Practice management companies may offer an alternative
As the pressure on independent practices has increased, many physicians have left their private practices to become employed in hospitals and health system settings. For those fighting to stay independent but who need some support, there are practice management companies.
Practice management companies have been around for a long time and take on different forms but they generally operate on a membership model that offers physician practices continued independence while providing consultation services, marketing strategies and technology systems and support, among other things.
To doctors desperately seeking a way to stay independent, such a partnership may sound like a convenient solution, but it’s not for everybody, cautions Steve Wigginton, president and CEO of practice management company, Medley Health.
“Our business model really puts a lot of pressure on picking the right partners and what that means is identifying physicians for whom this would be cost effective, for whom it would deliver the personal, professional and financial outcomes, that they would consider this to be an improvement or a win in terms of the way they want to practice medicine. So, it’s not for everyone,” he said. “We invest in the practice and we’re only going to do that if we know that we and the physician can be successful.”
Medley charges its physician members a fee that comes from what the physicians charge their patients but other organizations, such as Physicians Proviso (P2), a new company that bills itself as a physicians’ network, charge its physician members a tiered membership fee based on the services for which a physician signs up. An annual P2 membership ranges in cost from under $1,000 to $10,000.
P2 services physician practices with fewer than 10 physicians in the practice and was founded to give private practice physicians an alternative to joining a health system said its president, David Crais.
“There’s not many places to go if they’re a freestanding private practice that’s not affiliated with a hospital network,” said Crais. “The gravitational pull to just join a larger network to help them navigate through these changes is strong.”
It may be as tempting to join a practice management company as it is to join a health system, but doctors should make an effort to do due diligence before joining said Sidney Welch, a partner in the healthcare law firm Arnall Golden Gregory.
“I think in theory the concept of providing all of that back office support staff to physicians is certainly beneficial because there’s economies of scale in terms of the purchasing that could be achieved,” said Welch. “That being said, I think you have to look at them in the context of the (independent practice associations) that were providing some of those services and have those historically been successful, and I think the answer to that is probably no.”
Those thinking about joining a practice management company need to check out the vendors affiliated with the company, Welch said, as well as the company’s track record, and what former members have to say about it.