Orthopedic surgeons are somewhat divided when it comes to their outlook on private equity in healthcare, with some believing it brings many benefits, while others are a bit more tentative.
Here is what five surgeons have recently told Becker's on how they predict private equity will impact the healthcare industry, as well as the spine and orthopedic sectors.
Note: Responses were lightly edited for clarity and length.
Private equity can work in orthopedics, says DISC surgeon
James Chen, MD. Orthopedic Surgeon at DISC Sports & Spine Center (Newport Beach, Calif.): Private equity in orthopedics has the potential to be very beneficial to improve patient care. However, it is important to keep in mind that not all partners are created equal, which also applies to partnerships with hospitals and other entities throughout healthcare.
What role should private equity play in orthopedics
Nicholas Grosso, MD. President of the Centers for Advanced Orthopaedics (Bethesda, Md.): Today, private equity, whether you like it or not, is here to stay — at least for the near future. The real question is to what extent it will affect healthcare in general, specifically orthopedics. It is important to note that private equity has a single agenda, which is to make a profit. Their priorities are not to provide the best care for patients or make doctors happy. Their agenda is solely to maximize the return on investment.
I have real concerns with private equity being involved in medicine. Private equity is fine in other industries, but medicine is a bit different than manufacturing widgets. I believe that for the long-term health of orthopedics, and healthcare in general, it is important for physicians to maintain control.
Scott Sigman, MD. Founder and Chief Medical Officer of OrthoLazer Orthopedic Laser Centers (Chelmsford, Mass.): Healthcare consolidation of all types is occurring at a remarkable pace. All private equity-backed platforms are not equal. The question is why are successful orthopedic practices joining managerial service organizations that are backed by private equity? Culture is king. It is important to do your due diligence if considering joining.
Orthopedics' 'double-edged sword'
Matthew Harb, MD. Orthopedic Surgeon at the Centers for Advanced Orthopaedics (Bethesda, Md.): Consolidation is a double-edged sword as it can have both positive and negative effects. Most consolidations happen from healthcare groups or when private equity takes over a private practice. Many of these purchases aim to reduce costs, but this can come at an expense. Reducing costs and increasing revenue can happen by decreasing staff or increasing the number of patients seen per provider. Consolation can also have benefits, including improved payer rates, decreased cost of equipment and supplies, higher-quality staff benefits, and easier accessibility to specialists outside of orthopedics. It ultimately depends on who is purchasing the group, their goals and if their views align with the physicians and staff working for them.
1 pro vs. 3 potential cons of private equity in orthopedics
Paul Kosmatka, MD. Orthopedic Surgeon at Essentia Health (Duluth, Minn.): The potential pro of private equity in the orthopedic industry is the infusion of capital for expansion or purchase of necessary equipment, e.g., MRI [machines], EHRs or surgery centers. The cons are loss of autonomy, potential lack of focus on quality and having one more entity making money from the hard work of orthopedic surgery.