In a recession-hounded economy, carefully weigh fellowships and practice types

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Graduates and fellows entering the orthopedic workforce face new challenges created by the recession, aging baby boomers, the evolution of orthopedic subspecialties and the Patient Protection and Affordable Care Act.

The demand for orthopedists with fine-tuned subspecialties has surged to a level that requires most surgeons completing their residency to consider one of the nine fellowship options.

“Currently, the [American Academy of Orthopaedic Surgeons] AAOS estimates that about 90% of residency graduates do pursue fellowship training,” Ryan M. Dopirak, MD, told Orthopedics Today.

More urban and suburban orthopedic practices are carving out niches for underserved orthopedic subspecialties such as joint arthroplasty, according to Joseph C. McCarthy, MD, who trains residents from Harvard Medical School and Tufts University School of Medicine.

With the enticement of guaranteed compensation, controlled overhead costs and increased leverage with insurance companies that larger, hospital-owned orthopedic practices bring, some mark the dwindling days of privately owned or physician-based practices.

“There is less risk or uncertainty with hospital employment,” Dopirak said.

In making employment decisions, Ryan M. Dopirak, MD, said new graduates and fellows should determine their top priorities and review potential agreements with contract attorneys. Image: Peggy Rozoff

The push by the federal government for accountable care organizations that use shared risk models to keep costs down has influenced more residents and fellows to join large physician practices or hospital-owned practices, according to McCarthy. Additionally, larger practices are often in a better position to negotiate with insurance companies, Dopirak said, leading to better contracts with insurers.

“There already is a big impetus for people in private practice to become involved in amalgamated groups or involvements between physicians and hospitals as a shared risk model,” McCarthy said.

Fortunately, orthopedic jobs are still plentiful if surgeons know how to market themselves, prioritize their career goals, understand the advantages and disadvantages of both privately owned and hospital-owned practices, and navigate the supply and demand for orthopedic subspecialties.

Advantages of fellowships

Most orthopedists choose to pursue a fellowship to increase their marketability and gain a competitive advantage. In a study of 498 orthopedic residents conducted by Hariri et al, 91% planned to undergo fellowship training.

Obtaining a fellowship will “enable a candidate or surgeon to build a successful specialty or elective practice more quickly and successfully as opposed to someone coming out without that fellowship training,” McCarthy said. Patients are getting smarter and researching orthopedists’ credentials online. They are looking for surgeons with the most expertise and training to obtain the best outcomes, Dopirak said.

In considering whether to obtain a fellowship, it is important for orthopedists to consider the geographic area they wish to live in and whether they wish to relocate. Orthopedic practices in urban and suburban areas seek more surgeons with subspecialty training, McCarthy said. These practices may already have generalist orthopedists who do basic trauma fracture care and “they are looking to differentiate themselves,” he said.

Opportunities for orthopedic generalists still exist, but they are often found in more rural markets, according to James J. Purtill, MD, director of the Residency Training Program and associate professor of orthopedic surgery at Thomas Jefferson University Hospital in Philadelphia.

“If you were set on living in a nonrural or nonunderserved population, I think the initial worry with being a generalist is that your services may fall on deaf ears because you have somebody else right next to you who has that extra year of training,” Adam G. Miller, MD, an orthopedic surgical resident at Thomas Jefferson University Hospital, told Orthopedics Today.

To study for their fellowships, orthopedists may need to move to another location entirely, which can be “disruptive to family life,” McCarthy said.

“We had a fellow practicing here 2 years ago, and she had a young child and [her husband] was in California and was working, so he could not come,” McCarthy recounted.

“There already is a big impetus for people in private practice to become involved in amalgamated groups or involvements between physicians and hospitals as a shared risk model.” — Joseph C. McCarthy, MD

Another factor to consider when deciding whether to pursue a fellowship: an orthopedic specialist may have a higher earning potential. Current Medical Group Management Association data showed compensation for most subspecialties at a higher level than generalists, Dopirak said. One potential downside, according Scott D. Boden, MD, director at The Emory Orthopaedics and Spine Center in Atlanta, is the cost for an additional year of training, which is substantially less than the money the surgeon would have earned while in practice. This could be a factor if the physician has substantial debt from school. But, as new partners mature in a practice or become “financial breadwinners,” they may receive higher compensation than a generalist, McCarthy said.

