In an enlightening episode of the Wealth Planning for the Modern Physician podcast, host David Mandell delves into the realm of private equity in independent medicine. Joined by guests Dr. Steve Hamilton, a sports medicine physician and orthopedic surgeon at Beacon Orthopedics, and Andy Blankemeyer, CEO of Beacon and OrthoAlliance, the conversation examines the nuances of practice expansion and collaboration with private equity.
**Establishing a regional orthopedic leader**
Beacon Orthopedics experienced significant growth prior to its acquisition by private equity, transforming from a modest practice into a regional giant with 70 physicians and 26 locations. The drive behind this expansion was to overcome competitive challenges and solidify a robust regional presence, accomplished through infrastructure development and strategic hiring.
**Choosing private equity**
Initially cautious, Hamilton and Blankemeyer discovered that not every private equity firm sacrifices clinical autonomy for profit. By selecting a culturally compatible partner, Revelstoke Capital Partners, they obtained financial backing without undermining patient care standards.
**The physician’s viewpoint**
Dr. Hamilton portrays the transition as both demanding and fulfilling. Although there was a steep learning curve in business knowledge, the partnership has not disrupted everyday clinical practices. The emphasis has continued to be on preserving patient care autonomy amidst swift organizational expansion.
**Challenges and prospects post-deal**
As Beacon grew from 500 to 1,000 employees, it prioritized the retention of its culture during scaling. The pandemic challenged the resilience of the partnership, with Revelstoke backing physician-led decisions even amidst operational halts.
**Essential lessons for physicians**
The episode presents numerous insights for physicians contemplating private equity:
– **Educate yourself**: Gain financial knowledge and seek outside counsel.
– **Investigate options**: Avoid hurrying into the first proposal; verify cultural compatibility.
– **Safeguard autonomy**: Ensure clinical independence is protected in agreements.
– **Emphasize culture**: Lasting success relies on cultural alignment, not solely on financials.
– **Remain flexible**: Growth demands adaptability in operations and partnerships.
**Conclusion**
The experiences of Beacon Orthopedics highlight both the potential and challenges of private equity in healthcare, emphasizing the significance of selecting the right partner to promote growth without compromising clinical integrity.