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The Becker's team is excited to announce the

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launch of our new CFO and Revenue Cycle

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podcast.

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Tune in for conversations with finance experts from

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the top hospitals and health systems. We'll discuss

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key trends and ideas to drive meaningful change

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in the industry. Look for Becker's CFO and

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revenue cycle podcast wherever you listen to episodes.

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This is Carly Beam with the Becker Spine

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Orthopedics podcast.

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I'm thrilled to be joined today by doctor

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Michael Menaggini

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of Indiana Orthopedic

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Institute.

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Doctor Menaggini, thank you so much for being

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here today.

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Well, thank you for being on and for

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having me.

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Absolutely.

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So before we dive into some questions, could

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you introduce yourself and tell us a bit

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about your background?

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Sure. Yeah. My name is Michael Mannagini. I'm

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the CEO,

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and founder of the Indiana Orthopedic Institute. I'm

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a hip and knee replacement surgeon. Been in

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practice for twenty years. Did my residency at

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Rush

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University in Chicago and my fellowship in hip

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and knee replacement at Mayo Clinic.

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Thank you. And,

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you know, today, we're recording this on February

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14. And

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yesterday,

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Indiana Orthopedic Institute

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had cut the ribbon on its new location

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in Noblesville,

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Indiana. Can you talk about, this

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milestone

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and some of the goals you have in

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terms of growth, especially with this new location?

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Yeah. Absolutely. And thanks for the opportunity to

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talk about it. We, about two and a

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half years ago,

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we, started the Indiana Orthopedic Institute with,

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myself, my team, two nurses,

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my physician assistant,

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our director of anesthesia,

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perioperative medical physician,

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and our director of research.

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Really,

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that foundation two and a half years ago,

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if you look at who those who those

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stakeholders are in the patient care continuum, it's

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really about creating vertically integrated

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model of orthopedic care

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that's also supported by

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research,

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and education.

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And

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take bring it forward two and a half

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years,

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and we now have a statewide program,

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three,

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three markets in Indiana, Terre Haute,

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Indianapolis Metro, which is Noblesville, which is a

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a northern suburb of Indianapolis, and then another

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market in Fort Wayne.

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We have 14 surgeons,

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20 providers,

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52 employees as of today.

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And so that growth,

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has been spectacular.

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And,

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and then to to cap that off yesterday

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was the opening of our flagship facility. And

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that and that flagship facility is 40,000 square

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feet.

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It has a four room ambulatory surgery center.

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It has,

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it has a medical office building

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above it that,

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has 20 exam rooms,

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enough for, you know, up to, you know,

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five,

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physicians,

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to see patients in a day, has its

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own physical therapy,

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its own education and conference center, and its

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own biomechanical gait laboratory,

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for our research,

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on,

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knee replacements.

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And so it's really that facility

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is our flagship where we can really take

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that vertically integrated care model,

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at which the health care needs right now.

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I mean, the ambulatory surgery center is a

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lower cost of care than hospitals, and so

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non acute orthopedic procedures, which the majority are

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really,

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should be performed in an ambulatory surgery center,

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not in a hospital. So we're able to

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do that all under one roof, encapsulate that

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entire vertical integration.

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Sounds like a really

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comprehensive

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location.

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And, you know, when you think about the

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way

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things are in health care this year,

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what excites you about

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overseeing this orthopedic group, and what makes you

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nervous?

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Yeah. So that's a great question. So what

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excites us is that I think we're being

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innovative

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in how we deliver health care.

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I think we're gonna see,

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and and all the signals

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from

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this current government administration,

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from the major payers in health care,

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we're going to start seeing finally a shift

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towards value based care where

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instead of just a fee for service model,

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we're gonna start being,

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compensated,

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and even rewarded,

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for

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taking risk and delivering high quality

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care at a lower cost and a lower

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site of service. And that's what excites us

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about the model that we've built,

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and now two and a half years into

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it, being able to

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open up a facility that can that can

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accomplish

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and be very successful in value based care.

