Impacts of Physician Practice Management Companies

Physician Practice Management Companies do not fall under the category of hospitals or insurers. Instead they act as a corporate partner to physicians. The PPMC provides them with expertise, money, and management services, which for independent physicians is an attractive offer.

Independent physicians are not the only ones that request the aid of PPMCs, group practices and clinics also look towards them to expand. However, selling your practice to them has its downsides as well. The physician has to be prepared for losing their independence and worry about lasting stability. Still, even with those concerns, PPMCs have become a multibillion dollar industry. This means that the impact of PPMCs is still prevalent today.

Understanding the Concept behind PPMCs

The main function of PPMCs is to work with single-specialty or multispecialty groups, primary care physicians, and physicians employed at hospitals. As mentioned in the above paragraph, the main role of the PPMC is to provide these groups with managed care expertise, capital, financing structure, experienced leadership, and management infrastructure. Physicians, in order to thrive, need to continually invest in their practice, which they are unable to do on a regular basis and that’s where the PPMCs take over.

Affiliating with the PPMCs

By affiliating with PPMCs, physicians hand over their practices to them. Over the years, the number of PPMCs has grown and there are many companies out there making lucrative offers to healthcare providers. However, physicians should not affiliate themselves with PPMCs just for a larger paycheck. Since their relationship will be long-term, they need to look at all possible outcomes of the relationship.

The physicians need to consider aspects such as patient care, management of contracts, a budding practice, and an increase in physician compensation. Hence, a physician working for that practice will be required by the PPMCs to sign an employment agreement with a professional corporation. The other employees who are not physicians will be considered as PPMC’s employees.

Restrictions of the Contract

The negative aspect of signing a contract is that PPMCs make it difficult for physicians to end the contract. However, they do this because they believe in creating a stable and long lasting relationship with the physicians.

The Rights of the Physicians

The physicians choose the board of directors for the professional corporation. The board of directors is in-charge of making decisions about clinical care. While business decisions are made by a joint policy board. The joint policy board consists of three non-physicians and three physicians.

Advantages of Affiliating with PPMCs

  1. Physicians receive money according to the market value of the practice.
  2. Getting shares in stock.
  3. Receiving the profits from bonuses and stocks.
  4. Physicians can direct their attention to clinical practice, get better timings, and their administrative duties are reduced.
  5. They have enough money to grow as a practice and they also can implement new systems into their practice.
  6. They have increased market share, increased access to purchasers, and increased access to managed care contacts.
  7. Lastly, they can incorporate better management practices such as payroll, cleaning services, and machines.
  8. The PPMC sets revenue targets for the practice to meet and if they fail to meet their targets, then the PPMC can obtain a larger percentage of the physician’s compensation, a larger management fee, and more assets of the practice.
  9. There is no stability, as the PPMC who just manages it may become permanent owners.
  10. Leaving the contract to start something new can become a hurdle, as the physician no longer has the rights to the managed care contracts.
  11. The physician will lose some control over their practice.
  12. If the PPMC hires the wrong people to manage the practice and make decisions, the practice may suffer.

Disadvantages of Affiliating with PPMCs

  1. The PPMC sets revenue targets for the practice to meet and if they fail to meet their targets, then the PPMC can obtain a larger percentage of the physician’s compensation, a larger management fee, and more assets of the practice.
  2. There is no stability, as the PPMC who just manages it may become permanent owners.
  3. Leaving the contract to start something new can become a hurdle, as the physician no longer has the rights to the managed care contracts.
  4. The physician will lose some control over their practice.
  5. If the PPMC hires the wrong people to manage the practice and make decisions, the practice may suffer.

Whatever step a practice might decide to take, they should consult multiple PPMCs and other options before making a decision.

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