It's been a strong year for Des Plaines-based Illinois Bone and Joint Institute. The company went on a merger spree with five deals with Northwest Orthopaedics & Sports Medicine in Chicago, Hinsdale (Ill.) Orthopaedic Associates, Bradley, Ill.-based Oak Orthopedics, Park Ridge, Ill.-based Orthopaedic Surgery Specialists, and Chicago Orthopaedics and Sports Medicine.
At the helm of it all was CEO André Blom. He spoke with Becker's Spine Review about how the practice weathered the ongoing COVID-19 pandemic and provided a preview of what IBJI expects in the next year.
Note: This conversation has been lightly edited for clarity and length.
Question: What are the key areas you will be focusing on as we head into 2021?
André Blom: The key areas we’ll be focusing on will be the community and the society around us. Historically, we tend to make a lot of plans on the medical side that are not always in touch with what's happening in the community and society we are in. So, we have to evaluate and adapt to the socio economic landscape changes around us and be sensitive to all the factors influencing our patients. First and foremost being respectful of what COVID-19 has changed and being agile enough to adjust according to it. Hand in hand with that, we're very committed to the "Site of Service". For a patient, that can mean answering their questions such as, "Can you see me at home?" "Can you see me in a telehealth visit versus the clinic?" “If we need to do surgery, do you have options available that fit my pocketbook as well as my preference, whether it's an ambulatory surgery center or a hospital or an outpatient department?”
Q: IBJI has acquired several orthopedic practices this year. What are your key considerations when looking at strategic partnerships with other groups?
AB: We like to partner where we believe there's a potential for growth. When we evaluate practices we look at all the composite factors that can be accretive to IBJI's divisional business and service delivery model and to the different verticals of healthcare that we support. We like to invest in and partner with like-minded physicians who want to remain independent but are willing and able to align with high quality Physicians for the purpose of providing the highest possible quality care and outcomes to our Patients.
Q: Will this remain a key part of your strategy in 2021?
AB: Consolidation in the Chicagoland area in 2021 will continue. In a strange way COVID-19 helped us to take a pause as we on-boarded different practices and took the time needed to work through the challenges that on-boarding can bring with it. At this stage - we want to ensure that we consolidate growth in a qualitative measure and not just grow for the sake of growth alone. One of the reasons that we expanded was that we wanted to be a regional supplier of musculoskeletal services rather than just a local facility - but without losing the community feel of our individual practices. Coming together is the first part and then working together is the second part. Now we have to work on things like brand integration, getting on the same EMR system, which we're moving to next year, etc. Working together is really next for us in 2021, but I think there'll be more consolidation. We think the market in Chicago and in the Midwest is going to continue to lean toward more consolidation.
Q: You mentioned how COVID-19 gave the practice more time to think about partnerships. What were other ways you coped with the first wave of COVID-19 cases earlier in the year?
AB: We took financial planning a lot more seriously in the sense that we're pretty conservative. We practiced preservation without having to vacate some of our initial goals for the year. The situation with COVID-19 forced us to have more meetings than we would have otherwise, and we had more time to discuss where we wanted to go and how strategically we would respond.
We thought about a couple of different service lines and Ambulatory Surgery Centers that were really pushed to the forefront because so many people didn't want to have surgeries at hospitals due to COVID-19; they were scared of hospitals. A lot of our doctors work in ASC's already, but we needed to be more consolidated in that with a business plan moving forward. And we're absolutely executing on that now at the end of this year, maybe into next year. As I stated earlier - remaining agile and providing options to our patients is a critical part of our future - and ASC's very much fits into that as a solution.
Q: How is Illinois Bone and Joint navigating the ongoing challenges brought by the pandemic as COVID cases surge again across the country?
AB: I think we're always worried about the safety of our patients, particularly as the Midwest is a hot spot. We're very invested in the safety of patients with implementing things like cleaning offices and making sure that we practice the highest possible safety checks on ourselves and our patients in the community we serve.
When this recent surge started, we were much better prepared than in March in many ways. We didn't have to switch to telehealth so fast, as we did in March, and we didn't have to be worried about elective surgeries being completely shut down - at least not yet. Now it's more a question of matching the practice to the rhythm of what's happening around us and then waiting for the positive effects of the vaccine or whatever else comes down the line. But I want to be careful, because we're not really adopting a passive waiting style. We're actually pretty aggressive in our investment in some different service lines, especially on the technology side as well.
Q: Can you talk more about some of the financial decisions you had to make this year?
AB: Our financial cycle essentially amounted to things that you would normally budget for and spend every year, and every November we come up with a budget for the next year. That spending is on a quarterly basis and has levers attached to it. Ironically, in 2020, we didn't have to worry about that because we merged with five groups, so we grew anyway. I think we grew about 58 percent, so we didn't have to spend above and beyond that on too many other initiatives.
Where we normally would spend a dollar, we now thought, "Well, let's be cautious and spend 60 cents and just hold on to the 40 cents and see what happens in the fall and into the winter." We generally made less distributions than we normally would, which allowed us to extend ourselves deeper into the year and just added a little bit more of a conservative mindset among our shareholders. Financial planning is a key part of our future - as it should be in every practice.
Q: Are there any expansion plans in the works that you can share?
AB: Yes, there are a couple but due to the nature and timing of things I am not at liberty to share details. Our goal in 2021 was to have an expanded platform of musculoskeletal services that could align with the needs of the patients and the payers as well as related health systems.
I think we will increase our alignment with systems and payers. We believe that larger health systems and payers are eager to partner with a platform that helps them achieve success in orthopedics as a component of the whole health delivery ecosystem. Larger systems have the added pressure of concerns around everything from cardiology to oncology to COVID-19 and a whole host of other items - so we feel that by providing a high quality musculoskeletal platform that they can tap into and partner with effectively, we can play a positive role in being best in class for that segment of the total healthcare dollar.
Q: We've seen a significant number of mergers and acquisitions in the orthopedic field this year. Do you think these larger groups are the future for orthopedics?
AB: We do. We've known for a couple of years that the regulatory changes that were initially brought on, aggressive changes to electronic medical records, for example, that was the first wave that put a lot of pressure on smaller private practices, and I would say that continues to be a pressure point for us or for any of the orthopedic practices.
Healthcare is in an odd spot right now in the sense that the push toward greater transparency and quality, which we welcome with absolutely open arms, is continuing to accelerate. So people want to know, "How good is the provider that I'm seeing?" The hospital price transparency rule that will take effect in January 2021 is going to increase Patients' knowledge of cost and value - as they perceive it - so the consumer demand for that information will only increase. All of those things continue to put administrative pressure on us. Smaller practices can't survive that in the long term.
One of the things that we think is a critical component is cybersecurity. Actually, cybersecurity is something that if you asked me five years ago versus the sophistication that is required of us today, it's massively different from what it was in the past. Those kinds of things compounded are going to make it very, very difficult for small practices, and those smaller practices are either going to partner together and form larger groups or they have to do something else.
Q: Is there anything else you'd like to add that we haven't touched on?
AB: I'd like to emphasize that we were very focused on our OrthoHealth program. We feel that the quality of life combined with what we call orthopedic health — meaning great nutrition, appropriate sleep, monitoring all of our healthcare vitals and doing so in an optimal manner that keeps you out of our surgical offices — is really one of the necessities of healthcare for the future. So we're excited about what can happen and what that'll do. We've got a very large physical therapy presence across the Chicagoland area. So we plan on using that footprint to help people stay healthy and to actually prevent coming to us in the first place. We view that holistic approach as an important cornerstone of our future. We aim to be known for Health excellence all year round, not just healthcare when needed.
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