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This is Carly Beam with the Becker Spine
Orthopedics podcast.
I'm thrilled to be joined today by doctor
Michael Menaggini
of Indiana Orthopedic
Institute.
Doctor Menaggini, thank you so much for being
here today.
Well, thank you for being on and for
having me.
Absolutely.
So before we dive into some questions, could
you introduce yourself and tell us a bit
about your background?
Sure. Yeah. My name is Michael Mannagini. I'm
the CEO,
and founder of the Indiana Orthopedic Institute. I'm
a hip and knee replacement surgeon. Been in
practice for twenty years. Did my residency at
Rush
University in Chicago and my fellowship in hip
and knee replacement at Mayo Clinic.
Thank you. And,
you know, today, we're recording this on February
14. And
yesterday,
Indiana Orthopedic Institute
had cut the ribbon on its new location
in Noblesville,
Indiana. Can you talk about, this
milestone
and some of the goals you have in
terms of growth, especially with this new location?
Yeah. Absolutely. And thanks for the opportunity to
talk about it. We, about two and a
half years ago,
we, started the Indiana Orthopedic Institute with,
myself, my team, two nurses,
my physician assistant,
our director of anesthesia,
perioperative medical physician,
and our director of research.
Really,
that foundation two and a half years ago,
if you look at who those who those
stakeholders are in the patient care continuum, it's
really about creating vertically integrated
model of orthopedic care
that's also supported by
research,
and education.
And
take bring it forward two and a half
years,
and we now have a statewide program,
three,
three markets in Indiana, Terre Haute,
Indianapolis Metro, which is Noblesville, which is a
a northern suburb of Indianapolis, and then another
market in Fort Wayne.
We have 14 surgeons,
20 providers,
52 employees as of today.
And so that growth,
has been spectacular.
And,
and then to to cap that off yesterday
was the opening of our flagship facility. And
that and that flagship facility is 40,000 square
feet.
It has a four room ambulatory surgery center.
It has,
it has a medical office building
above it that,
has 20 exam rooms,
enough for, you know, up to, you know,
five,
physicians,
to see patients in a day, has its
own physical therapy,
its own education and conference center, and its
own biomechanical gait laboratory,
for our research,
on,
knee replacements.
And so it's really that facility
is our flagship where we can really take
that vertically integrated care model,
at which the health care needs right now.
I mean, the ambulatory surgery center is a
lower cost of care than hospitals, and so
non acute orthopedic procedures, which the majority are
really,
should be performed in an ambulatory surgery center,
not in a hospital. So we're able to
do that all under one roof, encapsulate that
entire vertical integration.
Sounds like a really
comprehensive
location.
And, you know, when you think about the
way
things are in health care this year,
what excites you about
overseeing this orthopedic group, and what makes you
nervous?
Yeah. So that's a great question. So what
excites us is that I think we're being
innovative
in how we deliver health care.
I think we're gonna see,
and and all the signals
from
this current government administration,
from the major payers in health care,
we're going to start seeing finally a shift
towards value based care where
instead of just a fee for service model,
we're gonna start being,
compensated,
and even rewarded,
for
taking risk and delivering high quality
care at a lower cost and a lower
site of service. And that's what excites us
about the model that we've built,
and now two and a half years into
it, being able to
open up a facility that can that can
accomplish
and be very successful in value based care.
What makes me nervous is probably what makes
everybody nervous,
which is being an independent
orthopedic group,
in an era of high labor cost and
high inflation
and decreasing
overall reimbursement.
So
we have to be we have to run
a practice and business and orthopedic group,
very lean and very efficient.
And I think the advantage we have and
why we're excited is we just started this
two and a half years ago.
And so we started it in the era
of high cost,
of labor, high inflation.
So we've built ourselves in our practice lean,
and I think that's that's helpful in the
modern era.
And can you dive into some more strategies
on supporting margins,
you know, amid all these rising costs in
health care delivery?
Yeah. It's a challenge. And I think
the way we we go about it in
in multiple ways. For us to keep our
margins reasonable,
we have to be really judicious about what
we do in this in this facility, in
our other facilities, and in our programs.
So take take something really expensive like a
robot.
Now, certainly, the industry is trying to bring
the cost of robots down, but we may
not be able to do that
immediately,
because it's a really high cost,
technology,
and we have to be very thoughtful about
how we do things like that. The other
thing is is,
quite frankly, getting enough
scale to
to offer and cover enough patient lives where
the payers
will give us, you know, reward for the
quality that we perform on our patients. So,
like, we have nine hip and knee replacement
surgeons. And when you have nine hip and
knee surgeons,
you have enough scale where you can at
least come to the payers and say, don't,
you know, crush us financially. We're trying to
do a great job,
taking care of your patient lives and your
insured lives,
and delivering high high quality care at a
low cost. Now those, obviously,
that's not a guarantee, but I think so
far we've been reasonably successful doing that.
And, you know, I know you guys are
part of HOPCO. Can you talk about how
this partnership has benefit the practice so far?
Yeah. You know, Opco
has been a huge asset for us, and
you talk about how you maintain margins. Well,
that's just the margins in the business.
How you maintain surgeon compensation
so that they remain employed
or remain not employed rather,
and that they can be in private practices
to is to bring other revenue streams
to the practice,
to supplement their compensation.
And Hopco is such a versatile company.
They've helped us on the comp payer contracting
side. They've got a whole value based care
arm that our value based care team works
in concert with, and that's another revenue stream
for the positions going at risk.
They have the ability to do clinically integrated
networks with other groups
in in the area.
They,
have the complete,
digital integration
and a tech platform that we utilize that
we're utilizing this facility
that helps bring down the cost
and also streamline efficiencies because they're all on
one under one umbrella. For example,
most ambulatory
ambulatory surgery centers,
have a disparate,
electronic health record. Some of them are still
on paper in The United States.
