How A 44-Physician Practice Stays Independent In A Hospital-Dominated Market

Want a real look at how independent orthopaedic groups thrive while hospitals buy up urgent cares, primary care, and the referral rails? Dr. Doug Lundy, AOA host, sits down with Dr. Kimmerly, president at Peachtree Orthopedics in Atlanta, to unpack how a 44-physician practice stays nimble, patient-centered, and profitable in a market dominated by large systems and complex EHR ecosystems. The story isn’t about being the biggest—it’s about building a vertically integrated experience that moves patients from access to outcome with speed and clarity.

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Transcript

Setting The Stage: Atlanta Orthopedics

SPEAKER_01 0:23

Welcome to the AOA Future in Orthopedic Surgery Podcast Series. This AOA podcast series will focus on the future in orthopedic surgery and the impact on leaders in our profession. These podcasts will focus on the vast spectrum of change that will occur as the future reveals itself. We will consider changes as they occur in the domains of culture, employment, technology, scope of practice, compensation, and other areas. My name is Doug Lundy, host for this podcast series. Joining us today is Dr. Scott Kimmerly.

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Dr.

SPEAKER_01 1:00

Kimmerly is president of Peachtree Orthopedics in Atlanta, Georgia, specializing in sports medicine. He's been with Peachtree Orthopedics since 2009 after serving as an assistant professor of orthopedic surgery and assistant residency program director at Emory University, also in Atlanta. He did medical school at the University of Tennessee, residency at Emory University in Atlanta, and his fellowship in sports medicine at the STEM and Hawkins Clinic in Bale, Colorado. His clinical interests include arthroscopic surgery of the shoulder and knee, as well as general orthopedics and trauma. Dr. Kimberly is board certified in orthopedic surgery and holds a subspecialty certificate in sports medicine from the American Board of Orthopedic Surgery. So, Scott, my friend, welcome to the podcast, sir.

SPEAKER_00 1:50

Hey Doug, thanks for having me on. This is an honor.

Rebranding And Modernizing The Practice

SPEAKER_01 1:54

As y'all know, we've been going through the future in orthopedic surgery, and we did the mega group. We did the very, very, very large group with Rothman specifically, and then we did the very, very, very small group with my friend Jim Barber, who is in solo practice in South Georgia. And as many people know, I was co-president of Resurgents Orthopedics, which was down the street from Scott. And Scott's group and our group were two of the largest practices, clearly, in the city of Atlanta. And so I got to know Scott well over there. So, Scott, when I was growing up in Atlanta, y'all are known as the Peachtree Orthopedic Clinic. And then y'all dropped the clinic. What's up with that?

SPEAKER_00 2:39

So we're always trying to evolve and stay with the times, Doug. And we we brought in a marketing consultant to take a look at uh to take a look at our brand. And we were Peachtree Orthopedics, uh Pea Tree Orthopedic Clinic spelled with the traditional A in the orthopedics. And his findings were the following. So we actually had a logo drawn, I believe it was Dr. Funk's mother, may have drawn the original logo. And we had a font for Peachtree Orthopedic Clinic that had been around since the 50s. And so this marketing consultant's findings were the following. One, I can't do anything digital with your font or your logo, it's never going to show up on any type of digital advertising. You've got to change that immediately. Two, nobody googles orthopedics with an A. And three, when you say Peachtree Orthopedic Clinic, people don't like going to clinics. They think they're going to get a shot. So we got a new logo and we became Peachtree Orthopedics.

SPEAKER_01 3:55

And I was confiding in Scott now that it's four years since I've left the ATL, that when I was co-president of the group and we would do our strategy meetings, Peachtree was the problem to which resurgence didn't have an answer in terms of a competitive base, because they were full of high-quality, carefully selected orthopedic surgeons who had high patient satisfaction, did an amazing job. And we had our strategy with Peachtree was to work with and around Peachtree because they were quite a well-functioning group there. And so we're going to talk with Scott about the size of this group and all that. So we're defining Peachtree as a medium-sized group in the city of Atlanta. It is in a big city like that, it would be. There are other cities where this would be a large group. So, Scott, tell us about Peachtree. Tell us about what y'all got going there.

