There are many critical issues facing the physician practice management (PPM) and ambulatory surgery center (ASC) industries today, including the effects of sky-high valuations, concerns about sustainability, and the importance of delivering on value. This current environment demands new approaches to PPM structures — one that is focused on alignment and designed to enable growth.
Below are five key market issues to be addressed at the 2018 Physician Practice Management & ASC Symposium in Nashville, TN on April 25-26, where industry leaders will come together to discuss trends in the current landscape and the myriad business, transactional and regulatory issues that exist today, including:
- Continued growth of the PPM industry: As the pace of transactional activity in the Physician Practice Management (PPM) industry increases, today’s transaction structures and affiliation models continue to evolve, with an emphasis on achieving ongoing economic alignment with physician owners, providing physicians with a clear pathway to partnership and executing on a clear growth strategy that delivers value to medical practices. However, with valuations high and increasing still, will the PPM bubble burst and leave someone holding the bag?
- Impact on the ASC industry: Clearly, a new stakeholder has entered the ASC arena. Today’s PPM platforms are purchasing 100 percent of any ASCs affiliated with the medical practice, or developing their own de novo wholly-owned ASCs as part of their growth strategy. This presents unique challenges for traditional ASC management companies and health systems, which typically purchase only 51 percent of an ASC in a traditional joint venture model. How has the growth of PPM platforms impacted the ASC industry and today’s ASC transactions?
- Private equity vs. strategic investors: National PPM platforms (backed by private equity) and strategic investors (such as ASC management companies) are competing for a limited set of assets with very different alignment strategies and transaction structures. Private equity PPMs come equipped with capital, financial and technical expertise, a sophisticated growth strategy, an innovative vision for the health care industry, and the promise of a second liquidity event. Strategic investors, on the other hand, offer more up-front cash, sophisticated compliance programs and a preexisting infrastructure, the promise of reduced administrative burdens, managed care synergies, boots on the ground, a proven track record and a long-term relationship. The jury is out on which investor will achieve more successful partnerships.
- Incentivizing physicians post-deal: It’s one of the questions that keeps buyers up at night: How do you continue to incentive physician partners after a deal is done? The answer is careful planning on the front end. Today’s buyers are carefully considering physician compensation plans; structuring pathways to partnership; paying a portion of purchase price proceeds via rollover equity, promissory notes and holdbacks; and modeling in a decrease in productivity.
- Aligning with physicians and prioritizing value: More than ever before, today’s PPMs and ASC investors must deliver on their value propositions if they want a chance to succeed. To do so, potential strategic partners must have a vision and growth strategy that puts value at the center and includes a roadmap to achieve it.
Attend the 2018 Physician Practice Management & ASC Symposium, taking place in Nashville, TN, on April 25 – 26, to hear first-hand from PPM and ASC leaders about the changing environments and the strategic and legal imperatives for investment success in 2018.
2018 Physician Practice Management & ASC Symposium
April 25-26, 2018
Two Conferences – One Venue
- Day 1 | April 25 | Opening General Session – Keynote Panels
- Day 2 | April 26 | PPM-Focused Programming / ASC-Focused Programming