wages and benefits, and supplies. From the flexibility standpoint, there is going to come a point in time where some ASCs are going to say it's not worth it. ey are not going to do cases at the ASC anymore because the margins are not there the way they used to be, which is sad because then we're costing the American public more to transition care back inpatient. ere's got to be some accountability to say the ASCs are trying to do the right thing and shi cases. Doctors, especially in private groups that own their own ASCs or own them with a management company, are trying their best to be good stewards of the healthcare dollar. But there's been no shi to really incentivize that from the standpoint of any increased remuneration or cost shiing for cases. n Orthopedic group size: How big is too big? By Laura Dyrda O rthopedic practices have gotten bigger over the years to capture economies of scale and stay independent. But how big is too big? Nicholas Grosso, MD, president of Bethesda, Md.-based The Centers for Advanced Orthopaedics, and Vishal Mehta, MD, president and managing partner of Fox Valley Orthopedics in Geneva, Ill., spoke about their strategies for growth in the future during a panel at the Becker's Spine, Orthopedic & Pain Management-Driven ASC event, June 15-17 in Chicago. Below is an excerpt from the session, lightly edited for clarity and length. Question: What do you think about the size of practice? You've grown tremendously over the last decade. How do you think about size? Dr. Nicholas Grosso: It's local, right? All politics is local, and all orthopedics is local. It depends on your region. You want to be big enough that you can cover your entire region. If you go to a self-insured payer, none of their employees have to drive 20 to 30 minutes to get to where you are. We want to make sure you have geographic coverage. The consolidation phase that we've been in for the last 10 years has been great for us as orthopedic surgeons. When we started off 10, 11 years ago, we were the worst paid orthopedic surgeons in the country. We had the highest overhead and the worst reimbursement in the country. We were literally taking less than Medicare on our commercial insurances. But the payers get smart. They change when the market changes, and they're right now trying to find ways to disintermediate large groups. The way they're going to do that is they're going to create narrow networks and they're going to try to disintermediate you. We feel the next phase of growth is to take these larger groups and link them… The payers want multiple markets. They want a group that can bring them a platform in multiple markets and then that's who they want to talk to. So that's what we're trying to build, and we're trying to do it without private equity money. The size question is variable depending on where you are as far as recruiting goes. Maryland's always been a difficult state to recruit, we are the worst paid state for orthopedic surgeons in the country. If you don't have a local tie, it was really hard to get a [surgeon] to come here out of training…But we've turned that around so it's a little easier nowadays. Dr. Mehta: We meet once a year for a strategic planning meeting and this was a top goal to achieve during our meeting this year. Who do we want to be? Do we want to be local? Do we want to be regional? You have to put some thought into that, and there's always this temptation to want to be national, out of ego. But you have to think about why you're doing that, and for us, the answer is we want to be regional. In terms of size, you need to be large enough. The days of the one or two person orthopedic groups are gone. You need to be large enough where you can defray the technology costs and cover different hospitals. Then on the flip side, the mega groups really have to think about why they are doing that. We are comfortable with the size we're at. We'd like to grow a little bit more, but we don't want to grow and outgrow our culture. The other movement that's happening is we're being approached by private equity groups trying to use us as a platform to create a national model. They'll approach us and try to create a brand that they can roll out nationally. n

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