SPEAKER_00 4:52

Yeah, Doug, you know, it's interesting you say that about Peachtree and Resurgence. Yeah, we're we're currently at 44 docks, which I think when you were president of Resurgence, you guys were north of 100, correct?

SPEAKER_01 5:05

Yeah, that's right.

Defining A Medium-Sized Group

SPEAKER_00 5:06

Yeah. And so when you were president, we probably had about 35 because we've been on a bit of a hiring spree. And it's interesting you say that because we always didn't we didn't have a great solution for resurgence either. I would say it was for the most part peaceful coexistence. And I think that for the market, and you know, 10 years ago, the having resurgence there as such a large force kept everybody in their own lane, including the hospital systems and the payers, and kept the Atlanta market from consolidating because resurgent was was so big. And that kind of created an umbrella for all of the smaller practices. And I say smaller, there's some other medium-sized groups. But I would say there was resurgence, and then we were probably at the time the second biggest group. I don't know where you would place Emery in that conversation. Now things have changed dramatically, but now we're up to 44. We've got 11 offices around Metro, which means about five different counties with three ASCs and 11 different PT offices and four scanners. So that's so that would define a medium-sized group in a six million metro area, 44 docs, probably 80 providers all together. If you add the APPs, very, very well said.

SPEAKER_01 6:33

I appreciate it so Lana's got about six million folks in the metro area in the MSA. You said three ASCs? Three, yeah. Between all those ASCs? 10. Okay, that's good. And then you said, I'm sorry, you said four magnets?

SPEAKER_00 6:49

We have four magnets and 11 PT offices. We try to put, we try to, the new model for us is if we open an office, PT comes along with it. Seems they seem to go hand in hand. Very good. And if I recall, y'all do Delta Airlines comp. We do a lot. So what we do a fair amount of work comp. That's part of our business model that pre-existed me. Georgia can be a good work comp estate, good business and work comp. And some of the docs that to help build our practice, we've been around for almost 75 years, developed a great relationship with Delta many, many years ago. And so those relationships have persisted. So we do the vast majority of their workers' comp care. That includes all their employees, but their flight attendants, their tech ops, which is their mechanics, which is a big group, as you probably know. His son works in tech ops at Delta in Atlanta. The love the tech op guys, those guys are great patients. They're the model work comp patients because they build and work on cool stuff and they want to go back to work. Oh, yeah.

SPEAKER_01 7:54

Son is always sending me pictures from the flight line of the cool stuff he's doing. He loves that. Yeah, those guys are fun. So y'all have been around a long time, you said 75 years. And if I recall, Dr. Funk, one of your founders, wasn't he, president of the academy at one point?

SPEAKER_00 8:08

We've had a few presidents of the academy. Dr. Funk was as well as Bob Wells. So our three founding physicians were Scoot Diamond, Bob Wells, and Jim Funk. So those guys started the practice in 1953.

Vertically Integrated Care Model

SPEAKER_01 8:22

So my point is that Peachtree is a very established, strong, medium-sized group, and you are running that group. And what we're trying to figure out is what is the future for a group such as yours in the United States in the upcoming years? Because I would argue that as spectacular as I as much respect as I have for Peachtree, y'all are duplicated across the entire country in different demographics, and there are other groups like yours out there. So as you look forward over in your strategic planning for Peachtree and over the next as far out as you're willing to go, 10 plus years, what are the challenges that you see? Where do you think that the medium-sized orthopedic practice is going to flourish? What are y'all going to struggle with? How do you see changes coming up? What are the threats, the consolidation of you joining somebody else or private equity or whatever? What do you think?

SPEAKER_00 9:21

Wow, I can talk about all those things. I can talk about private equity. We had a little dalliance in that. I love the pedigree and the stature of our group, and I appreciate the kudos that you've given us. And I'm I think all of us here, all the docs here take a lot of pride in the heritage. And I do think that was important in the I don't know, 90s, early 2000s. And I think it mattered to probably the first million people that lived in Atlanta. But the next five million people that have come to Atlanta since then, I don't think they really necessarily know or care. I think that orthopedics and medicine in general is changing. And there's multiple factors involved. But the average person who wakes up with shoulder pain doesn't care that our founders were presidents of the academy. They don't care that we take care of the braves. And it's just a different day and age. And we're just working to try and stay current, not rest on our laurels and evolve with the rest of the healthcare.

