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John Ryan leads Indiana’s largest orthopedic medical group, OrthoIndy, with more than 100 physicians and 1,200 employees at 22 locations across central Indiana. As CEO, he oversees the business side of a for-profit operation that includes an orthopedic hospital on the northwest side.
Around Indiana, independent medical groups are a vanishing breed, often gobbled up by hospital systems and private equity groups. Ryan, a health care attorney by training, vows to keep his practice independent and in control of its destiny. But the economics are daunting: Rising costs and flat reimbursements mean private groups must work harder to stay independent.
The challenge is huge, but so are the opportunities. Last month, OrthoIndy announced it would combine practices with Indiana Hand to Shoulder Center, a smaller orthopedic group. The merger probably won’t be the last such announcement from OrthoIndy.
You’ve been outspoken on the need for medical practices to remain independent in the face of consolidation sweeping the industry. Why is this such a priority for you?
That’s in large part because I think the alternative is that health care becomes way too consolidated and way too corporate. The bottom line is that physicians are the most important ingredient in the delivery of care. There are a lot of other important ingredients, but so much of the delivery of health care centers around and through the physician. We need our physician population in the state of Indiana to be very vibrant and self-sustainable.
Do you think it’s possible in the long term for independent physicians to survive as a group? The numbers are going down by the year.
I think it is. The headwinds are stacked up against the physician, because right now and over the past number of years the regulatory environment in which [physicians] operate is increasingly complex and therefore more expensive to manage, and reimbursement and expense pressure are both working against the physician. Reimbursement is flat and coming down, and expenses are going up, and so the environment with which it’s possible is harder and harder every day.
I don’t blame for a second the physicians that have chosen a different pathway, because it’s just become too complicated. Yet I still think that it’s vital that we create an environment where physicians can be independent, and that’s going to take some assistance from government and the provider community in order to be able to pull that off, both at a state level and also at a national level.
Before joining OrthoIndy in 2021, you were longtime head of Hall Render, a law firm that specializes in health care law. What kind of perspective do you bring to a large medical practice?
I found that there were many parallels in providing leadership for a law firm of attorneys and medical practice with physicians. Obviously, both are professional services. And so that was one parallel that I drew upon and in thinking about my next professional move.
The other thing that was important to me is that I had had a perspective over the 25 years that I had been at Hall Render representing hospitals, health systems, physician practices on not just the challenges that are facing health care within the Indiana community but also in communities across the country.
How competitive is the field of orthopedics these days?
It’s really competitive. Now, I would tell you that our competitors have changed over the years. If you look over the history of OrthoIndy years ago, the competitive landscape for orthopedics was physician practice to physician practice. But as the number of independent orthopedic physician practices has come down in the state, a lot of those orthopedic surgeons are now employed at or through a hospital or a health system.
The competition has evolved to be more one with the hospitals and the health systems and less with the physician practices. And so that’s been a big adjustment for us, but it remains very competitive, in large part because if you look at the health care spend of most health plans through employers in the state of Indiana, orthopedics is going to be either the second or third most expensive service line that health plan will encounter, just in terms of the volume of work that flows through the health plan.
OrthoIndy is a for-profit medical group, running a hospital and numerous clinics. Is profit a bad word in the world of health care?
I think the key with respect to any health care organization is whether they put profits over patient or patients over profit.
If you come from a perspective of, “We’re going to treat patients really, really well and we’re going to do it cost-effectively,” then great. But if your starting point is, “How are we going to maximize the bottom line?” that is going to be a losing proposition for the organization, and it’s also going to be a losing proposition for the communities that we serve.
What is the most pressing challenge on your desk these days?
I probably would start from a position of the economic viability of health care, both for OrthoIndy and for the other health care providers, whether it be hospitals, health systems or other physician practices as it exists today. Revenues are under pressure, and that means that reimbursement is under pressure.
We’ve not had an adjustment to our Medicaid reimbursement in the state of Indiana in 30 years. And it doesn’t take an economist to know that if your prices on reimbursement for Medicaid, as an example, have not gone up in 30 years, the expense certainly has.
And so we live in an environment where revenue is under pressure, and expense goes up every year. And so, at some point, I have to stand up in front of our physician group and say, the only way you can make the same economic livelihood this year as last year is, you have to work harder. You have to do more because that’s the only lever left to pull.
Now we have the advantage of having the hospital, which means we also provide physical therapy services, and we also do advanced imaging. And so we’ve tried to piece together all the different ingredients in the continuum of orthopedic care so that we have more control over our destiny in terms of the total cost of that episode of orthopedic care that, frankly, I think, gives us some extra opportunity to sustain our likelihood.
The Indiana General Assembly has been passing health care laws in the last few years on everything from noncompete clauses to mergers and acquisitions. What’s your confidence in political leaders in Indiana getting it right?
At the risk of using a medical term, I think I would just share a cautionary word about being too surgical when it comes to fixing health care in the state of Indiana. I say that because the entire system needs to evolve in a better way. But it is not a linear or a single decision at the General Assembly that’s going to fix that. It’s a dynamic problem, and it requires a dynamic solution.
And that is to say that we can’t just focus on hospitals as being expensive, as a thing that needs to be fixed in Indiana. And so when you have a dynamic problem like that, it requires a dynamic solution. You may solve a problem one day, but you’re just pushing on the balloon. And it’s just causing a problem somewhere else.•
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