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What makes me nervous is probably what makes

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everybody nervous,

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which is being an independent

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orthopedic group,

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in an era of high labor cost and

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high inflation

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and decreasing

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overall reimbursement.

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So

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we have to be we have to run

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a practice and business and orthopedic group,

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very lean and very efficient.

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And I think the advantage we have and

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why we're excited is we just started this

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two and a half years ago.

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And so we started it in the era

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of high cost,

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of labor, high inflation.

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So we've built ourselves in our practice lean,

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and I think that's that's helpful in the

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modern era.

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And can you dive into some more strategies

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on supporting margins,

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you know, amid all these rising costs in

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health care delivery?

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Yeah. It's a challenge. And I think

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the way we we go about it in

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in multiple ways. For us to keep our

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margins reasonable,

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we have to be really judicious about what

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we do in this in this facility, in

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our other facilities, and in our programs.

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So take take something really expensive like a

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robot.

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Now, certainly, the industry is trying to bring

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the cost of robots down, but we may

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not be able to do that

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immediately,

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because it's a really high cost,

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technology,

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and we have to be very thoughtful about

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how we do things like that. The other

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thing is is,

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quite frankly, getting enough

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scale to

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to offer and cover enough patient lives where

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the payers

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will give us, you know, reward for the

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quality that we perform on our patients. So,

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like, we have nine hip and knee replacement

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surgeons. And when you have nine hip and

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knee surgeons,

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you have enough scale where you can at

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least come to the payers and say, don't,

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you know, crush us financially. We're trying to

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do a great job,

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taking care of your patient lives and your

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insured lives,

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and delivering high high quality care at a

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low cost. Now those, obviously,

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that's not a guarantee, but I think so

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far we've been reasonably successful doing that.

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And, you know, I know you guys are

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part of HOPCO. Can you talk about how

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this partnership has benefit the practice so far?

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Yeah. You know, Opco

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has been a huge asset for us, and

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you talk about how you maintain margins. Well,

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that's just the margins in the business.

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How you maintain surgeon compensation

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so that they remain employed

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or remain not employed rather,

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and that they can be in private practices

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to is to bring other revenue streams

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to the practice,

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to supplement their compensation.

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And Hopco is such a versatile company.

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They've helped us on the comp payer contracting

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side. They've got a whole value based care

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arm that our value based care team works

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in concert with, and that's another revenue stream

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for the positions going at risk.

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They have the ability to do clinically integrated

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networks with other groups

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in in the area.

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They,

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have the complete,

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digital integration

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and a tech platform that we utilize that

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we're utilizing this facility

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that helps bring down the cost

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and also streamline efficiencies because they're all on

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one under one umbrella. For example,

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most ambulatory

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ambulatory surgery centers,

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have a disparate,

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electronic health record. Some of them are still

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on paper in The United States.

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Well, what we've done in this building through

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HOPCO is we have our Ascena EMR

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both in the clinic

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and integrated in the ambulatory surgery center,

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as well as patient engagement, the MyRecovery,

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patient engagement tool that Opco,

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brings to bear in their technical platform.

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And all of this is integrated. And then

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finally, our business people, we use their practice

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vitals,

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which gives us real time feedback on how

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the practice is doing, whether it's RVU metrics,

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financial metrics, collections.

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We can see all that in real time,

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which helps our business team,

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optimize the practice. So I think, you know,

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Opco brings all that to bear

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and that, you know, rather than us going

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to

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eight different individual companies and trying to get

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all this, Opco can can do that for

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us and partner with us. And they are

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they also can be a source of capital.

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So they've been a they've been a very,

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very valuable partner, and I don't think we

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could have launched this, really special group and,

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without them.

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Sounds like so. And do you think partnerships

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like this, in any kind of, like, consolidation,

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do you think it'll be necessary for

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orthopedic practices

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to remain independent?

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Yeah. I think, you know, consolidation is an

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interesting thing,

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to talk about.

