Musculoskeletal 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.
The 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. There 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. The 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. The 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.'"