Don’t miss out! Register today for the 2019 Physician Practice Management & ASC Symposium, May 7-8, Nashville, TN
Private equity continues to fuel robust activity in the physician practice management (PPM) sector. Within the last five to seven years, not only have PPMs within traditional areas of medicine proliferated, but new specialties also have been joining the fray at a rapid clip.
While today’s PPM activity is vigorous, it is markedly more deliberate than the first iteration of these partnerships, which featured a rush of M&A activity but little income repair or ongoing integration, and ended with the dramatic collapse of the single-specialty PPM bubble in the late 1990s.
To ensure that a PPM is viable in today’s environment, consider the following strategies:
- Pick the right investment targets. Hallmarks of a sustainable health care business include improved outcomes over time and enhanced patient experiences (e.g., access to clinicians, ease of scheduling appointments).
- Focus on compliance. Take a close look at compliance and utilization early in the deal process. While a compliance audit adds up-front cost, it is a fraction of the price of litigation.
- Integrate. The 1990s PPM model left physician practices largely independent, with only a loose affiliation under a management agreement. Thorough and carefully planned integration will help you avoid repeating the mistakes of the past.
- Align your interests. Make sure that compensation and equity are calibrated to incentivize buy-in and a culture of ownership. Strong physician leadership is far more effective in driving [...]