The transformation establishes direct physician accountability for performance. It also, typically, provides relief from the cost structure of the parent health system. Long term subsidies by the health system is eliminated after initial transitional funding. Privatization and divestiture are not materially different with respect to direct financial performance. Both require a resolution of financial issues related to contractual obligations.
Transformation supports a high level of retention of patient care activity within the system.
It also provides the opportunity to attract new physicians to the transformed structure. It erodes direct revenue of the system, however, by the transfer of ancillary revenues. Privatization unavoidably creates a new competitor to the parent system even with strategic alignment between the PPM and the health system. It reduces the ancillary revenues controlled by the system. Divestiture has the most damaging effects with respect to market share and revenue retention.