Home Private Equity 2 surgeons under 40 on private equity, the future of orthopedics

2 surgeons under 40 on private equity, the future of orthopedics

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Two surgeons under the age of 40 discuss where they see the future of orthopedics heading, and the role of private equity in practices moving forward. 

Question: What are the biggest challenges facing orthopedic surgeons moving forward?

Phillip Louie, MD. Virginia Mason Medical Center (Seattle, Wash.): Some of our biggest challenges include upcoming production and volume goals amidst enormous financial losses throughout healthcare, short staffing, burnout and hospital capacity amidst an ongoing pandemic and financial losses that may be generational. 

With mounting pressures to produce financial and volume targets with limited resources (and temporary resources at many locations), there will be an enormous focus on producing quantity of work. I worry that all the work that we have accomplished in building value-based care pathways, developing quality-based programs and academic pursuits to innovate, will take a back seat to providing the greatest volume of care to “catch up.” 

We are all facing the same pressures, so we must all continue to find opportunities to innovate, invest and collaborate in areas that support quality of care — knowing that best care will also be the one that is in the best interest of all stakeholders: the patients, the providers, the administrators/executives and healthcare as a whole.

Jeffrey Mullin, MD. University at Buffalo Neurosurgery (N.Y.): I think barriers preventing surgeons from providing the best care to our patients will continue to be our biggest challenges. This includes insurance denial processes and hospital staffing issues. 

Q: What are your thoughts on the role of private equity in orthopedics?

PL: I see both sides of this issue. The private equity collaboration is likely here to stay, and is part of our new environment. The forces of an ongoing pandemic, hospital/medical center financial crises, insurance companies and the government have significantly altered the healthcare environment in which we work today. In the setting of smaller private practices, private equity ultimately provides an exit strategy for those who have devoted years to building the practice, while also obtaining potential access to the best technology, education and resources to care for patients. In groups with a spectrum of seniority, private equity may present opportunities to reduce the “buy in” for your partners. 

But I feel like there is a fundamental lack of mission-agreement between the business models of private equity and healthcare practices. In medical practices, the physician-owners are responsible for the success of the practice, often by placing the primary focus on patient care, and allowing revenue and profits to follow. Once private equity becomes involved, there becomes a much greater focus on maximizing those revenues/profits. Of primary importance, now becomes the ability to grow the practice’s value and EBITDA in the event of a future liquidation event, in which all the major stakeholders would benefit. That practice must find the right private equity partner and hope that this new governing body will be a good steward of patient care and practice culture.

JM: I have made my practice decisions to maximize my autonomy. I have concerns about the benefits of partnering with private equity (often to offset frustrations with question 1) being nothing more than a Faustian bargain.

Q: What new medical advancements are you keeping an eye on right now? 

PL: Machine learning and artificial intelligence. This hot topic will play a large role in providing greater safety and value to our patients, through the growth of enabling technologies and reducing the cost of surgery (and spine care as a whole). The expansive data we are currently collecting through diverse avenues will allow multidisciplinary teams to assess how we can perform surgery through the use of more integrated real-time systems that will reduce the number of trays necessary, improve surgical accuracy, reduce operative times and radiation exposure, as well as decreasing the risk of iatrogenic complications during surgery.

Augmented reality has been a game-changer in how we prepare and perform spine surgery. However, much like the current widely-adapted robotic technology, the initial focus has been on osseous anatomy. The ability to evaluate neurologic, vascular, muscular, and other anatomic variables will be critical in the advancement of this technology. Specifically in spine surgery; portions of surgery including exposure, removal of soft-tissue masses, decompression and osteotomies will greatly benefit from these advancements.

We will see the collaboration of multiple industries and research minds that will drive these changes in an evidence-based manner that can keep up with the demands for higher quality care in a cost-constrained landscape.

JM: The advancements I am most focused on are at opposite ends of the spectrum. I believe there is some potential in patient specific implants/planning that could be rewarding in the future. 

On the other end, I believe we will learn a lot in the coming years using big data. This can allow AI and predictive modeling to hopefully result in better outcomes for our patients.

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