Private equity firms acquired 89 U.S. orthopedic practices from 2016 to 2023, and by 2023, 4.8% of the nation’s orthopedic surgeons worked in a private equity-affiliated group, according to an Oct. 15 study published in JBJS Open Access.
Researchers from Brown University’s Warren Alpert Medical School and School of Public Health in Providence, R.I., used PitchBook data, manual web searches and Medicare provider data to identify the practices and their providers at the time of acquisition.
Deal volume climbed 360% from 2020 to 2021, rising from five acquisitions to 23, and peaked at 28 in 2022. More than three-quarters of all deals closed between 2021 and 2023. The authors pointed to pandemic-era financial losses, record-low interest rates and Medicare’s removal of total knee and hip replacements from the inpatient-only list as possible drivers.
Nearly half of acquired practices were in the South. Mississippi had the highest penetration, with 30.1% of its orthopedic surgeons in private equity-affiliated groups, followed by Connecticut at 17.5%. The study found no private equity-affiliated orthopedic surgeons in 19 jurisdictions, including the District of Columbia.
The median acquired practice had 22 providers. Surgeons made up 36.6% of providers, while advanced practice providers and therapists accounted for 53.4%. Sports medicine and arthroplasty were the most represented subspecialties at 24.8% and 18.2%, respectively, while tumor and pediatrics were the least represented. The authors noted that higher-reimbursed subspecialties with heavy outpatient volume were overrepresented in acquired practices.
United Musculoskeletal Partners was the largest platform by headcount, with 682 providers across 11 practices, followed by HOPCo with 407 and OrthoAlliance with 398.
The authors called for future research on how private equity ownership affects provider turnover, practice patterns and clinical outcomes.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
