Key thoughts on integration in orthopedics — Dr. Bert MandelbaumFeatured
On a global scale, healthcare is in a period of integration. Major medical centers and physician practices are merging and acquiring one another to form larger networks and leverage partnerships going forward.
"The integration is a consequence of everything from the narrow networks to bundled payments to a new opportunity at population management with the hospital systems," says Bert Mandelbaum, MD, an orthopedic surgeon with Santa Monica (Calif.) Orthopaedic & Sports Medicine Group. "When you look down to the narrow networks and global fees, as well as bundled payments, there are marketing opportunities in a large group which can still enhance the individual physician."
But the consolidation has a different impact on physician practices depending on where they're located. For physicians in a large group, such as the Hospital for Special Surgery in New York City or Rush University Medical Center in Chicago, there are clear benefits. Surgeons who are part of larger independent physician groups like Rothman Institute in Philadelphia, OrthoIndy or OrthoCarolina can also benefit from economies of scale.
Many of the big networks come in geographical distribution instead of one local environment. The only practices escaping consolidation are those in small towns and rural areas, but even there physicians are seeking alignment with hospitals or other groups. And there are challenges to both practice environments.
"Speaking as a physician directly involved with a large medical group and center, there are challenges for physician leadership in realizing the opportunities in healthcare and developing the right relationships," says Dr. Mandelbaum. "Orthopedic groups want to further enhance and develop physician networks as well as challenge payers in terms of reimbursement levels. They're also challenging the relationship between quality and payments. Physicians need to find a place for themselves before the music stops."
At Kerlan-Jobe, Dr. Mandelbaum is working with his colleagues to find the right balance for expansion. The group is targeting specialists in knee arthroplasty for future growth, as the procedures are expected to increase six-fold in the next 15 years.
"You want to balance your group to meet the demand coming down the pipe," he says. "There are other challenges with the aging population increasing exponentially. There are changes in the hospital dynamics for distributing patients, and the patients who make up our core base are getting older every day."
As the 90-plus year old population grows, their medical costs increase significantly and there is a growing gap between providing the revenue to pay for their healthcare in the physician community. There are fewer healthcare dollars in the Medicare budget to spread around, and the response will be decreased Medicare reimbursement."
In response, the government could increase the Medicare beneficiary age minimum, but the action hasn't been taken," says Dr. Mandelbaum. "From an orthopedic surgeon perspective, there is a greater demand for the ability to manage patients but less money in the social security pot."