SPEAKER_01 10:53

What kind of stuff out there are you keeping your eyes on in terms of threats to your model?

Hospital Systems And Patient Control

SPEAKER_00 11:01

Yeah, there's many, and I'm sure you're probably aware of a lot. So hospitals have decided to get into the game of orthopedics in a big way.

SPEAKER_01 11:13

And there's four big systems in Atlanta, right?

SPEAKER_00 11:15

That's correct. There's the Wellstar system, the Emory system, the Northside system, and the Piedmont system. And all of them are in the business of employing orthopedists, as we all know from Academy and other statistics, that for the younger generation that's coming out, there's a higher percentage of orthopedic surgeons that are going into the employment model than when you and I came out. The hospitals offer great contracts. The hospitals have done a great job. They've built up robust patient bases. One of my mentors and one of our past presidents is a physician named Javier Duralde, who I'm sure you know. And Javier used to have this saying that he who controls the patient controls their own fate. And he's right, but it is becoming harder and harder to control the patient that we are finding. I think a lot of that has to do with the fact that the hospital systems have their physicians that are within their network or on their staff. The hospital systems have systems themselves, whether that's in it mostly in the form of EHR, that's it becomes a referral platform that's hard to compete with if you're not on the same platform. The hospital systems are buying urgent cares. They're probably 150 urgent cares in the Metro Atlanta, and they're most of them are owned by hospital systems. So you can see where controlling the patient flow is becoming tougher and tougher. Add to that robust marketing budget. I sometimes will tell friends of mine that are not in orthopedics or that are not in medicine, they ask me what I do besides be a physician, and I explained to them that I'm a managing partner of this practice, and we talk about some of the challenges. Our company is really no different than the mom and pop hardware store. We have to account for every paperclip. Everything matters to the bottom line. And one of those things is marketing. And so we can't always market as robustly as some of our competitors, and certainly not the hospital systems. This is not sour grapes. This is not meant to be an antagonistic. It's just the healthcare landscape is changing. So we're just trying to change with it as best we can.

SPEAKER_01 13:50

So how sustainable is your model? Uh next 10, 15 years, do you you tell your new doctors, hey, we're still going to be here, we're plugging along, or you a little bearish and thinking that consolidation or something else may be on the horizon?

Marketing, Referrals, And EHR Friction

SPEAKER_00 14:06

I feel no, I'm bullish on our model. I'm bullish on our model, but it's taken a lot to get to that point. And so it's taken a lot of homework. And we are have we are learning, or we have learned, that we have to take some of the profits in our practice, and we need to reinvest. We need to reinvest in ourselves. And the biggest thing that we're reinvesting in is talent. And we're working, we've we've spent a lot of time developing our management team, and they are addressing these things head-on. And they're looking at it not only things like marketing, but they're looking at things that create efficiencies for us. They're looking at uh automation, they're looking into revenue cycle management strategies, anything that we can do that we can improve our efficiency and help us continue to take great care of patients, but also generate enough revenue for us to be sustainable. And I think the biggest advantage that we have is probably this. We have basically a vertically integrated network that the patients can get efficient orthopedic care, and I think that's the advantage that we have over hospitals. Okay. And so we so we have urgent cares, orthopedic urgent cares, we pride ourselves on access for the patients, and that's one thing that I think gives us a little bit of a competitive advantage. It's a it's very streamlined for patients to get into see us. Then when they get into see us, we have if they need imaging, we have that for them. If they need therapy, we have that for them. If they need surgery, God forbid, we have that for them. And it's all done in a very streamlined and efficient way that we find that when we when the patients do get in the door, they tend not to leave because we've got all the services for them. Now, not to say there's not going to be a role for hospitals. Obviously, we have patients that need hospital care, we need we have patients that are sicker, we have cases that are more complicated. And so as a result, we're finding ways to work with our hospital partners in a collaborative way, but you know, we also need to find ways that you know keep us independent because that is the goal.

SPEAKER_01 16:51

Very good. Now, what do you feel are the threats in the future of consolidation? Do you think that there's any benefit in that for y'all, or do you think you're just gonna pretty much stay steady course and it would take something seismic to make you think of that?

