Physician practice management companies were once quite common, and they've begun to resurface as a popular model for medical practices. So what exactly is a physician practice management company?
Understanding Local Laws
In most regions, for a variety of reasons, only physicians can own medical practices. This has been an advantage in many ways for medical professionals, but it can also be a disadvantage. After all, physicians are not necessarily businessmen. So, while owning their own practices is beneficial, it doesn't always make the most practical sense for either the physician or the practice as a whole.
How PPMs Can Help
Practice management companies, however, are a way for physicians to gain the same advantages as other businessmen, while complying with the law. A physician practice management company will acquire the assets involved in the practice, with the exception of real estate, and employs the entire staff of the company, aside from the physician and certain other medical professionals. The management company provides these assets and personnel to the physician for a fee.
So how is this beneficial to the physician? It's quite simple, really. The practice management company now functions as essentially a parent company and it can provide capital, assets, and other necessities if, for example, the practice needs to expand. Also, it handles the day-to-day tasks associated with running the practice, allowing the physician to concentrate on running the clinical aspects of his practice: the exact thing he trained to do in medical school.
Why PPMs are Big News Now
PPMs have gained attention recently due to the changes in the health care industry over the past several years. For example, the need to transition to more electronic and high-tech interfaces, both in the back office and in the clinic, means that most practices have a significant need for capital to expand. It's a far more streamlined option to use a PPM than to seek individual investors, or even community investors.
Healthcare reform has also made PPMs more desirable, because there have already been and will continue to be big changes in the patient payment model. Bundled services, risk management, and population health statistics will become far more important in the next decade, and all of these are aspects of business better handled by a PPM than by an individual practice.
Understanding Local Laws
In most regions, for a variety of reasons, only physicians can own medical practices. This has been an advantage in many ways for medical professionals, but it can also be a disadvantage. After all, physicians are not necessarily businessmen. So, while owning their own practices is beneficial, it doesn't always make the most practical sense for either the physician or the practice as a whole.
How PPMs Can Help
Practice management companies, however, are a way for physicians to gain the same advantages as other businessmen, while complying with the law. A physician practice management company will acquire the assets involved in the practice, with the exception of real estate, and employs the entire staff of the company, aside from the physician and certain other medical professionals. The management company provides these assets and personnel to the physician for a fee.
So how is this beneficial to the physician? It's quite simple, really. The practice management company now functions as essentially a parent company and it can provide capital, assets, and other necessities if, for example, the practice needs to expand. Also, it handles the day-to-day tasks associated with running the practice, allowing the physician to concentrate on running the clinical aspects of his practice: the exact thing he trained to do in medical school.
Why PPMs are Big News Now
PPMs have gained attention recently due to the changes in the health care industry over the past several years. For example, the need to transition to more electronic and high-tech interfaces, both in the back office and in the clinic, means that most practices have a significant need for capital to expand. It's a far more streamlined option to use a PPM than to seek individual investors, or even community investors.
Healthcare reform has also made PPMs more desirable, because there have already been and will continue to be big changes in the patient payment model. Bundled services, risk management, and population health statistics will become far more important in the next decade, and all of these are aspects of business better handled by a PPM than by an individual practice.