The heyday of the large, publicly traded PPMs that owned hundreds of medical practices and employed thousands of physicians is long gone. But many of the firms are still around in one form or another.
Only a handful of single-specialty PPMs remain healthy. Pediatrix Medical Group (neonatal intensive care) and AmeriPath (pathology) are among the few with double-digit stock prices.
But many of the casualties of the PPM crash of the late 1990s have found a fresh start. The common thread in all the transformed PPMs is that none has direct control over physicians.
"It was more perceived control than real control," says Sharon De Rosa, COO of the Chicago Institute of Neurosurgery and Neuroresearch. "Once you have that middleman, it is perceived that way."
The practice is a client of NeuroSource, a Chicago-based subspecialty management firm that got out of practice management a year ago and now consults with about a dozen practices and health systems.
On July 31, Nashville, Tenn.-based PhyCor, the poster child of the meteoric rise and fall of the PPM business, emerged from bankruptcy protection as a privately held healthcare risk management company called Aveta Health. What remains is a 700-employee operation, down from a peak of 15,000, not counting the 4,200 physicians at PhyCor-owned practices.
Also in late July, Surgis, a surgical services company headed by former PhyCor chief Joseph Hutts, landed $100 million in venture capital commitments and closed on the acquisitions of an ambulatory surgical center operator and a firm that manages endoscopic services for hospitals. The new company does not own any practices.
MedPartners, once PhyCor's chief rival, sold its 85 Southern California practices to KPC Medical Management in August 1999 and restructured itself into Caremark Rx, a pharmacy benefits manager based in Birmingham, Ala. It also spun off Team Health, a Knoxville, Tenn.-based PPM for emergency medicine.
KPC itself filed for bankruptcy in November 2000 and sold the practices back to the physicians.
Even the specialty PPMs have undergone reinvention. Physicians helped executives of Physicians Resource Group, a failed ophthalmology PPM that did not employ physicians, buy out the information technology department and transform it into MediNetwork, a practice consulting firm in Dallas.
At one point, PRG had 160 practices, 300 locations, more than 600 physicians and 5,500 employees. "We ran all the internal systems and ran the practice management software for 40 practices," says Mark Johnson, former chief information officer of PRG and now president of MediNetwork, which today has a mere 21 employees.
Specialty Care Network SCN, a Lakewood, Colo., PPM that once owned the assets of 24 musculoskeletal practices comprising 183 physicians, tried to cash in on the dot-com boom in late 1999 by creating healthgrades.com, a consumer Web site that compiles quality data on physicians, hospitals and health systems.
Ironically, only the Web venture survives.