SPEAKER_00 17:08

Yeah, I at least here, I'm not sure that consolidation is the best option, at least for us at this point. And I would say this it may be completely different in Alabama or Tennessee or Chicago or in the on the West Coast. I think it's market dependent. But it's been my experience that we used to think that the size of the group mattered to the payers. I'm not sure that's the case anymore. Uh I think the payers, at least in this market, are really paying more attention to the hospital systems. So while we still had the ability to negotiate, we still have good rates. The value add of consolidation was leverage, quote unquote leverage with payers. I'm not sure that exists anymore. Uh or at least it doesn't in this market. And so I don't think that's gonna be our strategy, at least in terms of mergers and things like that. We did take a look at private equity a few years ago and found that wasn't for us, that consolidating different groups in different markets ultimately did not help us locally.

SPEAKER_01 18:35

Was it a uh multiple issue, or was it that y'all had the sophistication to look downstream and say, yeah, it's a it's a short win, but not a long win?

Sustainability And Reinvestment Strategy

SPEAKER_00 18:47

Yeah, it was not a multiple issue. It were it really wasn't that we genuinely found that you see let's say you get develop a platform with a couple of groups from the northeast, a couple of groups from the Midwest, some groups from the Southeast, and some groups from the West. That's great. And there's power in that, there's power in terms of operations, economies of scale, data sharing, benchmarking, but ultimately the payers in each individual market don't really care how big you are nationwide because we found that rates and payers that's all local nuance. And so we did not see that there was going to be any local benefit to us. And at the same time, we were a little concerned that it might be off-putting to our hospital partners, the people that we do have collaborative relationships with. And so ultimately we found it didn't do a whole lot for us locally, so we passed.

SPEAKER_01 20:02

Okay. Now, when I was at Resurgeons, we had 103 orthopedic surgeons when I was co-president there. We had an entire HR department, we had many accountants, we had an attorney that was fully she worked for resurgence. That was her job. Contrast that with my friend in solo practice, where his office administrator is wearing many, many hats trying to accomplish the different tasks that have to go on. And y'all are kind of in that sweet spot in the middle where you've got a certain degree of specialization of your staff, but there's other stuff you got to outsource. Talk to us about the growing pains of the group from 20 to 40, and then now y'all are in the upper 40s, close to 50. If y'all were going to expand to a much larger degree, how would your infrastructure, your staffing, what would be the pressures within the group doing that?

SPEAKER_00 21:05

Yeah, that's a fantastic question. I mean, it's what's your bandwidth to manage all this?

SPEAKER_01 21:11

Right.

Consolidation And Private Equity Lessons

SPEAKER_00 21:12

Yeah, so I'll just give you kind of a case example. So for a combination of reasons, some of it was succession planning, and some of it was also for growth into new markets. Within the past four years, we've probably added 10 new positions and uh two new offices. The leap from 30 to 35 docs to 44 docs was seemed it seems now exponential. It's just tougher. Uh, we'll take it, I'll take a practical example, and a great example was X-ray. So we had this fantastic X-ray staff, and we still do have a fancy X-ray staff, but we've lost a lot of them. And we've lost a lot of them because the jump from nine offices to 11 offices, when you have a certain number of x-ray staff that have kind of got it figured out and they have their sweet spot and they can cover it and they've got it on cruise control, but you throw in five more days of clinic that they have to cover at two additional offices that are 20 miles apart, that upsets the Apple cart. And all of a sudden it becomes burdensome for them, and they they start having trouble getting that covered. And then that starts. So if you can't get that covered, then you can imagine what that does to your operations, and then you quickly realize that your COO, who is based down in Atlanta, is having to run up to Brazulton, Georgia, which is a 45-minute drive with no traffic. You can see where you get into some logistics, and then this is the real challenge. Maybe the hospital system that is closer to that employee who's not enjoying the drive says, you know what, we need some x-ray techs, and we're offering a great pay rate with some fantastic benefits. Why don't you come to work for us? So that's just a small kind of anecdotal example of where you get, and you can apply that kind of across the board. I'm sure that there are other listeners that can relate to some of the staffing challenges in orthopedics and in healthcare that followed COVID, but we weren't immune to that. The costs for employees have gone up, and then you throw in the ability to manage employees as you get as you grow. We do have a full-time HR director, but now we're we're realizing that they are overstretched. So we've learned some lessons about uh growth and maybe being a bit ambitious on some occasions, but we're starting to level set. But if we do grow, I can promise you we'll not be hiring 10 new doctors in a 24-month uh time period anytime soon.

