Jackson-based Mississippi Sports Medicine and Orthopaedic Center partnered with private equity firm Thurston Group Oct. 2, establishing U.S. Orthopedic Partners.
Glen Silverman, CEO of U.S. Orthopedic Partners and Mississippi Sports Medicine and Orthopaedic Center, discussed why MSMOC sought out a PE partner and elaborated on the vision for the platform.
Note: Responses were edited for style and content.
Question: Why did Mississippi Sports Medicine and Orthopaedic Center seek out a PE partner?
Glen Silverman: While news of PE partnerships have crept into the headlines in the last year, the idea of orthopedics consolidation in the Southeast region of the U.S. seemed a bit farther down the line. Orthopedic surgeons are on the cusp of an expansive growth opportunity simply with the aging population and advancements in spine procedures and joint arthroplasty. In creating our strategy for the next few years, we had to work through a series of questions and discussions that lead us down this path of PE:
1. Did we believe consolidation was coming? We believed it [was] coming, and we wanted to control our own consolidation pathway,
2. PE, although a consolidation model in structure, is far from that operationally. We believe there is an unprecedented runway for growth in the orthopedic sector fueled by both an aging population and friendly insurance trends toward outpatient services, and we wanted to be part of that at a larger level.
3. Next, we discussed the investment model. Most PE opportunities, including ours, are set up where a portion of the practice's value is held back as equity into the newly formed company. If physicians believe consolidation is coming and believe there is a strong growth pathway in orthopedics, then an investment through equity in an MSO makes perfect sense
Q: How will U.S. Orthopedic Partners stand out in the crowded investment field?
GS: We did our homework and looked at the other PE platforms. We wanted to be different. From the beginning, we set this up as a physician-run and physician-friendly model. We spent a lot of time ensuring the clinical governance structure reflected the physician owners who didn't want to lose control of their brand. We also decided early in the structure process to make this a minimally disruptive model. Surgeons, for the most part, do not like change, and ours were no different. USOP believes in growth, not consolidation of resources. We built the model knowing if other practices were happy with their EHR and their practice management solutions, then there is no reason to change [them]; if they are happy with revenue cycle, great, keep that intact as well. Our goal is to help other like-minded groups recognize their growth potential and join us in the investment opportunity USOP offers.
Q: Why was keeping physician autonomy such a big element MSMOC wanted to negotiate when affiliating?
GS: This is the core value of everything we do. We have been a physician-owned company for 35 years. Physicians' ability to practice quality medicine and make decisions around what implants and supplies they use should continue to be their decisions as it directly impacts their brand and their quality. We also knew maintaining autonomy as an orthopedic surgeon would be the single biggest concern for groups considering affiliation with us, and we wanted to make sure this resonated loud and clear.
Q: Three years from now, what does USOP look like in terms of growth?
GS: Although we have much to offer groups that affiliate with us now, our strategy is to build a world-class organization that adds value to a group beyond the obvious. We already have the expertise to help the practice leadership in executing their strategic plan and/or helping them develop one.
We have a chief quality officer who is tasked with taking our strong data collection policies and scaling them to all our affiliated groups. We believe data collection and management helps prove quality and get us a seat at more tables discussing narrow networking and value-based care models as they emerge.
We also have a robust compliance program to help the providers stay compliant with the always changing and often burdensome regulatory challenges. As consolidation continues to emerge throughout the country, we will be well positioned in three years to continue to support our like-minded peers as we all continue to navigate the challenges in front of us.