Fellowships: Supply and demand

The rule of supply and demand is important to keep in mind when weighing the pros and cons of an orthopedic subspecialty. Most fellowships provide ample opportunities in urban and suburban areas, but shortages may exist in some subspecialties such as joint arthroplasty, spine, sports medicine or foot and ankle, McCarthy explained.

The longevity of baby boomers has led to an increased demand for joint arthroplasties. The need for total knee arthroplasty is expected to skyrocket 673% to 3.48 million procedures a year and total hip arthroplasty will increase 174% by 2030, according to a study by Kurtz et al. Total knee revision will increase 601% and total hip revision will jump 137% by 2030.

“There is going to be a logarithmic increase in the number of patients who are not only becoming senior citizens, but are desirous of total joint arthroplasty, because the fastest growing segment of people wanting total joint arthroplasty are under 65 years old now,” McCarthy said.

Based on research he conducted, Steven L. Frick, MD, told Orthopedics Today, that it is difficult to predict the “ideal number of orthopedic surgeons […] needed to serve a particular population.” Some orthopedic subspecialties are oversaturated or undersaturated depending on supply and demand, he said.

“Surgeon supply in each subspecialty ebbs and flows rather than maintaining a steady state,” Frick, a pediatric orthopedic surgeon at Carolinas Medical Center in Charlotte, N.C., said. “My advice to residents is to follow their passion and go into what excites you the most. Do not pick a subspecialty only because you think there will be a job opportunity in that area.”

Ownership

Residents and orthopedists entering the workforce, should consider the advantages and disadvantages of working in a hospital-owned or physician-owned practice. Hospitals offer a guaranteed salary, easy leverage with insurers and less practice management by the physician. Private practice offers the surgeon more potential for financial investment and autonomy, but less leverage ability with insurance companies.

“My advice to residents is to follow their passion and go into what excites you the most.” — Steven L. Frick, MD

Larger organizations such as hospitals can offer financial stability in that many have a “competitive income guarantee,” for the first few years, Dopirak said. “[They also] may have a larger physician division, and thus, may have better negotiating power with an insurance company as opposed to a small one-, two- or three-person group. This is due to the fact that insurance companies are less likely to walk away from the negotiating table and risk their customers not having access to a large group of medical providers.”

In addition, hospitals have built-in primary care referral bases “so it is not as challenging to build your practice as referrals are essentially guaranteed,” Dopirak said. Hospital-owned practices require less capital investment from the orthopedist because “with hospital employment, some of that cost may be absorbed by the system,” he said. In a private practice, orthopedists take more financial risk by investing in their own buildings and supplies.

However, Frick said that self-employed orthopedists may make a larger profit because they can invest in ancillary services such as physical therapy, radiology and surgical centers. At a hospital, orthopedists’ salary ranges are based on productivity or other measurements, he explained.

“Hospital-owned practices are often viewed as a little bit less risky, but with less risk comes less chance for rewards,” Frick said.

Orthopedists may have to give up some autonomy when working for a hospital-owned practice, depending on their personality.

“It may […] provide that individual with more protection in terms of free time and a better quality of life,” Purtill said.

Hospital-employed physicians also lose control over staff hiring, billing, negotiations with insurance companies and personal work environment, he said. Purtill recommends private practice for those with an “entrepreneurial spirit.”

“If you are willing to have people make decisions for you and are a lot more understanding of all the changes in the way that your operating room and clinic is run, then you may be more amenable to a hospital situation or working for a large insurance-based company,” Miller said. “On the opposite side of that, if you want more autonomy and control over how you operate, how late you operate and how many patients you want to see in a day, those jobs are not as appealing.”

Employment considerations

Dopirak and Boden recommend that orthopedists create a list of top priorities including their desired degree of autonomy, their interests, desired geographic location, setting (urban/rural/university) and whether they want to work in a general orthopedic or subspecialty group, and a hospital-owned or private practice.

“If you are willing to have people make decisions for you … then you may be more amenable to a hospital situation or working for a large insurance-based company.” — James J. Purtill, MD

“The most important thing for new graduates to determine what their top priority is,” Dopirak said. “Is their top priority to get the best financial package possible, to have a busy elective subspecialty practice or to live in a specific geographic location — each of which may take them in a totally different direction.”