SPEAKER_01 24:24

How did that affect culture for y'all? Because you pretty much increased your group by a third, right?

SPEAKER_00 24:29

Yeah, culture, yeah, it's tough. We have to, it's something we have to work on. Uh recently, we opened up a brand new office in Northeast Georgia, and recently our CEO, myself, and a couple of the other senior docs invited them into town, went out to dinner just to catch up and just hear about things, you know, how things are going, talk about tough cases, hear what life is like for them because there's not many touch points between these offices that are spread out. And that has not been great for the culture. I still think that we, you know, we try to get together a couple of times a year for retreats. I think that is critically important that everybody get together and and just you know, lay eyes on each other, break bread together, have a beer. That's important. But when you add docs, it definitely affects the culture.

SPEAKER_01 25:28

What issues have y'all had as a medium-sized group in terms of EHR implementation and such like that?

Scaling Pains: Staffing And Operations

SPEAKER_00 25:37

We are on Athena, and we moved to Athena about 10 years ago, and Athena has been great. It's very user-friendly for orthopedic clinicians, but we've been on it for 10 years. So most of us that have been practicing for a while know how to do it pretty well. I kind of alluded to it earlier. Athena doesn't speak very well to the hospital systems, and so the problem is, is if you're if you are not speaking well to the hospital systems, then there's a pretty good chance that you're going to lose communication and referrals with those hospital systems. So we are in the we are right now talking about it, but again, back to the watching our pennies, you know, switching to Epic or Cerner is a very pricey and time-consuming proposition. I guess what I'll do, Doug, is circle back with you in a year and let you know how that's going. Right now we have no plans to change, but at the same time, we realize that we we need to be open-minded to that because if you're not on the same system, then you're probably going to be missing out on some cases.

SPEAKER_01 26:51

What obstacles are in your path for you? Not, I don't even know if y'all are trying to get bigger. You may be at the right size that you want to be, but suppose you were trying to get bigger, exponentially bigger, move north of 75 to 80. What obstacles would be in Scott Camilly's path as he was trying to get Peachtree to that level?

SPEAKER_00 27:13

Yeah, there's several. So you have to look, first of all, if you're going into a new market, who's there? Is resurgence there? Chances are they probably are. No, they they are, they've done a great job of growing in a in a very controlled way. So you have to see who's there. You have to talk with the, I think you need to have a relationship with the hospital system where you're going. We learned this the hard way years ago, where we went into a market where we didn't have a great relationship. We went in with a little bit of hubris, a little bit of chest pumping on ours, you know, that we don't need the hospitals, and and we just never got any business. That was a failed experiment. So you got to look at that. Then you got to look at what's available from a land and medical office access standpoint. You got to have a place to see patients. It sounds intuitive, but that's not always the case. Some of these savier hospital systems have gone ahead and just gone on buying sprees, and they have all the medical office space in certain regions on lockdown. Kudos to them. That's just a brilliant strategy. You know, there's a lot of medical office buildings come with some constraints. And so these are things that you have to consider when you're going into a new market.

SPEAKER_01 28:43

Good advice. All right, let's get to the crux of the issue. So you're at AOA meeting and you're meeting a 45, 40, 45-year-old orthopedic surgeon, and she or he is fixing a move up into senior leadership in a group your size in some other city in America. What advice would you give them regarding leadership? How would you they ask like, what do I do with leadership? How do I lead this group? What have you learned over your time doing this? What it takes to lead a group of 45 or so orthopedic surgeons in a pretty competitive environment like you work in.

