Originally published on Becker’s ASC Review
In 1966, Eric Clapton, Jack Bruce, and Ginger Baker formed the band Cream. Each member was a star in his own right, leading most music historians to crown Cream as the very first “supergroup,” coining the now popular phrase.
Today, it’s orthopedic supergroups that are on the rise. Orthopedic surgeons are finding practical and strategic advantages to joining forces and integrating their organizations. For some practices, these orthopedic supergroups can represent the best possible way to remain competitive. But for others, the costs may outweigh the benefits.
What is a Supergroup?
An orthopedic supergroup is a fully integrated organization that combines and consolidates independent orthopedists and orthopedic groups into a single practice with a single tax identification number. There are several models one might follow when forming a supergroup. The most common such options are:
Why Are Supergroups Forming?
Supergroups present enormous advantages when it comes to combining resources, leveraging payer contracting networks, reducing costs, and accessing economies of scale. In this way, supergroups can protect against reimbursement reductions and address patient concerns about the increasing cost of healthcare.
In an era where big hospitals and practices can control a regional market, supergroups offer a strategic advantage, allowing more modestly sized practices to remain independent and position themselves for growth.
Successful Newly Formed Supergroups
Successful orthopedic supergroups have formed all across the country. Examples of particularly successful supergroups include:
Key Advantages of an Orthopedic Supergroup
Supergroups are on the rise in large part because they offer substantial and substantive benefits–on both organizational and personal scales.
A supergroup will have an improved ability to develop ancillary revenue enhancements, such as Ambulatory Surgery Centers (ASC), Imaging Centers, or Physical Therapy and Rehab facilities. Supergroups also present an opportunity to broaden specialized programs and services, such a spine, hand, joint, or sports medicine services.
Additionally, because a supergroup represents a larger patient base, they will have enhanced negotiation power with managed care payers and insurance networks.
Financially, supergroups will have access to economies of scale for vendors, administration, staffing, and operations. Supergroups also have improved access to capital for technology and growth as well the ability to centralize that technology for clinical integration.
An orthopedic supergroup may also lift some of the weight off of each surgeon’s shoulders, improving personal quality of life.
But There Are Some Disadvantages
There are some drawbacks to forming a supergroup. For one, they are costly and complex to form and the larger they become, the more complicated they are to govern. In some ways, running a supergroup is like managing a large enterprise.
Surgeons who form supergroups do also give up some of their autonomy in order to maintain the centralized infrastructure and management.
Should You Form a Supergroup? Some Key Considerations
Physicians should consider the alignment of cultures and practice values before any supergroup formation takes place. Staff salaries and benefit structures should also be considered, as should quality and utilization profiles. Additionally, if an orthopedist or orthopedic group is already a member of an IPH, PHO, or ACO, there may be restrictive covenants already in place you should consider.
Foundations for Success for Orthopedic Supergroups
When forming a supergroup, it’s essential to build from a strong foundation. Surgeons should plan for:
Orthopedic supergroups represent a significant opportunity for practices large and small. In 1966, Cream changed music forever. It’s safe to say that orthopedic supergroups are doing the same thing today, improving the lives of both patients and physicians.
[Ref 3] https://www5.aaos.org/uploadedFiles/PreProduction/Membership/Member_Resources/prac_manag/Principal%20Strategic%20Options%20for%20Orthopedists%20to%20Remain%20Independent%20in%20our%20Rapidly%20Evolving%20Health%20Care%20System%20White%20Paper(1).pdf
This post was first published June 14, 2021 and was updated June 15, 2021.