Happy Holidays - A Look Ahead

Published December 19, 2016

After a very busy and productive 2016, I hope the holiday season provides everyone a chance to enjoy the company of family and loved ones, relax and briefly unwind as we prepare for what will be a historic year for The Centers for Advanced Orthopaedics.

As many of you know, but we haven’t officially shared with the entire organization, The Centers is now recognized as the largest orthopaedic group in the country, both in terms of orthopaedic physicians and number of locations. This means that we are part of a company that is unmatched in its orthopaedic acumen and our vast footprint naturally makes us the most convenient provider of care. That’s a powerful patient-focused value proposition, which is unique to The Centers and gives us a mandate to be true leaders in shaping the future of how orthopaedic care should be delivered.

While speculation abounds, one thing is certain – the new presidential administration will make its mark on the future of healthcare. One significant figure to emerge is Tom Price (R-GA), a former private practice orthopaedic surgeon, who has been nominated as Secretary of Health and Human Services. In a recent statement, Dr. Gerald Williams, Jr., President of AAOS, commented that Price has worked closely with the organization “on issues including repeal of the Medicare sustainable growth rate formula, oversight of mandatory bundled payment models, increasing flexibility within electronic health record programs, defending important in-office ancillary services and protecting the patient-physician relationship.”

Thankfully, no matter how things unfold, we have physicians within our organization that are sought-after experts for healthcare policy discussions, and we have already established an open line of communication with key agencies. This will ensure that we can affect the changes that are enacted, helping the focus to remain on providing the best possible care to patients at an efficient cost.

Looking towards the first quarter of 2017, the implementation of CAO’s company-wide email domain signifies an important step in the maturation of our organization, as it will facilitate effective HIPAA-compliant communication and provide standardized and industry-leading cyber security protocols. As seen in recent national headlines, where Yahoo acknowledged that more than 1 billion accounts were comprised in what amounts to the largest data breach in corporate history, a healthcare company of our size must be acutely vigilant when it comes to protecting its patient data. Many of our administrators have already heard from our partner Thrive Networks, a leader in the field of email domains and management, and everyone will be scheduling calls to review the onboarding process in the coming year.

In addition, Corporate received approval from the Board of Managers to move forward with our final negotiations with Athena. While not a mandate, we recognize that there’s great utility and efficiency in a corporate-wide EMR/PM system, and that’s the direction an organization of our size will eventually want to take. As I noted in my last Corporate Update, currently seven of our care centers, representing about 30 percent of our net revenue, use Athena; and there are four to six additional care centers that have expressed interest in adopting a new system.

Bundled payment models were the central theme of our Annual Meeting, and we’re working closely with Remedy Partners to lead the charge in the rapid shift to value-based care. Next year, we will be launching bundles with commercial payors for total knee, total hip, partial knee, knee scope, cervical spine fusion, ACLs and rotator cuff. This provides a strong opportunity to increase revenue, based on how we effectively manage the entire episode of care, from the first patient encounter through the clinical procedure and rehabilitation.

While our current billing and collection processes won’t be affected, there is a critical need to adapt our clinical culture to effectively manage the coming change in reimbursement. Between 70 percent and 80 percent of all of The Centers’ physicians perform the seven procedures listed above. And, since adoption of these bundles will require a change in care management, a high level of physician and staff involvement and acceptance will be important to the success of our commercial bundled payment programs.

Our Marketing Committee has set brand conversion and patient awareness as our primary strategic objectives for 2017, embracing The Centers brand as we educate our patients about our vast resources and core values. To achieve these goals, we are embarking on a variety of patient-focused initiatives, including the launch of CAO’s social media channels across Facebook, Instagram, Twitter and LinkedIn, the development of a content hub to engage patients with valuable health resources and to highlight their success stories through testimonials, and we will begin quarterly patient communications via printed mailers and email. This is only a small sampling of the activities underway, but they are all tied together by a central theme – we want 2017 to be the year that patients begin to readily recognize and gravitate to our customer-centric brand.

As our peers continue to see The Centers in the news, at leading conferences and in our communities, we are witnessing tremendous interest from likeminded private practice groups wanting to learn more about us. Over the last year, our physician headcount increased 20 percent as we reached 174 orthopaedic physicians, and we see that pace only increasing as our business model continues to prove its efficacy. Tom Shallow, who recently took the position of Regional Director of Development for the Virginia care centers, will be an integral part of the onboarding process as new divisions are evaluated and welcomed into the fold.

Closing out 2016, I’m proud to report that The Centers for Advanced Orthopaedics has never been stronger. We have grown from a fledgling organization into an orthopaedic powerhouse. We enjoy unparalleled clinical expertise, incredible administrators and staff, and the most convenient footprint in the region. This bodes well as we continue to meet with payors, negotiating in a collaborative way where our objectives – providing the best possible care at an affordable price – are very much aligned. We now have a seat at the table, and we intend to use our formidable positon to make a lasting impact on how orthopaedic care is delivered.

In closing, on behalf of the entire Leadership Team, we want to express our sincere gratitude for your tremendous talents, hard work and sheer perseverance as we have collectively built The Centers into an organization we can all take great pride in. However, what gets me excited every morning is that this is only the beginning – just imagine where we can take our company in 2017 and beyond!

Happy Holidays.

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