Satellite offices1. Make sure new office locations are easily accessible. Rothman Institute in Philadelphia recently announced the opening of its 15th office in the Philadelphia-South Jersey area, and every time the practice expands, location is one of their central focuses. Rothman CEO Mike West says leaders must find a good location that will be easily accessible to the residents of that community. For example, after a while the practice began to outgrow its office in Voorhees, N.J., so they decided to ease the burden on that office by constructing a new location in Marlton, which is a little further north.
"This location really provided accessibility to the residents of South Jersey," says Mr. West. "Our South Jersey office is our fastest growing area — we experienced a 30-35 percent growth over the past three years. We see positive population growth in the future because we are opening offices in areas we haven't captured before with our other offices. By expanding, we hope to make our physicians easily accessibly for our patients."
However, it is always important to gauge the potential for success before making a commitment to build in the community. Rothman collects population demographic information first and then evaluates the potential patient volume. Taking on a hospital partner helps make the expansion less risky and begins to grow your professional network in the area.
2. Figure out whether there will be a hospital willing to partner with your practice in the new location. When the Rothman Institute expands to a new location, the potential for a good relationship with the local hospitals is among the first things considered. A primary goal of the practice is establishing strong relationships with a hospital partner, which allows practice physicians to integrate with the hospital but remain independent.
"One of the ways we are able to do integrate is through co-management arrangements where we partner with the respective hospitals by getting our physicians to participate in leadership positions," says Mr. West. "We think that by integrating with the hospitals, we are able to serve the same roles that hospitals are looking for when they hire physicians. We try to meet the hospitals' strategic needs while giving the physicians an option to remain independent."
These relationships will become even more important as the healthcare landscape continues to evolve, Mr. West says. "We look to the future and regardless of whether there are patient networks or provider networks, we want to make sure we feel comfortable partnering with key hospitals in our perspective areas," he says. "We understand the importance of great hospital relationships and integrating more with hospitals in the future, especially post-healthcare reform."
3. Decide which services to offer at the satellite location. Sometimes, satellite locations serve a large population and can include several specialists to meet the needs of that area. Other times, satellite offices are used more as ancillary support. For example, patients might visit the central office for their clinical visit, but could undergo prescribed physical therapy at the satellite location closer to their home. In some cases, hiring non-surgical specialists to see patients at these offices will allow patients easier access to medical professionals best suited for their care while giving surgical specialists the ability to spend more time with surgicla patients.
Mergers4. Convincing all surgeons of the need to expand can be challenging. One of the biggest challenges Michael Schwartz, MD, board president of OrthoTexas, and the other physician partners faced when deciding to merge their practices was bringing everyone from all four practices on board and moving in the same direction. "Everyone was used to being part of smaller practices and being heavily involved in the management decisions," he says. "When you have a large group, you can't have all 25 physicians involved in every decision or you'd get nowhere. You have to establish a board of physicians with representatives from every group and meet often to make sure everyone has the same goals."
Bringing the different physicians together was difficult because they had been rivals for years, competing for patients in the same community. After the merger, these competing physicians suddenly became partners striving for shared success.
5. Agree upon a group ethic and stick to it. When OrthoCarolina was formed in 2005 as a result of a merger between Miller Orthopaedic Clinic and Charlotte Orthopedic Specialists, the partnering physicians made a commitment to devote their efforts to the group and provide excellent care. Now, any physicians or groups wishing to merge with OrthoCarolina must also make the same commitment to foster a singular practice culture. "It's more important to support the interests of the group than of one individual," says Daniel Murrey, MD, MPP, a spine surgeon and CEO of OrthoCarolina. "We are also fortunate to have a great core group of surgeons who have stuck to an ethic of taking care of the entire community and really partnering with our healthcare system and providers to make sure we are improving the system of care."
When partnering with other physicians or groups, be explicit about practice values. "We let people know that a lot of what sets us apart is how we express our vision," says Dr. Murrey. "Anybody that joins us would support our reputation for service and access to quality care and will be compliant with the rules and policies of the practice."
6. Devise a successsion plan that includes all new group members. Ideally, orthopedic practices will have a succession plan written from inception and every surgeon who becomes a partner agrees to the plan at that time. However, this doesn't hold true in many cases, especially for small groups or single physician practices. If a plan wasn't created at the onset, orthopedic surgeons should begin succession planning at least five years before they plan on retiring because the transition can easily take two or more years to complete.
"In my experience, physicians are often unprepared for the final moment when they move on," says Glenn Molin, DC, MBA, a senior business intermediary at CI Harvest in Columbia, Md. "Hopefully, their financials are in order and they have a team in place that was there from the onset enabling them to create a practice that runs like a business because there will be issues and consideration with taxes, Stark laws and liability. If you deal with it early upfront and allow the plan to be fluid and flexible, it will be much easier when the transition occurs because you'll know exactly what you need."
The succession process includes several steps:
• Writing an agreement for succession planning between the surgeon and the practice
• Locating a successor for the practice
• Performing valuation of the practice
• Initiating and completing the financial transaction
• Transitioning patients to the new surgeon
Related Articles on Orthopedic Practices:
Improving Orthopedic Patient Care: 7 Tips for Developing Physician-Patient Partnerships
5 Principles of Rothman Institute's Innovative Orthopedic Practice Business Model
10 Tips for Aspiring Orthopedic and Spine Group Leaders