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We're we're using,

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we you know, our partnership with HOPCO

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is to get practice resources,

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scale, and capital,

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but we don't we don't really think of

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it so much as consolidation

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per se because we remain an independent practice.

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I think in some models, consolidation

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is different,

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and I think that's an important distinction.

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Hopco, it provides practice management features,

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but they don't they don't,

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overtake and own the practice. And that's really,

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that's really an important distinction. They they do

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have private equity backing in them, but they

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are not a private equity

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run company like many others that you see

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that are that are doing a traditional roll

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up model

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and consolidating in health care. So I think

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that's what's special about them, and they remain,

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physician run and led, which is really attractive

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to our group. Our surgeons were really attracted

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to that aspect of Opco,

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which separates them, I think, from other,

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PE backed institutions and also from hospitals. You

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know, the consolidation you see in hospitals,

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that is certainly real. And when they buy

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practices and the physicians become employed,

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that that's the most,

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dramatic,

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and stark form of consolidation.

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And, you know, there's the market here in

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Indiana that's been in the news recently,

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for its consolidation

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and its resultant very high cost of care.

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And so we're trying to avoid that. We're

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trying to bring the cost of care down.

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But you bring up a really important point,

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which is how the market is adapting to

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the health care stresses,

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by consolidating.

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That that is true.

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Absolutely. And,

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what other health care trends are you following

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the closest, especially in orthopedics?

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Yeah. The you know, you let's talk about

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the consolidation orthopedics because that's definitely,

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definitely a trend. You know, here where I

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am in Indiana,

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there are three three large groups formed a

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conglomerate called called Ortho Indiana that they recently

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launched and termed.

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And and so you're seeing that occur

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in to get scale to to, you know,

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to be able to negotiate with the payers,

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try and drive down the their cost,

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internally by consolidating resources. And I think that's

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just the the financial pressures that are occurring.

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I think we're gonna continue to see more

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of that over time, to be honest with

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you.

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I do think the other trend that we're

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gonna see and it's it's surprising to me

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because I thought it would be faster.

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We've been we've been doing outpatient hip and

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knee replacement

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for over a decade. We've published a lot

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about it. We've developed protocols.

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And I thought we would see more

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of The United States over the last decade,

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more transition out of the hospitals into the

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ambulatory surgery centers. So I think that's a

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trend that you're finally gonna start

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seeing happen a bit faster

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because of because that site of care is

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lower cost. The payers are gonna push it.

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The government,

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continues to encourage it. And then as these

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groups can,

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can have ownership stake

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in,

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in these ambulatory surgery centers, they can have

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control and help drive down the cost to

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perform value based care in those facilities. So

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I think we're gonna see that trend continue

359
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to pick up depending on the state and

360
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their CON laws, but I think you're gonna

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see that pick up.

362
00:12:57,809 --> 00:13:00,049
Yeah. My and my last question for you,

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doctor

364
00:13:01,169 --> 00:13:03,009
Managini, can you talk about, you know, when

365
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you decide to partner with HOPCO,

366
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know, you talked about a lot of the

367
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green flags with them. Were you looking at

368
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any other were you considering any other partnership

369
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options? And if so,

370
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why didn't those work out?

371
00:13:19,519 --> 00:13:20,500
Yeah. No. That's

372
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that that there there was definitely another,

373
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another capital partner that was well, let's talk

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about partnerships. So there was another capital partner

375
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that I had worked with and was actually

376
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on the executive team

377
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in the past. And

378
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I think the the struggle with a capital

379
00:13:37,675 --> 00:13:39,774
partner when they really just provide

380
00:13:40,394 --> 00:13:42,554
capital is they're not bringing any of any

381
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of those other resources to bear that I

382
00:13:44,475 --> 00:13:46,394
mentioned that help us go to the next

383
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level

384
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and help us build this vertically integrated,

385
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network and also

386
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create the value based care platform that we

387
00:13:54,100 --> 00:13:54,600
need,

388
00:13:55,139 --> 00:13:57,139
to to thrive in the modern health care

389
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environment. And so if they just provide capital,