For example, if geographic location is the new graduate’s top priority, that surgeon may be willing to defer a busy elective practice to accept a position doing general orthopedics or trauma in a more competitive market, Dopirak said.

“I tell [graduates] you should think about and write out in detail what your ideal career or job looks like,” Frick said. “If you know what you want, it makes looking for the right job opportunity pretty easy because if that job opportunity shows up, you can say, ‘Wow, this fits my wish list.’”

Frick recommends orthopedists ask themselves the following questions when considering what kind of practice to enter:

• What do you want your week to look like?
• How interested are you in academics/education?
• Do you want to be 100% patient care?
• Are you interested in administration or group leadership?

Boden, who is the Spine Section Editor for Orthopedics Today, said that orthopedists may also want to think about the health and functionality of the practice. He recommends orthopedists ask themselves the following questions about a practice:

• Does the practice have high turnover?
• Do the practice physicians solve problems together?
• How well do the practice members get along?
• Is the culture every person for themselves, or do the physicians value the group as a whole?

Importance of mentors

Another important consideration before seeking employment is whether you would have a mentor at the practice.

“For me, the number one thing [young orthopedists] should inquire about is who are the people available in the practice environment to mentor me and help me become the best surgeon I can be,” Frick said.

He added, “If you do not have a senior partner or other partner in the department or group to help you deal with the stresses of being a surgeon and give advice about different cases, patients and life choices, I think it is a much harder road,” Frick said.

Questions to ask interviewers

In addition, orthopedists will want to ask their interviewers questions about the health of the practice, what a typical day is like at the practice and whether there are any opportunities for growth.

“The first, most important question I think [orthopedists] should ask [interviewers] is: Why are you recruiting a new orthopedic surgeon?” Dopirak said. “I believe they must demonstrate they have a need for your services. For me, acceptable reasons for adding a new physician would be the impending retirement of a partner, a desire to add a new subspecialty area to their practice or a need to accommodate increasing patient volume such as in the circumstance of population growth. Unfortunately, numerous groups are looking to hire for reasons that benefit the group more than the candidate. In some groups, they are recruiting to decompress the call schedule or trying to dilute their overhead. In some groups, the new physician’s buy-in will be the buy-out for the senior partner.”

Reviewing your contract

Employment contracts may pose a challenge for orthopedists seeking employment, especially for hospital-owned practices. Orthopedists can rest easy if they consult a lawyer who understands practice law, Miller said.

“In today’s environment, it is even more important to have a contract attorney review your contract,” Dopirak explained. “Especially considering the trend towards hospital employment, there are a lot of potential pitfalls and ways for the new graduate to get into trouble.”

Dopirak suggests discussing Stark and anti-kickback laws, as well as the need for contracts to be consistent with fair market value with lawyers.

“If you are joining a hospital, be aware that many hospitals are tax exempt or nonprofit,” Dopirak explained. “They are under the scrutiny of the [Internal Revenue Service] IRS and, therefore, your compensation may be reviewable by the IRS and it needs to be consistent with the definition of fair market value. If it falls outside of fair market value, you may be subject to fines or other actions by the IRS.”

Set yourself apart

In the end, a good attitude and work ethic will garner more success in an orthopedic career than other more “tangible” attributes, McCarthy said.

“Try to treat your patients, partners, health care people, nurses and other doctors, like family as much as you can because that integrity, work ethic, sensitivity and sense of priority of trying to help others is the great unspoken attribute that distinguishes people ethically and also work-wise to people who do not have that sense of drive and prioritization.”

Recommendations rather than board scores will help set job candidates apart from the pack, Frick said.

