When Patrick Noud, MD, arrived in Lansing, Mich., nearly two decades ago, independent orthopedic practice was still the norm. The region had eight to ten private groups back then. Today almost all of them are gone. What remains is a hospital-employed orthopedic group and Lansing-based Michigan Orthopedic Center, where Dr. Noud practices and serves as the de facto chief financial officer.
The forces behind that collapse are familiar to any independent group. Reimbursement keeps sliding. Operating costs keep climbing. Hospitals arrive with large guaranteed salaries, built-in referral networks and administrative support that a small practice cannot easily match. For many physicians, selling has come to look less like surrender and more like arithmetic.
Dr. Noud is not resigned to that outcome. In a July interview with Becker's, he argued that independence still has a future, but only for groups willing to run the business with real discipline. That discipline starts with the revenue cycle. The practices holding their ground have stopped treating billing and collections as a back office. They treat margin as something they manage on purpose.
Key Takeaways
Over roughly two decades in Lansing, the number of independent orthopedic groups fell from eight to ten down to essentially one, according to Dr. Noud's account.
His warning on margins is blunt: “There's not a year in which the same amount of work that we do results in the same margin.”
Survival depends on efficiency, disciplined cost control and new revenue streams such as ambulatory surgery, physical therapy and durable medical equipment. It does not come from simply working harder.
Dr. Noud sees technology as survival infrastructure, pointing to agentic AI for patient triage and administrative work that removes friction rather than replacing staff.
For technology in the operating room, he applies one test. It must reduce complications, improve outcomes or meaningfully increase efficiency.
Why Are Independent Orthopedic Groups Disappearing?
The appeal of employment is not hard to understand. Hospitals can offer a larger paycheck on day one, a referral pipeline that already exists, and a back office someone else pays for. Against rising costs and falling reimbursement, that package is persuasive. Dr. Noud has watched it thin the ranks of private practice in his own market almost to zero.
He also believes something real is lost in the trade. When physicians hand over the practice around them, he argues, they hand over more than paperwork. They give up the ability to shape how patients experience care from the front door onward.
What Does Giving Up Control Actually Cost?
Healthcare likes to describe the physician-patient relationship as two people in an exam room. Dr. Noud sees it wider than that. It includes the person at the front desk, the medical assistant who rooms the patient, the advanced practice provider, the billing staff and everyone else a patient meets. In an independent group, physicians can build that team on purpose and fix what is not working quickly.
Lose control of those pieces, he says, and disengagement follows. “You just start to coast,” he told Becker's. Ownership changes the math. Reviews matter more. Reputation matters more. Staffing, technology and the name on the building all matter more, because the people who own the practice carry the consequences.
Where Does the Margin Actually Go?
This is the pressure that never lets up. “There's not a year in which the same amount of work that we do results in the same margin,” Dr. Noud said. His conclusion is that a private group cannot survive by grinding out more volume at shrinking rates. It has to get more efficient and find new revenue.
At Michigan Orthopedic Center, that has meant building around ambulatory surgery, physical therapy, durable medical equipment and other ancillary services. Those lines are not just about physician income. They give the practice room to avoid cutting in places that would hurt patients. For a revenue cycle team, that is the whole game. Each of those service lines has to be contracted, coded and collected cleanly, or the margin they were supposed to add quietly leaks back out.
Why Is Technology Now Survival Infrastructure?
Dr. Noud is direct about this. Independent groups can no longer afford inefficient communication systems, especially as staffing gets harder. Practices are competing for workers not only with other health systems but with employers in entirely different industries. Anything that wastes staff time is a threat to the business.
His example is patient triage. For years a single call could turn into a chain of callbacks for missing information before anyone could direct care. He believes agentic AI and similar tools can gather the right details earlier, so a patient is not leaving an incomplete voicemail and a coordinator is not chasing it down. The point is not to replace people. It is to strip friction out of work that already overwhelms them, so the practice can respond faster.
How Should a Practice Judge New Technology?
Inside the operating room, Dr. Noud is more skeptical. Robotics, big data and augmented reality all crowd the conversation around shoulder surgery, and he refuses to adopt something simply because it is new. A technology has to clear one bar. It must reduce complications, improve outcomes or meaningfully increase efficiency.
He points to augmented reality that overlays anatomy to guide implant positioning. In cases where deformity makes orientation difficult, being five millimeters more accurate can decide whether a shoulder prosthesis holds. He also insists physicians own the cost question, even when they are not employed. “Technology doesn't exist if there's not somebody to utilize it, and they can't utilize it if the cost is exorbitant,” he said. Useful innovation, in his view, depends on physicians, industry and hospitals working the economics out together.
What This Means for Your Practice
Strip away the shoulder-surgery detail and Dr. Noud is describing a survival problem that every independent orthopedic and surgery-center leader now shares. Margin is no longer something you find at year end. It is something you manage all year, or lose. The groups that stay independent are the ones that made the revenue cycle a deliberate lever instead of an afterthought.
In practice that means renegotiating per-CPT rates against current cost data, catching underpayments before they age out, and tracking prior authorization one payer at a time. It also means making sure ancillary lines like the surgery center, physical therapy and durable medical equipment are billed and captured cleanly, so they add the margin they were built to add. Pair that discipline with technology and expert support that lowers administrative burden, and physicians keep the control Dr. Noud fought to protect. Cosentus does this work for orthopedics, wound care, pain management, anesthesia, behavioral health, ASCs and cardiology, built around the pressures specific to each specialty.
Frequently Asked Questions
Is independence still viable for a small orthopedic group?
Dr. Noud believes it is, but not on autopilot. He frames it as a marathon rather than a sprint, arguing that employment can look better on day one while independence pays off eight to ten years in for groups that run the business with discipline.
What ancillary revenue streams did Michigan Orthopedic Center build?
The practice built around ambulatory surgery, physical therapy, durable medical equipment and other ancillary services, in part to protect the patient experience from cost cutting.
Does adopting AI mean cutting staff?
Not in Dr. Noud's framing. He describes agentic AI and digital tools as ways to remove friction from overloaded workflows like triage, so existing teams can respond faster, not as a headcount reduction.
How does the revenue cycle fit into practice survival?
It is the core lever. When reimbursement is flat or falling, protecting margin depends on contract discipline, underpayment recovery, payer-by-payer prior authorization tracking and clean capture across every service line.
Where can we get help modeling this for our specialty?
Cosentus builds revenue cycle strategy around specialty-specific pressures. Reach the team at cosentus.com/contact or (800) 378-0049.
Talk to Cosentus
Reimbursement pressure is not going to ease on its own, and independence will keep getting harder to defend. If you want a revenue cycle built to protect margin across your orthopedic practice and surgery center, talk to Cosentus. Visit cosentus.com/contact or call (800) 378-0049.