Joint ventures can come in many different forms, but some models are emerging as more common than others. “The popular structure involves the development of a joint venture with a hospital, physicians and ASC company,” said Ms. Cintado. “Strange bedfellows have become common partners.”
Here are five benefits of a joint venture, either three-way or between a hospital and physicians.
• Higher in-network reimbursement
• Access to narrow networks
• Increased awareness in the community
• Clinical integration
• Physician recruitment tools
From the hospital perspective, benefits include:
• Physician alignment
• Lower costs
• Ability to capture cases being moved to the outpatient setting
• Capture higher acuity cases not being performed in the hospital
• Increased efficiencies
• A revenue generator that doesn’t not require that requires limited capital
Potential challenges include:
• Differences in strategic vision
• Hospital reluctance to allow cases to migrate to the ASC
• Physician concern in regards to hospital control
“Physicians fear that a hospital will insert itself into management,” said Mr. Richter. “In a three-way joint venture, the ASC company’s role is to handle that management.”
More articles on transactions and valuation issues:
USC affiliates with SCA
Should you sell your ASC? 17 questions to ask
Bradley Hospital opens ASC
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
