Surgeons, Distributors Diversify and Protect Revenue Streams with Orthopaedic Urgent Care

By Julie A. Vetalice

As declining margins squeeze every facet of orthopaedics and reimbursement undergoes yet another change, independent surgeons are seek to diversify their practices to protect existing revenue and develop new streams. Some are aligning with or opening an orthopaedic urgent care center.

In turn, the growth of orthopaedic urgent cares has attracted interest from other industry stakeholders, like major hospital systems and device distributors.

The Centers for Disease Control and Prevention reports 136.3 million visits to the emergency room in 2011 (the last year with available data); 40.2 million of those visits were injury-related. The American College of Emergency Physicians found that 75 percent of emergency physicians reported increasing Emergency Room (ER) visits in 2015. Additionally, 28 percent of physicians reported a significant ramp-up in ER patient volume.

To meet that patient influx, more urgent cares are cropping up around the U.S. According to the American Academy of Urgent Care Medicine (AAUCM), the number of U.S. urgent cares increased from 8,000 in 2008 to 9,300 2015. The AAUCM attributes this spike in urgent care popularity to increasing frustration over ER wait times.

Those visits, in the opinion of Alejandro Badia, M.D., Founder of orthopaedic urgent care franchise OrthoNOW, can become a redundant drain on the healthcare system and an expensive exercise in runaround for the patient. They also represent a largely untapped revenue stream for orthopaedic specialists.

“Most patients, when they see blood, go to the ER. At the ER, doctors may send the patient to an Occupational Health Center or family practice. Those doctors then send the patient to an orthopaedic specialist. But maybe that specialist says, ‘I don’t do complex wrist.’ Then the patient is sent to me. In some cases, I’m the fourth doctor whom a patient has seen,” Badia says.

Badia adds that his peers need to realize that they should not be making money solely when they pick up a scalpel. “Why shouldn’t we treat the ankle sprains that may not need surgery? We have the expertise to determine whether an injury needs therapy, a cast, surgery or even a bag of ice. Those are all clinical decisions that we’re allowing to be made by ER or urgent care doctors. We only make money when the patients are then referred to us,” he says.

Badia says it’s important to understand that these facilities are first and foremost an urgent care and walk-in. “We deal with a lot of splinting, bracing; occasionally we’ll suture something. We’re not doing internal fixation or surgical implants at OrthoNOW,” he says.

But they are generating a patient referral stream for surgery.

Controlling the Referrals
Daniel Goldberg, CEO of Gold Medical Marketing, specialist in public relations for orthopaedic practices, says that general urgent care has begun to siphon patients from internist and primary care offices because they provide a more immediate alternative. If a patient needs follow-up with an orthopaedic specialist, the urgent care center will recommend which specialist to see. Sensing an opportunity, large hospitals and health systems have started to partner with urgent cares to better control referrals and send them upstream to hospital-affiliated providers.

Additionally, Goldberg says, more primary care, internists and other historic referral sources for orthopaedic specialists are being acquired by large health and hospital systems. “Once acquired, these physicians are no longer able to ‘leak’ referrals outside of the hospital system,” he says. That means some of primary referral sources are disappearing or being reassigned because they are becoming part of a hospital system. Aligning with or opening an orthopaedic urgent care can yield new referral sources.

C. Scott Humphrey, M.D., is Founder and CIO of Shoulder Options (a device manufacturer) and Founder and Director of Humphrey Shoulder Clinic. An orthopaedic urgent care recently opened near his practice. Humphrey says that despite the orthopaedic walk-in, his patient volume remains high. That urgent care has affected ER volume, which in turn impacts hospital-employed orthopaedists who receive those referrals from the ER. Humphrey’s private practice remains unaffected. He says that is partly because he has developed a good relationship with the urgent care and its owners.

Having more influence on referral sources can also benefit the rest of the industry. Badia says that two of his franchise owners come from device distribution backgrounds, and he’s had interest from other non-surgeons in opening up OrthoNOWs.

The benefit to distributors in opening an urgent care is their ability to direct patient traffic toward hospitals and specialists who may be using a specific device, he says. Badia adds, as an example, that if a patient has a distal radius fracture and goes to a hospital, that fracture is going to be treated by whatever “two- or three-plate option” that hospital has for distal radius fractures. Control has been stripped from surgeons in choosing their devices. As a distributor, you may suddenly have fewer doctors using your devices.

By opening an orthopaedic urgent care, distributors and surgeons could regain some control over where patients are referred and, thus, which devices are utilized.

“For example, if you’re a Stryker Trauma guy, every fracture that comes to your center could be part of a referral pattern to doctors who use your implants,” Badia says. “If a patient goes to the hospital instead, the process is incredibly expensive and inefficient, and the hospital is also taking control away from the surgeons.”

Mike Lofton, a former distributor and OrthoNOW franchise owner, says opening an orthopaedic urgent care made total sense to him.

“Nobody likes to go to the ER. The way we had to go to work was by walking through the ER. It was constantly packed,” he says. “This model will streamline healthcare.”

Lofton says he is weaning himself off of device sales because he wanted to have a more consistent schedule, but remain involved in orthopaedics. He still sells a few orthobiologic products, but his involvement in their sale has diminished greatly. He believes now that orthopaedic urgent cares will become a staple of the industry.

“We will have to educate the market on what we are and how we work. I think that in a couple of years, people will wonder why they ever went to an ER,” he says.

Questions about this article? Email Julie Vetalice.

Tags: Care Delivery