Although private equity is a debated topic in orthopedic private practice, some leaders believe it can be a viable option as long as the right people are involved.
Here is how two leaders are thinking about private equity:
Alex Bateman, CEO. United Musculoskeletal Partners: Many practices want to grow while still maintaining independence and, for some of them, the PE model can be the right fit. For others, the alliance model can be a viable alternative for groups who are looking to grow through collaboration and shared knowledge. One of the challenges some practices have faced when considering the alliance model is the lack of meaningful data to obtain true insights into their operations, specifically for small to mid-sized groups. Also, some alliances have had varying degrees of success primarily as a result of a lack of investment or capitalization.
As far as the future, it is critical that there continue to be multiple partnership options for MSK groups looking to scale. Different practices will have different needs and different goals, so having differentiated models will ensure practices can choose the best partner based on their unique needs.
David Fitzgerald, CEO of OrthoNY (Albany, N.Y.): The trend done right is really private practice version 2.0. It is bringing in that partner. I'm actually more excited about the way that we're kind of moving to business platforms and how physician groups have decided we can't be just Mom and Pop anymore. We can't compete against the consolidated hospitals, consolidated payers. We need to find ways to do that yet, be able to provide care locally with our own groups, with our own patients, within our own office, within that same seven to 10 people that they may touch.
But you need to have the bigger organization to be able to be big and small. With private equity and the MSOs, that ability to professionalize the practice is really the opportunity to move it to that next level. To be able to compete and to be able to give them kind of back their voice in all these healthcare conversations. I think it's a great trend done right with the right partner, with the focus being on, 'How do we actually make it better?'