Expect a tough opponent when you depart a PPMC
There is a silver lining to starting over
If you’re unhappy with the contract you have with a physician practice management company (PPMC), you can expect to encounter some difficulties in getting out of it. But it may not be as acrimonious as you think, asserts Bob Healy, president of Physicians Strategic Resources, an Atlanta-based firm that specializes in helping physicians disengage or "unwind" from PPMCs.
"Every unwind is unique. The common belief is that these unwinds are inherently adversarial, but we’re seeing some changes. Many PPMCs are reinventing themselves by getting actively involved in clinical trials or other areas. Because of that, the unwind process is moving a little quicker," Healy says.
Make no mistake: PPMCs are still hard-nosed negotiators when it comes to terminating contracts with physician practices they have purchased. But it’s to their benefit to reduce the length of the unwind process, partly because they’re moving on to new ventures and also because of the unfavorable press coverage they’ve received in the past, Healy adds.
Contracts with PPMCs typically cover 20 to 40 years and may have restrictive exit clauses that make disengagement difficult. For instance, some contracts say the physicians cannot exit the agreement unless the PPMC is bankrupt or in default. In other contracts, physicians can disengage from the PPMC, but it will cost them money. Most contracts have non-compete clauses with geographic and time restrictions that limit the physician’s ability to continue treating his or her patients.
Deconstructing a practice management contract is a lengthy and expensive process. But there is a silver lining — in fact, two silver linings — in an otherwise difficult situation, says Ernest Berger, chief operating officer of Physicians Strategic Resources.
First, there is a whole new generation of doctors who have the sophisticated knowledge of information systems and business acumen to take the practice where it needs to go in the next century.
The second silver lining is that the smaller practices that were purchased and became a part of a large PPMC can regroup and form larger practices that can dominate the market.
"Maybe a practice had six or seven physicians when it was bought but is accustomed to working with many other physicians in the PPMC. They can unwind as a 40-doctor practice and come up with a much more efficient organization that allows them to have a presence in the market and take advantage of economies of scale," Berger says.
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content