As physician practices and ambulatory surgery centers nationwide strive to grow, many are confronting staffing challenges. It’s difficult to expand into new markets and achieve operational efficiencies when the costs associated with recruiting and retaining talent are at an all-time high.

Tallahassee Orthopedic Clinic (TOC), a practice that delivers patient-centered orthopedic care and sports medicine, has encountered these issues as it strives to expand its footprint in North Florida and Georgia. In search of a pathway to drive future growth and manage the business more efficiently, TOC decided to partner with Orthopaedic Solutions Management (OSM), a managed services organization (MSO).

To learn more about this relationship and the benefits realized, Becker’s Hospital Review recently spoke with two TOC physician leaders — Matthew C. Lee, MD and Hector Mejia, MD — about the organization’s partnership with OSM.

TOC’s journey to an MSO partnership

In 2020, the physicians of TOC began to ask themselves where they wanted the organization to go in the future. The team concluded that simply maintaining the status quo over the long term wasn’t a viable answer.

“If we could freeze time for 15 years and finish our careers doing the same thing that we had been doing, we would have been perfectly happy,” Dr. Lee said. “We love our practice, and we were in a great space financially and geographically. Yet, we can’t stop the influence of external factors that are changing healthcare.”

The practice members wanted to grow and expand TOC, but they were unsure how to go about it. In the short term, the TOC team hoped to enter markets in surrounding areas relatively quickly. At the same time, TOC had developed long-term strategic goals.

“Growth for any company can be quite risky,” Dr. Mejia said. “We wanted a strong financial partner with a proven track record in healthcare initiatives. More importantly, we wanted a partner that would allow us to maintain our clinical autonomy and permit physicians to participate in the company’s growth.”

After evaluating a variety of options over the course of a year and a half, TOC decided that the MSO model was the best way to achieve the team’s longer-term vision.

A key insight: Not all MSOs are created equally

TOC wanted to advance orthopedic surgery in Florida. As a physician-majority owned and physician-led company, OSM was an ideal partner. OSM offers similar access to capital and operational solutions as private equity-backed platforms, but in a more provider-centric manner. “We viewed a partnership with OSM as a way to both grow and manage risk at the same time,” Dr. Mejia said.

OSM is the largest orthopedic services provider in Florida and one of the largest platforms in the U.S. Across 36 locations, the firm has developed a network of more than 150 physicians and more than 400 providers across Florida and Georgia.

“OSM is aligned with our organization geographically, and we have common business goals,” Dr. Lee said. “We are building the pathways to achieve our objectives together.”

The TOC-OSM partnership has yielded fewer staffing challenges + enhanced operational efficiencies

TOC and OSM formalized their partnership in May 2023, so it’s still relatively new. But physician leaders at TOC have already seen positive changes in the organization’s day-to-day operations. “We are trialing OSM’s proprietary software, which is improving operational efficiencies and helping us be nimbler with recruiting,” Dr. Lee said. “We can tap into a larger regional and almost statewide pool of talent.”

For staff recruitment, TOC pulls from larger markets like Tampa, Fla. for its ASCs and mid-level management positions. For physician hiring, TOC continues to focus on doctors that the team knows personally. To ensure the highest quality, TOC’s physicians vet each candidate.

“Our physician hiring model has stayed the same, but we have a greater reach with 100 physicians in Tampa and the surrounding areas,” Dr. Mejia said. “OSM’s fellowship program has also allowed us to find great physicians to join us.”

Further, from an operational perspective, the greater scale achieved through TOC’s partnership with OSM has granted the practice additional purchasing power for supplies. OSM’s software platform is also helping to transform revenue cycle management at TOC.

“We’ve accrued more data throughout the entire state of Florida and have become more efficient with payers,” Dr. Lee said. “That has helped us streamline revenue cycle management and bring cash in more quickly.”

Advice for physicians exploring MSO partnerships

Dr. Mejia said growth is often difficult for orthopedic practices and ASCs.

“Many practices enter into a sort of ‘no man’s land’ in business,” he said. “They are big for their area and they saturate the market. Growing is the next logical step, but it can be painful and it’s hard for doctors in orthopedic practices to do it alone.”

As physicians consider MSO partnerships, it’s important to learn about the landscape and the potential partnerships by talking with colleagues and gathering their insights. “There have been sea changes in the orthopedic space over the last five years,” Dr. Lee said. “Use your resources and talk to friends and colleagues around the country who have either considered or adopted the MSO model.”

While the prospect of partnering may feel daunting at times, Dr. Lee urges leaders not to forget to enjoy the process of learning about the opportunities that exist and exploring MSO relationships. “You learn a lot about business in general, as well as the business of medicine and potential disruptors in healthcare,” he said. “Enjoy the journey, and enjoy the growth.”

Looking ahead to continuous improvements

TOC is confident its partnership with OSM was the right move for the owners and for the organization, at the right time. Already, OSM has provided TOC with resources and capital, shared insights, technology and operational expertise that have helped improve day-to-day operations and have supported TOC’s leadership team with expansion.

“Partnerships aren’t for everyone, but it was the best move that TOC could have made,” Dr. Mejia said. “Since OSM is a physician-majority owned MSO, we’ve maintained our values and our core belief of clinical autonomy, while growing with a partner that can help us meet our goals.”