Becker's Spine Review

12 PRACTICE MANAGEMENT Why noncompetes are 'worthless' to Dr. Nicholas Grosso By Carly Behm I n his time at Bethesda, Md.-based Centers for Advanced Orthopaedics, Nicholas Grosso, MD, has found physician exits to be rare. Dr. Grosso, president of the orthopedic group, said the practice doesn't demand noncompete clauses in their physician contracts. For other physicians, noncompetes have caused rifts, and many have advocated for an outright ban on them. Dr. Grosso spoke with Becker's about why he dislikes noncompetes. Note: This conversation was lightly edited for clarity. Question: The FTC is set to make a decision on the proposed ban on noncompetes. What would a noncompete mean for independent orthopedic groups like yours? What would be the upsides and downsides? Dr. Nicholas Grosso: Personally, I don't like non-competes. I've been with my practice for the last 22 years, and we've had two or three guys leave. We've never enforced a noncompete. We're not going to make a guy move out of state. I think noncompetes are worthless, to be quite honest with you. The reason why noncompetes exist is because what practices don't want to see happen is they hire someone out of training. They put a lot of money into building a practice, and then the physician goes across the street and sets up a practice. We're smart guys. Our lawyers are smart. They'll come up with some other way, whether it's a clawback provision in their bonuses or something to make it fair. There would have to be some new contract clause that says if you leave within a certain amount of time, you've got to pay us back a certain amount of what we paid you up front. I wish they would outlaw noncompetes, because we run into noncompete problems. We have a lot of physicians who are hospital employees or PE group employees who are exceedingly unhappy and want to come join CAO, and we can't take them because they're being held back by their noncompete clauses. n Orthopedic MSOs remain popular but other options show promise By Carly Behm M usculoskeletal management organizations have been a popular avenue for orthopedic practices to find support amid economic, business and payer headwinds. But in the last year, some physicians have also found success in other consolidation models. Fourteen major private equity-backed orthopedic groups have hit the market since 2017, according to a Feb. 14 report in the Journal of Orthopaedic Experience & Innovation. Big names include USOP, United Musculoskeletal Partners, M2Orthopedics, Spire Orthopedics, OrthoAlliance and American Orthopedic Partners. e past year has still been busy for orthopedic MSOs. Orthopedic Care Partners, OrthoAlliance and Healthcare Outcomes Performance Co. saw a slew of partnerships and affiliations in 2023. And groups like UMP, MedVanta and Spire Orthopedic Partners bolstered their leadership with new hires. "I absolutely believe we will see more MSOs in the future," Emil Engels, MD, CEO of Aligned Orthopedic Partners, said in 2022. "I follow the PPM market closely, and I have spent time as a business professional in two different specialties. I attend meetings with other physicians, and I can say without hesitation that orthopedics and spine is the most exciting and interesting specialty to be a part of right now. I think there will be tremendous activity with more private equity backed platforms entering the market … It's becoming a very competitive landscape, and that's good for physician practices. It's causing disruption. ere are going to be companies that succeed and companies that don't. As a result, it's driving innovation and forcing platforms to differentiate themselves from others." MSOs were projected to be "the next big trend" among spine surgeons in 2022. And while they're still attractive, some physicians are changing their tune. In January last year Chicago-based Midwest Orthopaedics at Rush and Rockford-based OrthoIllinois combined to create OrthoMidwest — an aggregation free of private equity. e orthopedic groups invested equally in developing vertices including imaging, physical and occupational therapy, and ASCs. As an aggregated entity, they can file under one tax ID and continue operating individually. A month later, another orthopedic group rose without needing outside capital — PELTO Health Partners. e group was formed by Durham, N.C.-based EmergeOrtho, Indianapolis-based OrthoIndy and Seattle- based Proliance Surgeons and has more than 400 physicians. For some leaders private equity isn't worth the costs of its promises. "If private equity becomes involved, then you're giving away a great deal of your independence," Frank Aluisio, MD, EmergeOrtho's physician president, said. "We feel that we're an excellent platform to help other independent groups that need help but do not want to go the private equity route. Going forward, we want PE to be synonymous with 'physician empowered' and not 'private equity.'" n

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