While the rise of MedPartners and similar companies makes for an inspiring tale of business growth, ther is, as usual, aparallel story of loss.
That side of the saga lies in the fact that physicians always relinquish some control when they sell their practice assets.
In fact, physicians sometimes are shocked to learn that they must change their hours, widen their patient base or share support staff, says Terry Noetzel, a partner at Deloitte & Touche Consulting Group.
"I think that there is an expectation that incomes will be maintained, if not enhanced, and that managed-care contracts will increase dramatically at the same time physicians continue to practice the way they always have," he says.
Blame physicians for failing to understand the harsh realities of business. Blame companies for overselling thier deals.
Stan Winokur, M.D., who heads oncology development at West Palm Beach, Fla.-based PhyMatrix, a physician practice management company, says the firing of two reputable executives of Friendly Hills HealthCare Network (See main story) didn't surprise him at all. He says physicians should enter contracts with companies as they would a marriage.
"In order to achieve the greater vision, you have to give up some control," he says.
Healthcare consultant Peter Boland believes the Friendly Hills episode offers a cautionary tale.
"I think there's a great deal of disillusionment among many physicians with PPMs," he says.
Still, the overwhelming anecdotal evidence is that few physician groups have tried to undo their deals with PPMs.
Also, more physicians than ever are selling out. During 1996, 368 acquisitions were completed by publicly traded PPMs, compared with 250 in 1995 and 141 in 1994, according to Sherlock Co., an investment advisory company in Gwynnedd, Pa.
Don Fisher, chief executive of the American Medical Association, thinks most physicians are happy with their decision to sell to PPMs, a sentiment echoed by many physicians. "The key, I think, falls on the ability of the physicians to set the medical agenda," Fisher says.
Still, there is a growing body of physician leaders who are cautiously speaking out against PPMs.
Frank Riddick Jr., M.D., chief executive officer of the Alton Ochsner Medical Foundation in New Orleans and former medical director and CEO of Ochsner Clinic, argues that PPM companies extract too great a premium for the services they provide. He advocates physician organizations partnering with each other, an idea that is slowly catching on.
At a January meeting of the AMGA, Riddick cautioned groups to pick their partners wisely. Otherwise, he said, "You may have sold your soul and sold the thing that brought you into medicine and enabled you to determine your own destiny."
But the trend to sell out could be too great to fight. Riddick notes that even his own medical group, the Ochsner Clinic, has started its own management company.