390
00:13:59,779 --> 00:14:01,879
that's great, but a bank can provide capital

391
00:14:02,475 --> 00:14:04,315
or, you know, you can get surgeons to

392
00:14:04,315 --> 00:14:06,714
provide capital. So I think the what's unique

393
00:14:06,714 --> 00:14:08,235
about Hopco is that they not only can

394
00:14:08,235 --> 00:14:10,634
they provide capital, but they provide all those

395
00:14:10,634 --> 00:14:13,195
other resources that help your practice thrive. And

396
00:14:13,195 --> 00:14:15,195
so, yeah, we that's we did not we

397
00:14:15,195 --> 00:14:16,975
declined to partner with that capital,

398
00:14:17,319 --> 00:14:18,779
with that particular capital partner

399
00:14:19,159 --> 00:14:20,379
because of those limitations.

400
00:14:20,919 --> 00:14:23,259
I do we do have hospital partners.

401
00:14:23,720 --> 00:14:24,699
So, for example,

402
00:14:25,319 --> 00:14:27,319
we partner with Union Health in Terre Haute,

403
00:14:27,319 --> 00:14:29,500
Indiana, and, we started that,

404
00:14:30,120 --> 00:14:31,095
two years ago

405
00:14:32,054 --> 00:14:34,214
when our hip and knee division, the Indiana

406
00:14:34,214 --> 00:14:36,855
Joint Replacement Institute, launched in in Tarot, Indiana

407
00:14:36,855 --> 00:14:37,754
2 Years ago.

408
00:14:38,054 --> 00:14:40,054
And we continue to have a great partnership

409
00:14:40,054 --> 00:14:41,355
with them. It's expanded.

410
00:14:42,375 --> 00:14:44,454
But, again, we remain independent, and we do

411
00:14:44,534 --> 00:14:46,779
we we partner with them through a PSA

412
00:14:46,779 --> 00:14:48,000
and a management agreement,

413
00:14:48,539 --> 00:14:50,620
and that's been very valuable. We've we have

414
00:14:50,620 --> 00:14:52,940
a great relationship with their administration, and they

415
00:14:52,940 --> 00:14:55,340
have employed surgeons that we work with, and

416
00:14:55,340 --> 00:14:57,840
that's been a really good partnership as well.

417
00:14:57,914 --> 00:15:00,315
So I think the the survival of the

418
00:15:00,315 --> 00:15:00,815
independent

419
00:15:01,274 --> 00:15:02,334
orthopedic practice,

420
00:15:02,714 --> 00:15:04,154
we're gonna have to be creative. We're gonna

421
00:15:04,154 --> 00:15:06,074
have to have hospital partnerships. We're gonna have

422
00:15:06,074 --> 00:15:07,934
to have capital partner partnerships,

423
00:15:08,315 --> 00:15:09,834
and we're gonna have have to have really

424
00:15:09,834 --> 00:15:10,574
good resources

425
00:15:11,274 --> 00:15:13,034
at our disposal to help us,

426
00:15:13,639 --> 00:15:15,559
take better care of patients, and most and

427
00:15:15,559 --> 00:15:17,580
many of those resources are gonna be digital.

428
00:15:18,679 --> 00:15:20,840
Well, be creative. I love the way that

429
00:15:20,840 --> 00:15:21,980
you word that.

430
00:15:22,440 --> 00:15:23,820
And doctor Banagini,

431
00:15:24,279 --> 00:15:26,539
thank you so much for all of your

432
00:15:26,804 --> 00:15:29,524
time and insights today. It's been a pleasure

433
00:15:29,524 --> 00:15:31,924
speaking, and I look forward to connecting again

434
00:15:31,924 --> 00:15:32,664
down the line.

435
00:15:33,524 --> 00:15:35,044
Great. Thank you as well. Have a great

436
00:15:35,044 --> 00:15:36,585
rest of your day. Likewise.