For several years OrthoTennessee has been aggressively reevaluating its East Tennessee office needs and expanding its real estate portfolio in ways that meet current services and future growth.

Other large practices are likely following suit, so it’s instructive to look at how willing a provider is to be nimble in terms of location, size, services and even co-occupancy.

“In 2021, we opened a new office in Powell, moving from inside a medical office building on a hospital campus to a free-standing building just off that campus,” says Pete Pearson, chief executive officer of OrthoTennessee. “That doubled our clinical capacity and also let us add MRI services to that location.”

That new build was followed in 2022 by the Orthopaedic Institute in the University of Tennessee’s Research Park at Cherokee Farm. It’s a joint venture between OrthoTennessee and the UT Medical Center and was another example of almost doubling capacity alongside expanding treatment options and realizing efficiencies.

“It was a significant move for our therapy practice and other capabilities, and also allowed us to add MRI treatment and a seven-room ambulatory surgery center that is ortho-only,” Pearson says.

The practice also has entered into an agreement with the university to utilize the building’s third floor for graduate-level medical research, primarily related to musculoskeletal issues.

And finally, a new building opened in Morristown, in the Merchant’s Greene retail area. It once again expanded capacity while reducing office space footprint, all while giving the practice more control over its destiny in terms of owned real estate.

“Our group works with all five of the major health systems in the area: Covenant Health, Tennova Healthcare, the UT Medical Center, Blount Memorial Hospital and East Tennessee Children’s Hospital,” Pearson says. “Our size allows us to take on the financing for these projects and create a real estate entity that our physicians are owners in, so we can lease these buildings back to ourselves. We make sure the buildings are designed the way we want them designed and support our workflows.”

That’s workflows now and in an unpredictable future, he adds.

“We know there may be change from a service perspective,” he says. “We control the ability to going and renovate of retrofit to match what we want to offer with the ability to be able to access their health care. We want to control the entirety of the patient experience, and the right facility design is a big part of that.”

Commuting for care

And those patients are not shy about making their preferences known. For example, when the COVID pandemic hit, OrthoTennessee had a six-week period with only one surgery center open. Elective surgery was banned, so everything moved into this location, the Knoxville Orthopedic Surgery Center, for fractures and urgent cases that were allowed to be treated.

When it was possible to reopen other facilities, Pearson says the group noticed a distinct reluctance on the part of people to come to a hospital for a procedure versus a surgery center, whereas before it might have been the opposite.

“Early in COVID people were seeing lots of people at big hospitals, and a lot more chance of exposure,” he says. “That changed their mindset about a smaller center, where they felt their outcome would be good and they would also reduce that risk.”

In addition, he says, surgery centers also are benefiting from a higher usage from employers and their insurers, also with an eye toward cost savings and more efficient care.

“An ambulatory surgery center can be a lot less expensive than an outpatient department at a hospital or the main hospital itself,” Pearson says. “Employers are pushing their insurance providers to incentivize patients who are clinically able to have their procedures done at an ambulatory center to do that. I believe that will continue, and that will drive more of these centers. We want to make sure that our current and new spaces are welcoming and safe, and so we all are working toward that.”