Why 2 Chicago-area orthopedic powerhouses became one

Practice Management

Brian Cole, MD, managing partner at Midwest Orthopaedics at Rush and Brian Bear, MD, president of OrthoIllinois have a longstanding friendship. They have known each other for almost 30 years and were in the same residency class at New York City-based Hospital for Special Surgery.

Their collegial relationship is reflected in the relationship between their practices. Some members of OrthoIllinois trained as residents at Rush with the MOR physicians and developed a similar philosophy for patient care, research and innovation.

Midwest Orthopaedics at Rush is a large Chicago-based orthopedic group with an eye on expansion. Three years ago, the independent, physician-owned group did a deep dive into private equity as a potential pathway, but ultimately decided to grow organically and by aggregating with like-minded orthopedic specialty practices instead.

"We realized a few things at that time," said Brian Cole, MD, MBA, managing partner at Midwest Orthopaedics at Rush. "First, we placed a premium on maintaining our independence. Second, we realized in our exercise with private equity that there was still a lot of value we could create ourselves. We took a different pathway to maintain our independence and create value."

On Jan. 3, Midwest Orthopaedics at Rush announced its first big partnership since then with OrthoIllinois. The two practices aggregated and are now operating as separate divisions of a single entity: OrthoMidwest. Both groups invested equally in developing vertices including imaging, physical and occupational therapy, and ASCs. Aggregation allows them to come together under one tax ID number, but continue operating autonomously as divisions of OrthoMidwest.

One major difference between the practices is location. While Midwest Orthopaedics at Rush lies just outside of Chicago's downtown epicenter and extends into northwest Indiana, OrthoIllinois primarily covers Chicago's far west suburbs based in Rockford, Ill yet extends to Illinois’ northern limits including Elgin and southern Wisconsin.

"There are differences in how economics are managed and with some areas of our respective practice verticals with small differences in how our organizations are run," Dr. Bear said. "With aggregation, we each keep our independent brands. Eventually, we hope to blend together to become one. Today we are combining to execute joint ventures where both organizations can overlap emphasizing our unique strengths. We will be focusing on intentional, yet responsible growth."

If a formal merger were to be completed, that would hinge on near-term business metrics determined over three to five years, Dr. Cole said.

Each division has a board of managers that will work together to navigate economic and business challenges, including value-based care. Outside of BPCI and ACO’s, value-based care has not permeated the Illinois or Wisconsin markets leaving a signficiant opportunity for the new group which emphasizes quality and excellence in patient outcomes. OrthoMidwest will collectively have more than 350 providers bringing them significant scale to present and discuss opportunities with payers.

"We are optimistic that we can do things collectively and collaboratively that we couldn't do before," said Dr. Cole.

Embracing value-based care requires organizations to have a sophisticated business and IT infrastructure to make smart decisions and scale efforts and OrthoMidwest hopes to continue with this growth trajectory the future.

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