Physician entrepreneur Stephen Dresnick, M.D., is among the investors preparing to purchase failed emergency medicine PPM PhyAmerica Physician Group following a bankrupty judge's approval of a restructuring plan.
On Wednesday, U.S. Bankruptcy Court Judge E. Stephen Derby in Baltimore gave his approval for Miami-based emergency physician Dresnick and investment manager Resurgence Asset Management to buy the PPM and its more than 200 hospital contracts for $90 million.
Dresnick's investment group won a bankruptcy auction for PhyAmerica's assets on Nov. 25. They expect to close the deal within 30 days and revert to the company?s original name, Sterling Healthcare Group. Dresnick currently runs a firm called Sterling Healthcare Solutions.
Dresnick calls this "a good time to jump back into this industry" because the surviving PPMs have learned from the mistakes of the 1990s and because information technology has improved to the point that it is readily accessible and affordable for physicians.
"I think the environment now is very ripe for a new model," Dresnick says. "The new model is more toward physician ownership/decisionmaking, with the management company providing true management services."
A number of PPMs, including PhyAmerica predecessor company Coastal Physician Group, failed in the late 1990s because they took control and practice ownership--and thus any performance incentives--away from physicians.
Also, Dresnick says, new technology allows the management company to deliver clinical information, continuing medical education and risk management tools to physicians via the Web, helping practices operate more efficiently and deliver better care.
"Things that you couldn't do five years ago now can be achieved with off-the-shelf software," Dresnick says.
Dresnick sold Sterling to FPA Medical Management in 1996, which then was purchased by Durham, N.C.-based PhyAmerica in 1999. PhyAmerica filed for Chapter 11 bankruptcy protection last year after its chief financier, scandal-plagued National Century Financial Enterprises, collapsed.
Coastal founder Steven Scott, M.D., resigned last week as chairman of PhyAmerica, says Dresnick, who founded Sterling in 1987.