by Deborah Conn

Last month, the O&P Almanac ran an article where AOPA President Brad Ruhl challenged those in O&P to actively look for new ways to expand their business. This month, the O&P Almanac brings you stories of people who’ve done just that. They’ve deviated from the traditional O&P business model of a stand-alone, referral-based operation and redefined what they do. In the process, they’ve found ways to better serve their patients and increase their own earnings.

What these people have done may not exactly fit your situation. But their changes have worked for them. So maybe it’s time to challenge yourself and ask: Why not?

Expanding past O&P
Rehabilitative therapies offer a natural extension of O&P practices. Colorado Professional Medical Inc., based in Golden, Colo., is one of a number of facilities that provide continuous passive motion, or CPM, devices.

Owner Lora Quirk was trained as an orthotist, but began her company in 1992 with CPM as her primary market. Today, O&P makes up about 75 percent of her business, but she continues to value the CPM side.

“The biggest bonus is that after you have paid off the equipment, you have zero cost for goods,” says Quirk. “You can train orthotic fitters to place CPM devices on patients, so [that] doesn’t take up a practitioner’s time. And it provides an excellent reason to follow up with physicians and develop deeper relationships with them. Orthopedic surgeons are among the biggest customers for CPM and O&P, so it’s a similar referral base.”

Joe Sansone, owner of TMC Orthopedic and the Amputee & Prosthetic Center in Houston, has offered CPM therapy for years, as well as a host of other products and services.

“My model early on was to capture as much business as I could,” he says. “For example, for an ACL procedure, we could provide the surgical instruments, the tissue, the implantable device, a pain pump, CPM, cryotherapy, a post-op knee brace, and a functional knee brace. We were a one-stop shop for all of the orthopedic surgeon’s needs.”

Eventually, though, Sansone found that the O&P side of the business was becoming far more profitable, and he cut back drastically on surgical products. “During the transition, we’ve cut sales in half but tripled our profits,” he says.

Sansone continues to offer CPM and cryotherapy as well as allograft tissue. “I can break my rule about selling operating room products with allograft tissue,” says Sansone, “because tissue is normally a high-ticket item, and generally surgeons don’t require the sales representatives to be on hand throughout the surgical procedure.”

Sansone is a strong proponent of “stock and bill” programs, also known as consignment closets. Physicians store his off-the-shelf devices in their office, and when a patient needs a brace, the physician dispenses it and TMC bills the insurer. Although this arrangement is controversial (some point to the OIG fraud alerts stating concerns that kickbacks may be disguised as rental payments), Sansone believes that consignment closets are worthwhile as long as you work with a knowledgeable healthcare attorney when setting up such arrangements and no remuneration of any sort is given to the practice.

“I have just under 100 programs like this in Houston,” he says. “Patients benefit because they are not forced to leave the physician’s office only to wait to be seen at an O&P facility, and the facility benefits because a lot of its work is being done by the physician, and their practitioners are freed up to fit true custom bracing—not arm slings and wrist splints.”

Sansone believes that offering additional services gives a facility a strong competitive advantage. “Any time a facility provides only bracing and it’s competing with a company that also provides stock and bill services, CPM, and cryotherapy, it’s going to be difficult to compete,” he says. Nevertheless, he cautions that “any business is not necessarily good business. Cryotherapy and CPM can be money losers if not handled correctly and [if] services are not covered by insurance.”
 
Refining the focus
While expanding their products and services works for some facilities, others choose to focus in on a particular aspect of O&P.

For Scott Sabolich, CP, LP, owner and clinical director of Sabolich Prosthetics and Research in Oklahoma City, that focus is on technology. “We were the first facility to start using C-Legs, and among the first to use the i-Limb Hand and Rheo Knees,” he says. “If a technology can be used to help a patient, why wouldn’t we use it?”

The answer, of course, is reimbursement. “It’s very unfortunate that new technology costs so much. It’s hard for payers to see past the dollar signs,” he notes.

But Sabolich is a relentless patient advocate with insurance companies. “If I can prove a device is medically necessary, we will get coverage. It’s not the insurance company’s decision. It’s the doctor’s and ours. Most practices have standards and guidelines they use. I tell my people not to take ‘no’ for an answer.” As a result, he says, his practice is generally successful in getting reimbursed for high-tech items.

Another area of Sabolich’s business is research. A company spin-off, Martin Bionics, works closely with Scott Sabolich Prosthetics and Research to develop innovative products. “We’ve come up with a new style [of] hip socket design, prosthetic accessories, and we’ve worked with different types of above-the-knee socket designs,” says Sabolich.

Sabolich’s commitment to technology doesn’t stop with his patients. The office uses electronic OPIE patient management modules that he customized himself for his practice of 10 prosthetists and 35 total employees. “We’re getting behind as an industry,” he says. “We have to work smarter, more efficiently. Office technology has brought our profitability back to where it was in the ‘90s, and as products get more expensive, we have to do more.

“I’ve always followed my dad’s business model, which he took from Oklahoma University and Dallas Cowboys coach Barry Switzer: if you surround yourself with the best players, give them the best tools, and treat them like champions, they’re going to go out and win.”

Getting the upper hand
For Advanced Arm Dynamics Inc., based in Redondo Beach, Calif., specialization is key. The company provides only upper-limb prosthetics, which gives it a significant competitive advantage.

