Wouldn't it be nice if physician practice management companies were the answer to every practice's needs? Then groups could sell their assets to an outside management organization and devote all their attention to practicing medicine.
Yes, and if pigs had wings they could fly.
Unfortunately, seldom are there simple solutions to the pressing problems facing medical organizations. The more common scenario is hospitals bleeding red ink after a frenzy of physician practice acquisitions and high-flying PPMs faltering because they don't have the infrastructure or competency to oversee doctors effectively.
In one dramatic turn of events, San Diego-based FPA Medical Management threw in the towel at Thomas-Davis Medical Centers, a 78-year-old clinic in Tucson, Ariz., that it bought less than two years ago from Foundation Health Systems.
It's no wonder doctors are frustrated, confused and anxious about what they should do to assure their future livelihood.
Physicians are fortunate that insurers and hospitals view them as essential to creating networks of care that solidify market share. But the downside is many seemingly fantastic offers have turned into trash. So caution clearly is the order of the day for medical organizations seeking outside management.
Managing practices for profit is a relatively new business that requires stability and vision. Many organizations do not have successful track records, nor do they understand the unique challenges facing medical practices today.
Those whose primary business strategy is aggressive practice acquisition -- and turning a quick buck -- likely will not have the energy left to manage the practices they have acquired.
The key to success is finding a management organization that shares your vision of high-quality, compassionate patient care. Practices that allow physicians to focus on events in the exam room and delegate business tasks to competent administrative personnel will have the best chance of achieving financial success.
You and your practice manager also should have common goals, expectations and incentives. Ally with an organization that has a mechanism that will allow your group to track practice performance, cost and utilization and then reward physicians appropriately. If it doesn't have such a mechanism, it should be willing to invest in creating one.
Finally, make outside investors prove how they will earn management fees by expanding your practice. Some firms are willing to tie fees to profits rather than revenues; some don't even buy a group's assets. The willingness of a practice manager to tinker with its fee structure shows responsiveness to physician concerns. And that's the kind of organization your practice wants to work with.