Orthopedic Groups Should Consider Their Strategic Options Now

Healio April 2018

Gary W. Herschman, Member of the Firm in the Health Care and Life Sciences practice, in the firm’s Newark office, authored an article in Healio titled “Orthopedic Groups Should Consider Their Strategic Options Now.”

Following is an excerpt:

Even if your orthopedic group plans to stay the course and remain independent, your physicians should decide to do so with their eyes wide open as to what strategic options may be available. As a leader of your group, you would do your partners a disservice if you make the decision regarding practice independence in a vacuum, without fully understanding options that may be extremely lucrative to physician owners. Moreover, some options that may be offered now may not be available a few years from now if you sit on the sidelines in the short-term and do not act.

No one can deny that a transformation is well underway in the health care industry, including substantial consolidation, changing reimbursement, increasing value-based payment and risk programs (bundled payments, etc.), enhanced focus on quality and population health, and greater need for advanced electronic medical records and data analytics. This activity is or will be impacting orthopedic groups, and thus, orthopedic groups should be actively considering their strategic options now. Most potential options involve larger, well-capitalized organizations that are investing substantial capital to strategically position themselves and their partners to be successful and profitable as the industry transformation deepens.

The four, main potential strategic options for orthopedic groups to consider are hospitals and hospital-affiliated medical groups; mega-physician groups; private-equity (PE) companies; and national physician services companies.