The Washington Business Journal, "Washington-area orthopedists launch mega group"

Published January 6, 2014

Washington-area orthopedists launch mega group

By: Ben Fischer

More than 130 orthopedic surgeons across the Mid-Atlantic region are forming a group that will contract with insurance carriers as a single unit, a practice executives say is the largest independent orthopedic business in the country.

The newly formed Centers for Advanced Orthopaedics LLC is the umbrella organization for 25 previously independent, small practices. They first started discussing a major integration about two years ago, said Secretary-Treasurer Dr. Louis Levitt, a partner at Orthopaedic Medicine & Surgery in the District.

All told, the group employs 1,200 support staff and booked $150 million in revenue last year, Executive Director Denny Tritinger said. Its website launched Monday.

The orthopedists are traveling an increasingly common path for specialists who can't thrive in small practices anymore but want to retain executive control. Washington-area gastroenterologists formed Capital Digestive Care in 2012, following Capital Women's Care in the gynecology/obstetrics space.

Like those groups, the Centers for Advanced Orthopaedics use a federal model. The original groups remain distinct business units that share back-end services, marketing, strategy and technology across the broader group. Every partner is an owner of both their own office and the larger enterprise, and each office contributes to fund the enterprise operations.

Levitt said the orthopedic community had discussed this kind of move before, but only since health reform started unfolding have the doctors decided the risks of remaining small outweighed the potential loss of control of merging.

"There have been iterations of this several times but doctors would never cooperate," said Levitt. "Everybody was skeptical of everybody's intentions. But in the last two years, I will tell you personally, I have never seen such a huge shift in medicine."

Dr. Nicholas Grosso, of Orthopaedic Associates of Central Maryland in Columbia, Md., is president of the combined group. In the coming years, the group will select one of their 18 different digital patient records systems to deploy across the group, Levitt said.

In the traditional health care business, provider-side consolidation is mostly a way to force insurance companies to pay better rates. But in the health care reform era, insurers and doctors are collaborating more as they develop new contracts that reward quality over volume. That is leading them to see the upside of a big group, Tritinger said.

"There's advantages to them," he said. "They have less clout, but the advantage is they work with only one group."

Levitt estimates the group includes about one-third of all orthopedic surgeons in the Washington market, but the group has not attracted antitrust scrutiny so far. The group's 50 offices range from the Maryland's Eastern Shore to West Virginia, and from Baltimore to Woodbridge.

In an age of expanding mega-hospital systems such as MedStar Health and the University of Maryland Medical System, Levitt said it's difficult to argue the Centers for Advanced Orthopaedics control enough of the market to be a problem.

Dr. Stephen Rockower, a partner in Capitol Orthopaedics & Rehabilitation LLC in Rockville, didn't join the group because he and his partners thought they'd retire before benefitting from the consolidation. He called it a "great idea" but he predicted antitrust litigation eventually.

Tritinger said they're not worried.

"We really don't see it as an issue," Tritinger said. "There is so much merging going on in the industry, and with so much good reason."

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