Private equity has remained a hot topic in and outside of healthcare, but what role should it play in orthopedics?
Two orthopedic surgeons connected with Becker's to discuss the role private equity should play in orthopedics.
Ask Orthopedic Surgeons is a weekly series of questions posed to surgeons around the country about clinical, business and policy issues affecting orthopedic care. We invite all orthopedic surgeon and specialist responses.
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Please send responses to Riz Hatton at rhatton@beckershealthcare.com by 5 p.m. CST Thursday, March. 7.
Note: Responses have been lightly edited for length and clarity.
Nicholas Grosso, MD. President of the Centers for Advanced Orthopaedics (Bethesda, Md.): Private equity hasn't been involved in medicine for all that long. We began to see private equity make its way into healthcare in the late '90s and early 2000s, mainly in the dermatology and ophthalmology space. 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.
Unfortunately, many groups go with private equity because of its ease and financial stability.
While I am an advocate of private practice medicine, my viewpoint does not stand alone. An article published in Bloomberg in May of 2020 was titled "How Private Equity is Ruining Healthcare." The article cites an example that shows how private equity's involvement with dermatology in California caused one of the biggest dermatology groups in the state to go bankrupt and dissolve. More recently, The Washington Post and The New York Times wrote about the link between private equity dominance in the market to higher prices of care in the anesthesiology and gastroenterology spaces.
Lastly, I am not a fan of private equity in medicine because physicians … are truly committed to providing value-based care, reducing costs, improving efficiency and improving outcomes. Private equity is all about maximizing profits for its investors. I don't see how the two agendas can be reconciled.
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. The question is why are successful orthopedic practices joining managerial service organizations that are backed by private equity?
1. Solidarity against healthcare consolidation.
2. Shared best practices.
3. Scalable expense reduction.
4. Equity in your practice and your future.
5. Liquidity to expand.
These basic principles are what is driving highly regarded orthopedic practices to band together under one umbrella. All private equity-backed platforms are not equal. Culture is king. It is important to do your due diligence if considering joining.