Rothman Orthopaedics is refocused on Philly region, opening three new surgery centers
Rothman's plan for more free-standing surgery centers comes as Medicare and other insurers increasingly push procedures into the lower-cost facilities.
Rothman Orthopaedics plans to open three new surgery centers over the next year and keep adding doctors in its Philadelphia-area market, as the large physician-owned group refocuses growth efforts on its original territory.
“Our biggest priority in the near term is strengthening our core business here, in Southeastern Pennsylvania and New Jersey,” Rothman CEO Christian Ellison said. “We’re not gonna ignore opportunities. We’ll be opportunistic around things that make strategic sense.”
The new approach comes after a now abandoned effort to break into the New York market, first in a partnership with Northwell Health in 2017 and then with NYU Langone Health. That foray ended last year with the sale of Rothman Orthopaedics of Greater New York and its three locations to NYU Langone.
Rothman has seen more success after following the lure of fast population growth to Florida, where it opened offices in the Orlando area in 2020 in partnership with AdventHealth.
“Florida has been a big success, because we’ve had the partnership down there with Advent Health that’s been kind of mutually beneficial,” said Ellison, who became Rothman’s CEO last fall.
The Philadelphia draw
The practice headquartered in Center City already has 24 locations in the Greater Philadelphia market. That number includes facilities that Rothman operates in partnership with Jefferson Health, Main Line Health, AtlantiCare, and RWJ Barnabas.
Rothman located its newest office in West Chester, an area where Rothman had little market share, according to Ellison. He also sees opportunity in other parts of the Philadelphia region and contiguous markets.
To make that growth possible, Rothman is partway through an effort to hire 41 physicians by the end of this year. That represents a 20% increase and will bring Rothman’s total to 214 physicians, the company said.
The need for ambulatory surgery centers
Rothman is a partner in nine surgery centers in Pennsylvania and New Jersey and two surgical hospitals (Rothman Orthopaedic Specialty Hospital in Benslam and Physicians Care Surgical Hospital in Limerick).
Those outpatient facilities account for nearly two-thirds of Rothman’s surgeries. Even the surgical hospitals function primarily as ambulatory centers, Ellison said. The remaining third of surgeries takes place in acute-care hospitals.
“We are challenged for operating room capacity right now, both in the acute care hospitals, as well as in our ASCs, and so we feel like we need to bring more operating rooms online,” Ellison said.
What’s more, Medicare and private insurers want more procedures done in lower-cost surgery centers. In the future, insurers will pay the same price for an outpatient knee replacement whether its done in a hospital of freestanding surgery center, Ellison predicted.
Rothman hasn’t finalized locations for the new surgery centers, but Ellison said he expects two to be in Southeastern Pennsylvania and one in New Jersey. The centers will likely be in areas where Rothman has an established patient base.
The physician group prefers to open the new centers independently, as opposed to going through partnerships like it has historically. “We think we’re uniquely positioned to manage that patient experience in the surgical environment,” Ellison said.
