• Government
• Profession
• Business
• Opinion
• Health

• Health reform
• H1N1
• P4P
• EMRs
• Medicare
• Liability
• AMA House
• » More

• Book Excerpt
• Business Pitch
• Meetings
• » More

• Contract Language
• Ethics Forum
• In the Courts
• Practice Management
• Technically Speaking
• » More

• Issue dates
• Regions
• Health plans
• Sections
• News briefs
• Columns
• Editorials
• Letters
• Writers
• Other years

• Search tips
• E-mail alert
• Radio
• RSS
• Mobile
• Subscribe
• Institutions
• Staff directory
• Advertising
• Permissions
• Reprints
• News media
• Site guide
• Useful links
• About
• Premium
• Contact

Survival skills: Some PPMs have found their niche

While many physician practice management firms have failed, specialty PPMs thrive by partnering with doctors.

By Mike Norbut, amednews staff. Sept. 6, 2004.

• PRINT|
• E-MAIL|
• RESPOND|
• REPRINTS|
• SHARE

Stephen J. Dresnick, MD, has seen it all in the physician practice management industry.

The emergency physician founded Sterling Healthcare Group Inc., a pioneering PPM, in 1987. It grew quickly, went public in 1994, and was sold to San Diego-based FPA Medical Management Inc. in 1996. That was about when the roller coaster reached the top of the hill.

FPA went bankrupt in 1998, and Sterling was sold to Coastal Physician Group of Durham, N.C., which later became PhyAmerica Physician Group. A name change couldn't alter its fate, however, as PhyAmerica filed for bankruptcy in 2002.

Not one to frighten easily, Dr. Dresnick, backed by partners, bought his company back out of bankruptcy last year, and the reincarnated Sterling Healthcare got back in the market in February. Its focus is hospital-based physician services, and it has resumed its original strategy of growing organically, which was a key to success in the company's former life.

"As I look back, at the time, given the information, selling the company was the right decision," said Dr. Dresnick, who serves as president and CEO of the Durham company. "Today there's a lot less competition. Now's a good time to be in this industry."

It's a good time because natural selection weeded out all the bad business models, leaving few companies with which to compete. As evidenced by Sterling Healthcare's odyssey, much of the competition in the PPM industry wound up in bankruptcy court a few years ago without much warning to burned investors.