The future of the solo or small orthopaedic practice may depend on the physician’s ability to adapt to changing payment models, increased government regulations, and new insurance networks.
Courtesy of ThinkStock


Published 9/1/2014
Nicholas V. Colyvas, MD; Howard Sanders, BS

Predicting the Fate of Solo, Small Practices

Will they survive? Can they thrive?

As solo and small orthopaedic practices face an increasing number of challenges, many physicians are being forced to reevaluate their careers. According to a recent survey, young physicians are more than 30 times likely to choose hospital employment over solo practice. Only 1 percent of medical residents in their final year say they want their own solo practices.

This does not bode well for the future of solo and small orthopaedic practices. Prior to the enactment of various healthcare reforms, most notably the Affordable Care Act, many physicians viewed the benefits of solo or small practices as favorable enough to undertake the risks of business ownership and leadership. However, the shift in reimbursement structures from fee-for-service to “value-based” systems is having a significant impact on the risk analysis for solo or small practices.

The expansion of Medicaid and the implementation of the health insurance exchanges, while intended to increase access of affordable and quality health care, are also posing challenges to many physicians in solo and small practices. Economic realities mean that few private practice physicians can accept the low reimbursement rates paid by Medicaid and continue to survive. As a result, many newly insured patients are seeking care through large hospital groups and medical systems that can absorb them or are part of accountable care organizations (ACOs).

At the same time, hospital interest in purchasing private practices is increasing, administrative responsibilities are multiplying, and electronic health record (EHR) requirements are burdening solo and small practices. The introduction of narrow networks and consolidation of referral sources are steadily decreasing the pool of eligible patients. Considering all these challenges, how are these small practices to remain sustainable?

As Darwin noted, “It is not the strongest or the most intelligent who will survive but those who can best manage change.” Adaptation is a necessity. If small and solo practices must turn away patients under new insurance restrictions, then they must modify their business model to attract the types of patients who can help keep the doors open.

Some practices might choose to diversify the care they offer. Others may expand geographically. Other options include fulfilling untapped niche markets, or switching to a concierge practice model. Most often, however, practices combine several changes to achieve the balance of patients needed for profitability. Although not all of the following suggestions will work for all practices, diversification will likely be the key factor in the survival and ultimate success of small and solo practices.

Practice efficiencies
The following practice efficiencies encompass the more traditional business and operational strategies within a specific practice. All have the goal of reducing overhead and/or increasing volume so as to make the practice more efficient and profitable.

  • Increase personal productivity. Delegate nonessential tasks to others; use online tools so that patients can make their own appointments or complete medical histories online.
  • Reduce practice expenses. Take advantage of opportunities such as the AAOS Group Purchasing Program to lower costs for office supplies. (See “A Great Way to Reduce Practice Expenses,” for more information.)
  • Make sure your office space maximizes efficiency. Exam rooms should all have the same configuration and should be clustered to help save steps.
  • Initiate a reminder system to reduce no-shows.

For more ideas, check the online Practice Management Center ( as well as the resources listed at the end of this article.

Get involved
In recent years, several new models of healthcare delivery have been introduced, including bundled payment agreements, comanagement agreements, independent physician associations (IPAs), clinical integration networks, and ACOs. In addition to the primary goal of improving patient experience and outcomes, involvement in these physician integration structures can provide an additional income stream to the solo or small group practitioner.

Although this income stream will seldom be substantial enough to replace clinical practice, it will help compensate the physician for the additional time investment needed for involvement in many of these programs. In some models (such as IPAs), significant regulatory and antitrust concerns may need to be addressed.

Geographic expansion
Although a longer commute time is seldom desirable, the development of a practice location(s) some distance to the home base can expand both the volume of patients seen and the referral base. This level of diversification can also help steady revenue flow if one location is at a high point in its revenue cycle while the other is in a slower phase. The substantial risks and increased costs of additional offices must be weighed against the potential benefits.

Orthopaedists who have a specialty interest may want to consider renting space in another orthopaedic office and providing services there on a regular basis. This may provide advantages to both practices, but such arrangements should be carefully thought through before being implemented.

Medicolegal work
Medicolegal opinions for orthopaedic injuries and issues are always in demand—for both the plaintiff and the defense. Although this field is not covered during an orthopaedic residency, it may be an option for more experienced physicians. While certainly not for everyone, including some of this type of work in a practice can provide a significant income stream.

Before agreeing to provide an expert opinion, AAOS members should familiarize themselves with the AAOS Standards of Professionalism on Orthopaedic Expert Opinion and Testimony. These standards clearly spell out what is expected of an orthopaedist who delivers expert opinions and testimony.

Niche, concierge practice models
Those physicians who have developed a high level of expertise in a niche area can often market this ability to their advantage and attract patients willing to go outside of their insurance network. Practices that offer a high level of service and have a solid reputation and strong referral base may be able to reduce or eliminate Medicare and insurance affiliations by focusing on self-pay and out-of-network patients.

Again, this practice model isn’t for everyone and may not be viable in every market. But it has generated significant media attention and may be worth investigating.

Part-time work
Many clinics, including urgent care and workers’ compensation clinics, deal primarily with primary care issues, but also see a high proportion of orthopaedic injuries. Often these patients are referred into the community and lost to the clinic. As a result, many clinics are now employing orthopaedists on a part-time basis. These part-time positions can provide additional revenue and a source of surgical patients not otherwise available.

In some areas, academic medical centers and university hospitals can offer part-time employment for physicians who have teaching, research, or other abilities and skills that support the vision and mission of the institution. In addition to providing additional revenue, these arrangements can be rewarding to the orthopaedic surgeon and provide the opportunity to teach, be involved in research, and stay up to date with a specialty focus.

Expanded call coverage
Taking call is a commonly employed method of expanding patient base, growing surgical volume and referrals, and increasing revenue. In many places, taking call has evolved from an unpaid requirement for hospital privileges to a valuable paid position. Several different call models are available; see links to resources in the online version of this article.

Industry consulting
Orthopaedic surgeons have traditionally been involved with the medical device industry as inventors, instructors, and researchers. The expansion of technology into the healthcare arena has created multiple opportunities for consulting across the medical spectrum. Many orthopaedic surgeons are getting involved at varying levels in this coming revolution.

The need for physician input in the development and management of technology advances and disruptive innovations provides new opportunities for orthopaedic surgeons. However, increased disclosure and transparency requirements may have an impact on how these activities are viewed. With implementation of the Physician Payments Sunshine Act, orthopaedic surgeons should clearly identify any associations with industry and be ready to answer patient questions about those ties.

Internet practice models
A growing number of opportunities in telemedicine and Internet-based practice models are starting to appear. While it is unclear how these will ultimately fit into the grand scheme of orthopaedic practice, the potential of reaching patients across state or national boundaries must be taken seriously. Second opinion and review sites already are marketing to orthopaedic surgeons.

Orthopaedic surgeons who are interested in these models should move carefully, however, as many legal and regulatory issues have yet to be finalized.

Orthopaedic surgeons have always demonstrated the ability to adapt to and overcome difficult situations, both in and out of the operating room. The significant changes in healthcare delivery systems currently underway pose unprecedented challenges that must be met in the interest of providing the highest level of care to

Nicholas V. Colyvas, MD, is a member of the AAOS Practice Management Committee. Howard Sanders, BS, is is currently a Masters student in biomedical sciences at Tufts University.

Additional Information: