Internal: The Power of a Unified Purpose

One year and six months ago, we officially launched as The Centers for Advanced Orthopaedics. Looking back, it is remarkable how far we have come in that short time through the combined efforts of our 134 physicians and over 1,200 staff.

When our individual practices decided to join together to form The Centers, it was because we believed in the same vision: “that the private practice model is the best method of care for our patients and that this model must be protected and defended.”  Over the course of the last year and a half, we have taken concrete steps to do just that. The fact that 24 private orthopaedic practices aligned together so quickly to form one of the largest orthopaedic groups in the country speaks volumes to the dedication of our administrators and staff, to the leadership of our doctors and to our conviction to providing the very highest level of musculoskeletal care.

Thanks to the favorable payor contracts that we negotiated with the help of JP Melvin and Dan Veith, many divisions are seeing the financial benefits of their decision to join The Centers. But this is only the beginning; we have also saved nearly 30 percent in malpractice insurance costs (with plans to increase these savings in the future). And we recently signed an agreement with MedStrat, known for being the best-in-the-industry orthopaedics-specific PACS software company.  Under this agreement we are collectively looking at savings of $700,000 in system implementation fees while providing our doctors the ability to share digitized images across divisions.  Similarly, our preferred vendor contract for x-ray equipment will be the lowest in the region. Our contract for Synvisc and other injectables is projected to save The Centers over $700,000 in 2014 alone. In addition, while other independent physician practices are seeing increases in the cost of employee benefits of between 20 and 30 percent, our employee benefits increased in 2014 by slightly little more than 4 percent. And we are looking forward to a very good renewal for 2015. 

These successes, while impressive on their own, are only an indication of how much bargaining power our combined size affords us. From a larger perspective, the leverage we have gained by forming The Centers has positioned us well for the future of healthcare reimbursement. And this could be the most important long-term positioning strategy for The Centers. While large healthcare institutions and insurance carriers have always had influence in our industry, our business model has a very distinct advantage: the direct relationships we have with our patients. We all know the importance of this relationship and now, with the combination of our size and the personal care we provide to our patients, we have a unique advantage in comparison to our competitors. With your continued efforts and support, we will soon be able to control the entire episode of our patients’ musculoskeletal care.

A key component of the sustainability of any business is its ability to handle challenges as well as successes, using both to become stronger and more cohesive. No doubt you are aware of some of the challenges we experienced with the rollout of The Centers’ Revenue Cycle Management process. However, with the support of our partners, JP Melvin, BB&T Bank, Availity / RealMed, and Hyland Software, and the tireless efforts of our administrators and staff, we are working every day to take the corrective actions needed to resolve all issues and to make improvements in the Revenue Cycle Management process. While we’re not entirely out of the woods yet with all “Go Live” concerns, many divisions are seeing improved cash flow.

To my knowledge, the Revenue Cycle Management model that we’ve developed is completely unique across the physician practice industry. It is scalable, reliable and repeatable and it did not require our divisions to make a costly conversion to a single practice management system. Conversion to a single practice management system is typically the greatest barrier to practice integration, and in our case would have required hundreds of thousands of dollars and many hours of work to have even a hope of being successful. The Centers avoided these conversion costs and efforts entirely with the development of the new, forward-thinking model we implemented in the Go Live process. Because of this innovative model, The Centers has successfully collected and transferred over $29,000,000 to our divisions to date. So, while we are still working hard to resolve the remaining issues, we should take pride in the fact that The Centers’ Revenue Cycle Management process is working and that the Go Live goals are beginning to come to fruition.

Our size has been a key factor in allowing us to effectively engage with payors and vendors, and it has also given us a voice to advocate for the future of musculoskeletal medicine and to improve the prioritization of the concerns of our patients. We are already working with the government at both the state and federal levels to ensure that no laws are passed that would restrict our patients from receiving the services they need or in any way constrain the patient-doctor relationship. In addition, the collective efforts of many individuals in our group at the Strategic Planning Meetings will culminate with actionable outcomes that we look forward to sharing with all you after the final meeting later this summer.

There is no doubt that we are in the midst of challenging times for our industry – this is especially true for private physician practices who increasingly find themselves under significant regulatory and financial pressure. However, this is an incredibly exciting time for The Centers as we continue to make a difference in the future of orthopaedics.  While there have been and will likely continue to be bumps in the road, I can see nothing but a very bright future for The Centers. We are already seeing the fruits of the hard work of our staff and doctors. And we thank all of you for your dedication to and continued support of The Centers. We must all remember that we are far stronger standing together than we ever were standing alone.