Private Practice 101: The Business of Orthopaedics

Visual Element: A "Revenue Funnel" graphic showing Patient Referral -> Consult -> Surgery -> Billing -> Collection -> Overhead -> Net Income.

You have spent 15 years learning how to fix a bone. You have likely spent 0 hours learning how to run a business. Yet, the moment you finish fellowship and hang your shingle, you are the CEO of a small to medium enterprise.

Many excellent surgeons fail in private practice not because of clinical incompetence, but because of business ignorance. They get burnt out by overhead, frustrated by insurance denials, or taken advantage of by bad contracts.

This guide covers the "Hidden Curriculum" of private practice.

Part 1: The Revenue Cycle

It is not as simple as "Do surgery -> Get paid." The cycle has friction at every step.

1. Coding (The Language of Money)

You must learn CPT (Current Procedural Terminology) codes.

• The Trap: "Under-coding" because you are nice or afraid of audits. If you performed a complex revision, do not code a primary. You devalue your time and the profession.
• The Modifiers: Learn when to use modifier -22 (Increased procedural services) or -59 (Distinct procedural service). This can increase reimbursement by 20-30% for difficult cases.

2. Billing & Submission

You need a biller who is a pitbull. Insurance companies are designed to deny claims.

• The "Clean Claim": Your op note must match the code. If you code for a "reconstruction of ligament," the word "reconstruction" better be in the note.

3. Collections

"Accounts Receivable" (AR) is money you are owed but don't have. Keep your AR days < 45. If it goes > 90 days, you will likely never see it.

Part 2: Overhead Management

Profit = Revenue - Overhead. You can increase profit by working harder (Revenue) or being smarter (Overhead).

• Target: 40-50% overhead ratio.
• Staff: Your most expensive and valuable asset. One amazing practice manager is worth three mediocre ones. Pay them well.
• Rent: Don't overbuild your first office. You don't need marble floors. You need a clean, efficient space.

Part 3: Marketing and The "Referral Funnel"

How do you get patients?

1. The 3 A's:
   • Availability: Pick up the phone. See the consult today.
   • Affability: Be nice to the ED staff, the nurses, and the patients.
   • Ability: Be a good surgeon. (Note: this is last. Patients assume you are able. They return because you are affable).
2. The GP Visit: Go meet the local GPs. Don't bring a brochure; bring a case. Ask them what they hate seeing (e.g., Back pain) and offer to help manage it.
3. Digital Presence: You need a website. It doesn't need to be fancy, but it needs to be findable ("Orthopaedic Surgeon [City]"). 80% of patients Google you before the appointment.

Part 4: The Setup

Solo vs. Group Practice

• Solo: Total control. Total risk. Lonely. Hard to take leave.
• Group: Shared overhead. Shared call. Internal referrals. Loss of autonomy.
• Hospital Employed: No business stress. Guaranteed salary. No autonomy. You work for "The Man."

IT Systems

• EMR: Choose one that is cloud-based and mobile-friendly. If you can't dictate a note from your phone, it's obsolete.
• Telehealth: Essential post-2020.

Part 5: Financial Health

• Disability Insurance: Get "Own Occupation" insurance immediately. Your hands are your asset.
• Malpractice: Don't cheap out.
• Diversification: Don't put all your money back into the practice. Invest outside of medicine (Stocks, Real Estate).

Conclusion

Treat your practice like a patient. Monitor its vitals (Revenue, AR, Overhead). Diagnose problems early. And remember, a solvent, profitable practice allows you to provide better care to your patients (and do pro bono work if you choose) without the stress of impending bankruptcy.

Practice Startup Checklist

A 6-month timeline checklist for opening your doors. Licensing, credentialing, hiring, and fit-out.