A great brand, excellent customer service and patient care, above all else, are what orthopedic practices must provide to succeed in a changing market.
During Becker's 18th Annual Spine, Orthopedic and Pain Management-Driven ASC + The Future of Spine Conference, Alexander Vaccaro, MD, PhD, spine surgeon and president of Rothman Orthopaedic Institute in Philadelphia, discussed how practices can strengthen their brand and why private equity models are becoming a bigger competitor in the industry.
Below is an excerpt from the conversation. To view the full session on-demand, click here.
Note: Responses are lightly edited for style and clarity.
Question: What does an orthopedic clinic have to be great at to thrive today?
Dr. Vaccaro: No. 1, you have to be great at getting across your brand. What do you represent? Are you there to provide excellence in care? To do that, you constantly have to have great patient experiences. We sort of model ourselves after the Ritz Carlton. We want people to come in, feel calm, relaxed, feel that they're being cared for and that their needs are being addressed. We develop the brand and we get good outcomes. You know how you get a good outcome in orthopedic surgery — you operate on the right patient.
You do the right operation on the wrong patient, and that patient doesn't do well. You've just lost four patients because they're going to get on the phone and say, 'I had this horrible experience with my orthopedic surgeon.' But if you operate on the right patient with the right procedure, they're going to say, 'I was miserable, but now I'm great.' And then you'll get two or three extra patients from that. That's what you need to do. You need to provide great care. The patients have to perceive it, and they have to believe that you're on their side to make it better, and your brand will thrive.
Q: What are you seeing in terms of newer, changing competition?
AV: At my level, strategy is doing something different than my competitor. It's not doing the same things the same way, but doing it more efficiently. Operational efficiency is all of us doing the same thing, but one does it better by scale. If you're ahead of your competitor in any type of business, everyone catches up. So, No. 1, to be competitive in my business, you have to do something different than the competitors, or you have to do something the same, but in a different way.
In terms of competition, we have private equity coming in, we have family money coming in, we have insurance companies trying to buy orthopedic practices with the promise that with their capital, you'll be able to build ASCs, bring patients outpatient, etc. That's what I'm seeing happening in terms of the competitive landscape.
Q: Would you see competition for recruiting orthopedic surgeons from private equity models?
AV: I love what they're doing. When I see a strong competitor, I admire and respect them, and then I figure out why are they a competitor. Why do we fear them? Then, I try to imitate what they do well and figure out what they haven't done well. If you look at a large capital-backed group, the first thing I ask myself is will the customer understand the value provided?
When laser spine was the movement, I would see a patient who had surgery with the Laser Spine [Institute], a big private equity-backed practice. I would ask, 'Why did you choose that particular surgeon?' They didn't know the surgeon's name. Then I’d ask, 'What outcomes did you research in the medical journals to show that that procedure was in your best interest?’ Well, they didn't do any research. So, I was fascinated that it was sort of an equity-backed movement in healthcare that people were drawn to. They were basically drawn to the fact that the word 'laser' meant innovative, modern, advanced, small incision. So, a word made that group competitive. It wasn't the surgeon, it wasn't the procedure. It wasn't the outcome.
So, a discerning person with the resources and the freedom of choice when they need to have a spine operation, will at least say, 'I'm going to go to this place because the brand is great,' or 'I'm going to go to this surgeon because his reputation is great.' They may not go to a large evolving, good business model economic system because it's a moral hazard. They don't have to pay for it yet.