Well, what we've done in this building through
HOPCO is we have our Ascena EMR
both in the clinic
and integrated in the ambulatory surgery center,
as well as patient engagement, the MyRecovery,
patient engagement tool that Opco,
brings to bear in their technical platform.
And all of this is integrated. And then
finally, our business people, we use their practice
vitals,
which gives us real time feedback on how
the practice is doing, whether it's RVU metrics,
financial metrics, collections.
We can see all that in real time,
which helps our business team,
optimize the practice. So I think, you know,
Opco brings all that to bear
and that, you know, rather than us going
to
eight different individual companies and trying to get
all this, Opco can can do that for
us and partner with us. And they are
they also can be a source of capital.
So they've been a they've been a very,
very valuable partner, and I don't think we
could have launched this, really special group and,
without them.
Sounds like so. And do you think partnerships
like this, in any kind of, like, consolidation,
do you think it'll be necessary for
orthopedic practices
to remain independent?
Yeah. I think, you know, consolidation is an
interesting thing,
to talk about.
We're we're using,
we you know, our partnership with HOPCO
is to get practice resources,
scale, and capital,
but we don't we don't really think of
it so much as consolidation
per se because we remain an independent practice.
I think in some models, consolidation
is different,
and I think that's an important distinction.
Hopco, it provides practice management features,
but they don't they don't,
overtake and own the practice. And that's really,
that's really an important distinction. They they do
have private equity backing in them, but they
are not a private equity
run company like many others that you see
that are that are doing a traditional roll
up model
and consolidating in health care. So I think
that's what's special about them, and they remain,
physician run and led, which is really attractive
to our group. Our surgeons were really attracted
to that aspect of Opco,
which separates them, I think, from other,
PE backed institutions and also from hospitals. You
know, the consolidation you see in hospitals,
that is certainly real. And when they buy
practices and the physicians become employed,
that that's the most,
dramatic,
and stark form of consolidation.
And, you know, there's the market here in
Indiana that's been in the news recently,
for its consolidation
and its resultant very high cost of care.
And so we're trying to avoid that. We're
trying to bring the cost of care down.
But you bring up a really important point,
which is how the market is adapting to
the health care stresses,
by consolidating.
That that is true.
Absolutely. And,
what other health care trends are you following
the closest, especially in orthopedics?
Yeah. The you know, you let's talk about
the consolidation orthopedics because that's definitely,
definitely a trend. You know, here where I
am in Indiana,
there are three three large groups formed a
conglomerate called called Ortho Indiana that they recently
launched and termed.
And and so you're seeing that occur
in to get scale to to, you know,
to be able to negotiate with the payers,
try and drive down the their cost,
internally by consolidating resources. And I think that's
just the the financial pressures that are occurring.
I think we're gonna continue to see more
of that over time, to be honest with
you.
I do think the other trend that we're
gonna see and it's it's surprising to me
because I thought it would be faster.
We've been we've been doing outpatient hip and
knee replacement
for over a decade. We've published a lot
about it. We've developed protocols.
And I thought we would see more
of The United States over the last decade,
more transition out of the hospitals into the
ambulatory surgery centers. So I think that's a
trend that you're finally gonna start
seeing happen a bit faster
because of because that site of care is
lower cost. The payers are gonna push it.
The government,
continues to encourage it. And then as these
groups can,
can have ownership stake
in,
in these ambulatory surgery centers, they can have
control and help drive down the cost to
perform value based care in those facilities. So
I think we're gonna see that trend continue
to pick up depending on the state and
their CON laws, but I think you're gonna
see that pick up.
Yeah. My and my last question for you,
doctor
Managini, can you talk about, you know, when
you decide to partner with HOPCO,
know, you talked about a lot of the
green flags with them. Were you looking at
any other were you considering any other partnership
options? And if so,
why didn't those work out?
Yeah. No. That's
that that there there was definitely another,
another capital partner that was well, let's talk
about partnerships. So there was another capital partner
that I had worked with and was actually
on the executive team
in the past. And
I think the the struggle with a capital
partner when they really just provide
capital is they're not bringing any of any
of those other resources to bear that I
mentioned that help us go to the next
level
and help us build this vertically integrated,
network and also
create the value based care platform that we
need,
to to thrive in the modern health care
environment. And so if they just provide capital,
that's great, but a bank can provide capital
or, you know, you can get surgeons to
provide capital. So I think the what's unique
about Hopco is that they not only can
they provide capital, but they provide all those
other resources that help your practice thrive. And
so, yeah, we that's we did not we
declined to partner with that capital,
with that particular capital partner
because of those limitations.
I do we do have hospital partners.
So, for example,
we partner with Union Health in Terre Haute,
Indiana, and, we started that,
two years ago
when our hip and knee division, the Indiana
Joint Replacement Institute, launched in in Tarot, Indiana
2 Years ago.
And we continue to have a great partnership
with them. It's expanded.
But, again, we remain independent, and we do
we we partner with them through a PSA
and a management agreement,
and that's been very valuable. We've we have
a great relationship with their administration, and they
have employed surgeons that we work with, and
that's been a really good partnership as well.
So I think the the survival of the
independent
orthopedic practice,
we're gonna have to be creative. We're gonna
have to have hospital partnerships. We're gonna have
to have capital partner partnerships,
and we're gonna have have to have really
good resources
at our disposal to help us,
take better care of patients, and most and
many of those resources are gonna be digital.
Well, be creative. I love the way that
you word that.
And doctor Banagini,
thank you so much for all of your
time and insights today. It's been a pleasure
speaking, and I look forward to connecting again
down the line.
Great. Thank you as well. Have a great
rest of your day. Likewise.