“We believe that the average practitioner sees one to three upper-extremity patients in a year,” says John Miguelez, CP, FAAOP, president and senior clinical director. “Under those circumstances, it’s hard for a practitioner to be proficient. If [patients] can see a team that only does upper-extremity prosthetics, [they] will have access to the most current technology and techniques.”

As a result, Advanced Arm Dynamics’ client base is national. Their facilities offer expedited fittings, where practitioners work with one patient from start to finish without interruption. The initial fitting requires one to three days and patients usually receive their definitive prostheses in seven to 10 days.

Miguelez notes the benefits of specialization for practitioners. “Specialization allows all of us to constantly work on educational standards and state-of-the-art techniques and technology. This year, we’ve flown teams to Vienna, to Scotland, and throughout the United States for training. That kind of professional development is key to retaining top clinicians, which of course translates into improved patient care.

“We start looking at things like functional outcomes and what kind of components really result in improved function,” he explains. “Technology is changing so rapidly, and we have to be involved. Our comprehensive knowledge and experience helps to guide our patients as to what’s most appropriate.”

But the company also uses an expansion strategy, just like the companies mentioned earlier. While Advanced Arm Dynamics focuses on upper limb prosthetics, its services are comprehensive. It offers patients a full range of services, from initial patient education and rehabilitation planning through prosthetic fitting and occupational therapy. Other services include initial psychological counseling, rehabilitation planning, insurance assistance and even expert witness testimony.

Being both a specialized and a comprehensive service has paid off. The company’s consulting teams travel worldwide to assist physicians or other prosthetists, and Advanced Arm Dynamics is a sole source provider at Walter Reed Army Medical Center and San Diego Naval Medical Center.

Selling the business
Sometimes a different business model involves giving up your business, or at least the ownership of it. Chris P. Boosalis, CP, started Minnesota Prosthetics and Orthotics in Burnsville, Minn., with partner Brian Gustin, CP, in 2003. They knew that a group of orthopedic surgeons were familiar with their services, and hoped for Boosalis and Gustin to be nearby. With that group of referrers as a base, Minnesota P&O thrived.

A few years later, however, the physicians were considering hiring their own pedorthist and an orthotist for knee braces. “That would have been a hardship for us,” says Boosalis. “So we began working out of their clinic in Edina, Minn., and as we earned their trust and respect, we received referrals for other services.”

The physicians in Edina were part of a larger entity, Twin Cities Orthopedics, comprising five autonomous groups of surgeons who shared administrative and human resource services. Ultimately, Twin Cities Orthopedics invited Minnesota P&O to join the company. Coincidentally, Gustin was selling his practice in Wisconsin to Benchmark Medical. (Gustin has subsequently moved on to become the chief clinical officer at BridgePoint Medical, based in Lexington, Ky.)

“It just seemed as though there was a new wave of consolidation beginning in O&P and we had to make a decision to embrace a new model of O&P management,” said Boosalis.

“At first, it was a hard call,” he says. “I thought I’d be an entrepreneur, managing the way I wanted. But four other orthotic groups in town were owned by hospitals or doctors, and it seemed to be a wave of thinking in this area. When I knew our doctors were moving in that direction, I realized I could be on the inside looking out or on the outside looking in. For us to have any staying power—to continue doing what we liked to do, taking care of patients—this was the way to go. I have been allowed to continue to manage this business for TCO like it was still an independent business.”

Today, Boosalis is content with his choice. “The only downside is that it’s not truly my business,” he says. But Minnesota P&O has flourished as a part of Twin Cities Orthopedics.

“When we merged with them, we were taking care of one group,” explains Boosalis. “Now, 18 months into it, many surgeons in the other groups are using us as well. We have one part-time and three full-time clinics, four orthotists, and may be adding another prosthetist soon.”

Keeping the DME in O&P
Finally, while there are often strong opinions about the subject, many consider durable medical equipment (DME) to be a beneficial, logical extension of O&P services.

“Frankly, I think the O&P industry missed the boat early on by not offering durable medical equipment,” says Richard Clark, CPO, owner of Clark’s Orthopedic and Medical, in Great Falls, Mont. Clark’s father began the family O&P business in 1957, and Richard Clark became the owner in 1975.

“We began offering DME soon after I took over,” he says. “It was the end of the Vietnam War, and people were coming home. I think the disabled population in general was not willing to be in the closet anymore. They wanted access and mobility. In my area, no one was providing such things as lifts in the home or vehicle conversions.

“DME was just an extension of our P&O services. The people we were serving needed wheelchairs, hospital beds, bathroom safety equipment, all those things associated with dealing with a disability. We met a very clear need in the community.”

Clark says that today DME forms the largest percentage of his business. ”People are getting older and less mobile. They have problems with stairs and bathrooms even if they don’t necessarily have O&P needs,” he explains.

“I encourage people to look at this if they’re already in O&P,” he says. “It’s all part of providing mobility to the people we work with. The same people who need diabetic footwear or a knee orthosis also need appropriate equipment in the bathroom so they can take care of themselves.”

Take care of your patients
However different the ideas, they all have one thing in common. Each business owner looked to provide what services patients and referral sources needed, whether or not those services fell within the traditional bounds of O&P.

So take care of your patients, and you’ll take care of your business. It’s what O&P has always done. This time around, it just means thinking a little differently.

Deborah Conn is a freelance writer based in Falls Church, Virginia.