Culture, Cohesion, And Retention

SPEAKER_00 29:28

Yeah, that's an interesting question for me to answer right now because I would say we are in a bit of a cultural shift in the way that we manage the practice. You know, our practice has traditionally been physician run and physician led. And it's something that we've all taken great pride in. And I feel like it's an honor to be in this position because my predecessors have done an amazing job of building the Company to where it is, making the tough decisions to build ancillaries, making having the fiscal discipline to reinvest in the company. And it's paid off well. But I've come to the realization that I can't see patients five days a week operate, cover teams, do all the stuff that I need clinically with my executive board, with which is five other fully practicing doctors, and make decisions with a level of sophistication needed to compete in this market. It's just it's that's suicide. None of us are trained to do that. And so we so my advice would be invest in talent, management talent, CEO, COO, CFO, people that know what they're doing, that have healthcare experience. Don't try to be the smartest person in the room. Let the professionals help guide you. Obviously, it's collaborative, but we are trying to make that move where we let go of the wheel a little bit, Doug. And not that we're not still involved, we're still very much involved. Previously, the docs would make the strategy decisions, and then we would ask the management team to execute. Now we're a lot more open-minded. Don't try to be the smartest guy in the room.

SPEAKER_01 31:34

Very well said. That that speaks volumes, I gotta mention that's gonna take y'all a long way. But speaking of which, what are you? And you've brought up investing in people, investing in talent, which is so refreshing to hear. What are y'all doing to invest in future leaders and develop succession planning in Peter Tree? Anything, any programs or anything that you're encouraging folks to do to get more involved and to sit in your chair in the in the future?

EHR Choices And Epic Gravity

SPEAKER_00 32:06

Yeah, absolutely. So we one of the things I think the thing that other than our patient care, I think the thing that we do the best is recruit talent. I'm really excited about our younger docs. They're phenomenal. And they also they've chosen to come to us for a reason. I think we make it really evident when we have our recruiting with them that being a partner in Peachtree is not a spectator sport. You need to get involved. That's how we make it work. And it's gonna take some meetings and it's gonna take some time outside of your clinical practice. But if you want to be independent, that's the price you pay. And if you want to control your fate, you got to work to make sure you're controlling your fate. So they all kind of have that mentality and they've been enthusiastic. And so our practice is set up with a robust committee structure. So, like, for example, we have an operations committee, the chairman of which is a partner, we have a marketing committee, chairman is a partner, planning and development, workers' compensation, benefits, so on and so forth. And so every committee has one physician champion and one management member who is assigned to kind of help them, usually with about four or five physicians that participate on that committee. And just every aspect of the practice that they can that we can give them, we ask them to get involved. Now, some are more involved than others at different times, depending on what the situation is that we're facing. But you kind of come up into the leadership in our practice through committee. And once you've chaired a committee, then a natural progression from that is to go to the executive committee, which is six members, and that's where I ended up, and that's why I'm the president of the executive committee, and then we work directly with our management on the higher level day-to-day stuff.

SPEAKER_01 34:23

Very good. Sounds like y'all really are engaged in this and trying to build your successors.

SPEAKER_00 34:29

Yeah, we we it's it's an important part of our culture.

SPEAKER_01 34:33

All right, so we're at the AOA meeting in a high-rise hotel. We got a 45-second elevator ride. I step on there with you and I say, Scott, got a 45-second ride up to the top. Here's your elevator speech. Tell me, why should I encourage anybody to join the mid-sized group in orthopedic surgery who's just starting out a fellowship that's got 30 years to go? Why should I encourage them? What's the future of the mid-sized group in orthopedic surgery?

SPEAKER_00 35:01

Yeah, it's easy. So autonomy. The medium-sized orthopedic group, I think, gives you the best chance to maintain some autonomy in how you run your practice, how you run your staff, who you hire, who you fire, how you set up your clinic. Two, it gives you the best chance for efficient care of the patient that in turn will make your life and your practice more efficient. So streamlined decisions, access to ancillaries, access to ASCs, the ability to provide that patient everything that they need in a kind of orthopedic specifically designed way. And I think the medium-sized, independent orthopedic practice is perfectly suited for those docs that want to do that.

Barriers To Geographic Expansion

SPEAKER_01 35:59

I think that's going to resonate with so many folks because I have a feeling there's a tremendous amount of people in groups about your size across the country with similar issues and similar successes as they deal with this. It has been an absolute pleasure talking with Dr. Scott Kimmerly, who is president of the executive committee at Peach Tree Orthopedics in Atlanta, Georgia. Dr. Kimberly, sir, thank you for being on the podcast.

SPEAKER_00 36:24

Hey, Doug, thank you so much. It was an honor and I enjoyed our conversation.

SPEAKER_01 36:29

Thank you, Scott. And y'all stay tuned for future episodes in this podcast series.