What orthopedic surgeons wish they knew before signing a first contract

For young orthopedic surgeons, understanding the full, long-term outlook of a practice before signing on can be easy to overlook. The business dynamics of orthopedics have also been reshaped by private equity, making those details even more important to understand.

Four orthopedic surgeons and executives recently spoke with Becker’s about the gap between what newly trained surgeons may expect from the business side of practice and the realities of building a career. Their comments were part of Becker’s weekly Ask Orthopedic Surgeons series, which invites orthopedic surgeons and leaders from around the country to weigh in on clinical, business and policy issues affecting orthopedic care.

The question posed was: What’s one thing you’d tell a newly trained orthopedic surgeon about the business realities of practice today that nobody told you?

James Andry, MD, an orthopedic surgeon at DISC Surgery Center at Carlsbad in San Diego, said he would advise his younger self to get a clear understanding of the basic math behind running a practice, especially overhead and productivity. He said taking calls is an absolute must early in a surgeon’s career because it helps support the practice while surgical skills continue to develop.

Andry also said surgeons should ask for the numbers before signing anything. He added that it is important to understand both the immediate and long-term future plans of any practice, since opportunities may come up that were never considered or discussed during training.

Ronald Gardner, MD, founder of Gardner Orthopedics in Fort Myers, Fla., said mentorship is important if the plan is to provide traditional orthopedic care through third-party reimbursement. He said that if economics allow, surgeons should consider not signing up for third-party contracts, taking calls to build a practice the old-fashioned way and delivering highly individualized care.

Gardner said that approach can allow a practice to grow while keeping overhead and logistical headaches minimal.

Louis Levitt, MD, vice president of The Centers for Advanced Orthopaedics and chief medical officer of Medvanta in Bethesda, Md., said newly trained orthopedic surgeons should understand that the medicine they were trained to practice and the medicine they will be asked to practice are increasingly two different things.

According to Levitt, the system has changed, and decisions that once took place in the exam room are now often made in boardrooms. He said those decisions are increasingly driven by volume targets and margin expectations rather than patient outcomes.

Levitt said the surgeons he has seen thrive are the ones who recognized that dynamic early, asked difficult questions before signing a contract and never stopped fighting to keep the patient at the center of every decision. He said old-fashioned medicine may not fit neatly into today’s healthcare system, but the values behind it remain worth protecting.

Alex Vaccaro, MD, PhD, president and spine surgeon of Rothman Orthopaedics in Philadelphia, focused on the effect of private equity on private practice. He said one crucial and often unspoken reality is that the major financial rewards are front-loaded.

Vaccaro said senior partners typically benefit most from the initial private equity transaction and receive large payouts. But he said junior surgeons who join later often find that subsequent recapitalizations, or so-called second bites at the apple, rarely provide the same level of financial return.

He said that creates a disconnect between early expectations and later realities. For new surgeons, Vaccaro said it is important to look beyond the starting salary or buy-in offer and consider the long-term sustainability and true equity potential of the business.

Vaccaro also said that after the first private equity buyout, future value creation often depends on aggressive cost-cutting, expanding ancillary services or increasing patient volume, and that those tasks frequently fall to the newest hires. He said these junior partners may inherit significant debt and added operational pressure, without the prospect of achieving the same upside as the people who benefited from the original deal.

He said the much-touted second bite of the apple rarely becomes a transformational financial event. Vaccaro said junior surgeons should negotiate and secure a path to true ownership upfront rather than assuming a future sale or recapitalization will happen.

The exchange underscores a common theme for newly trained surgeons: before signing a first contract, it is important to understand not just the clinical environment, but also the business structure, ownership path and long-term direction of the practice. The details of any specific contract, future transaction or practice model were not reported in the source beyond the comments shared by the surgeons and executives.