“The number one thing is to be viewed by faculty, in residency or in your fellowship, as providing expert, outstanding surgical care,” Frick said. “[It is about] being a professional, kind, caring, easy-to-work-with person who gets along with other people and who the faculty member would say, ‘I’d be comfortable with this person taking care of someone in my family.’” – by Renee Blisard

References:

• Hariri S, York SC, O’Connor MI, Parsley BS, McCarthy JC. Career plans of current orthopaedic residents with a focus on sex-based and generational differences. J Bone Joint Surg Am. 2011; 93(5):e16. doi: 10.2106/JBJS.J.00489.
• Kurtz S, Ong K, Lau E, Mowat F, Halpern M. Projections of primary and revision hip and knee arthroplasty in the United States from 2005 to 2030. J Bone Joint Surg Am. 2007; 89(4):780-785. doi: 10.2106/JBJS.F.00222.
• Salsberg ES, Grover A, Simon MA, Frick SL, Kuremsky MA, Goodman DC. An AOA critical issue: Future physician workforce requirements: Implications for orthopaedic surgery education. J Bone Joint Surg Am. 2008; 90(5):1143-1159. doi: 10.2106/JBJS.G.01305.

• Scott D. Boden, MD, can be reached at Emory University Spine Center, 59 Executive Park South, Suite 3000, Atlanta, GA 30329; 404-778-7143; email: scott.boden@emoryhealthcare.org.
• Ryan M. Dopirak, MD, can be reached at Lakeshore Orthopaedics, 1650 S. 41st St., Manitowoc, WI 54220; 920-320-4500; email: rdopirak@msn.com.
• Steven L. Frick, MD, can be reached at Department of Orthopedic Surgery, Carolinas Medical Center, PO Box 32861, Charlotte, NC 28232; 704-381-8873; email: steven.frick@carolinashealthcare.org.
• Joseph C. McCarthy, MD, can be reached at the Department of Orthopedic Surgery, Massachusetts General Hospital, 55 Fruit St., Boston, MA 02114; 617-726-3865; email: jcmccarthy1@partners.org.
• Adam G. Miller, MD, can be reached at 1015 Walnut St., Philadelphia, PA 19107; 215-955-1500; email: adamgregorymiller@ymail.com.
• James J. Purtill, MD, can be reached at 925 Chestnut St., 5th Flr., Philadelphia, PA 19107; 1-800-321-9999; email: jamespurtill@msn.com.
• Disclosures: Boden, Dopirak, Frick, Miller and Purtill have no relevant financial disclosures. McCarthy is a consultant for Stryker, Innomed and Arthrex, and writes books for Springer.

How much should the current economic climate weigh in the decision of residents and fellows to enter into a physician-based or hospital-owned practice?

Pros and cons in both practice types

Harlan Selesnick

Having been both a physician in a physician-based practice and an employee of a hospital, I have experienced the benefits and negatives of both employment situations.

For a young physician starting out, I would advise that a hospital-owned practice is advantageous in providing managed care contracts, malpractice coverage, a stable income and reduces the entanglements of running a practice such as staffing, government regulation, billing and collections. Disadvantages include losing autonomy, dealing with bureaucracy, having no equity in the practice and significant locale practice restrictions upon leaving the practice.

A well-run physician-based practice has many of these same advantages, but with the sweeping changes coming to reimbursements, insurance contracts and government regulations, this type of practice may be harder to maintain in the future. Also important for the resident or fellow is to choose a location they want to live in and a practice setting that allows them to grow their practice in a favorable environment.

Harlan Selesnick, MD, is the director at the Miami Sports Medicine Fellowship.
Disclosure: Selesnick has no relevant financial disclosures.

No impact on decision making

Richard C. Mather III

The current economic climate is a downturn characteristic of a capitalistic economy and should not affect the decision to enter a physician-owned or hospital-owned practice. The economy will eventually recover, although the timing is uncertain. However, the changing health care environment certainly could affect practice choice.

With greater emphasis on quality reporting, electronic health records and bundled payments, greater challenges face physician-owned groups. The additional workload and cost of meeting these challenges may not be valuable to the individual surgeon. Hospital-owned practices offer the opportunity for increased focus on patient care, but with reduced individual autonomy. However, the price of this autonomy will likely increase making hospital-owned practices more attractive. Physician-hospital alignment has other benefits to both the individual physician and to the hospital. As the two primary provider entities in the health system, working together should lead to higher quality, more valuable health care.

Regardless of the type of practice entered, physician leadership in the changing health care environment is essential.

Richard C. Mather III, MD, is the assistant professor of the Division of Sports Medicine in the Department of Orthopaedic Surgery at Duke University Medical Center & Durham VA Hospital Counter in Durham, N.C.
Disclosure: Mather has no relevant financial disclosures.