The End of PPM 1.0: And the Emergence of a More Durable Model for Investors

Shifting market conditions have reshaped the physician practice management (PPM) model for healthcare investors. In this article, Katherine Gibson, David Klein, MD, and Paulina Toutounji of Marwood Group, together with Sidley's Chad Ehrenkranz, examine how rising interest rates, reimbursement pressure, and regulatory scrutiny have exposed structural weaknesses in traditional PPM strategies and outline the transition to a more resilient framework.

The first generation of PPM relied on rapid consolidation, leverage, and multiple expansion, but proved vulnerable to operational, financial, and physician alignment challenges—many of which were amplified during and after COVID-19. In response, a “PPM 2.0” model is emerging, focused on integration, reimbursement strategy, and long-term physician engagement. As regulatory oversight intensifies and capital markets evolve, the authors highlight how durable value creation will depend on disciplined growth, operational sophistication, and alignment across stakeholders.