A somewhat unorthodox explanation for the rise and fall of physician practice management companies

Purpose – The purpose of this article is to present an alternative theory to why publicly‐traded physician practice management companies in the US were popular and successful for a limited number of years and then essentially self‐destructed. Design/methodology/approach – The short history of publicly‐traded practice management companies suggests that they had limited value and utility in the US healthcare industry. It is the premise of the paper that the sudden appearance these for‐profit companies upset the natural order within the healthcare industry and created a disequilibria which ultimately resulted in their demise. While Gaia theory is most commonly applied to the natural sciences, it has been applied to a number of interdisciplinary issues. Findings – Physicians gravitated to these for‐profit companies either out of fear of encroaching managed care or out a desire to sell their practice to the highest bidder. Physician practice management companies, on the other hand, saw a way to entice stockholders to invest in a growth industry. The paper suggests that the physician practice management companies added little new value to the health care industry and applies Gaia theory as a possible explanation for this phenomena. Gaia theory was first postulated in 1979 to address the evolution of the material environment and corresponding organisms as a tightly coupled system which attempt to manipulate the environment for the purpose of creating biologically favorable conditions. Originality/value – The paper is one of the first to suggest that the laws of nature, as understood from the perspective of Gaia theory, may have applicability to the US health care industry.