The health care field is evolving at light speed, adapting to changing patient, physician and payer expectations. This is particularly evident in the physician practice management (PPM) and ambulatory surgery center (ASC) industries. We gathered recently in Nashville, Tennessee for the 2018 Physician Practice Management & ASC Symposium to explore and discuss these changes – from what’s improved in the PPM industry since the bubble-burst of the late 1990s to the challenges that lie ahead.
We had more than 500 attendees at the conference – from PPM/ASC executives, private equity professionals and investment bankers to provider-side representatives and fellow attorneys. With so many knowledgeable minds in one place, there was no shortage of learning opportunities around the critical business, transactional and regulatory issues facing the PPM/ASC industries today.
We saw one overarching theme surface during both sessions: running a PPM or ASC is more like running a co-op than a business. Therefore, in order to deliver meaningful value, there needs to be an honest and reciprocal relationship between management and physicians. In other words, there needs to be collaboration and input from all parties.
With that, here are our five key takeaways for bringing value to a PPM/ASC practice:
- Understand today’s physicians, not those from the ‘90s: Today’s physicians are younger and leave medical school with more debt, but they also expect a more comprehensive work-life balance than Gen Xers did. As a result, they may be willing to work for large, established practices instead of starting their own or joining a small independent practice. Aligning this idea with the reality of increased regulation and administrative tasks means that appealing to the newest generation of physicians doesn’t necessarily mean selling the idea of a PPM, but rather how a specific agreement can add value in a differentiated way.
- Gather physician input: Whether you’re running a PPM or an ASC, soliciting input from the physicians who run the day-to-day clinical operations is of the utmost importance. This should happen from the outset of the relationship and continue even after the deal is done to foster a workable, successful environment over the long-term. Multiple Symposium panelists touched on how the greatest barrier in acquiring a practice can be lack of trust and understanding. It’s worth going the extra mile to get to know the physicians you’ll be working with. After all, they’re going to be your partners, not only in the management of the practice, but in its overall success as they are revenue generators.
- Allow for autonomy: Part of developing a strategic partnership with physicians lies in mutual trust. A PPM/ASC that micromanages its physicians signals distrust, which creates an unhealthy partnership. As discussed during the “Delivering on the PPM Value Proposition” panel, one of the two major ways to entice groups that don’t have a “for sale” sign up – aside from valuation – is ensuring that once signed, physicians will continue to have a certain amount of autonomy in their everyday work. When it comes down to it, the daily work of physicians is the practice of medicine, not the administrative tasks.
- Ensure a smooth transition: As noted during our “Closing is Just the Beginning” panel, acquiring a PPM or ASC is not easy when considering all the logistics to overcome. From financial to personnel to cultural integration, all are important considerations when bringing a new practice under your wing. Cultural integration, in particular, was the consensus among the panelists when discussing the biggest barrier to a smooth transition. Make sure physicians feel welcome, included and comfortable with this arrangement, whether you’re at the deal-making stage, the transition stage or the daily work stage. PPMs must continue to be actively involved and bring value, or there will be physician resentment down the road.
- Be open to partnership opportunities: When asked about their willingness to partner with health systems and hospitals during the “Getting ASC Deals Done in Today’s Competitive Environment” panel, the consensus among the participants was that if it improves conditions for physicians, it is worth considering.
We want to thank all of the panelists and attendees at our 2018 Physician Practice Management & ASC Symposium this year for contributing their thoughts and allowing us to leave the conference a little bit smarter on today’s PPM and ASC industries. We’re looking forward to next year.
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