Healthcare Venture Professionals — Article Library

All entries for May 2011

Physician / Hospital Collaborative Strategies

There are increasing opportunities for Physicians and Hospitals to consider unilateral development and ownership of various clinical Ventures.  This approach will continue to make good sense in select markets for a variety of strategic and business reasons.

As we look toward the future, however, HVP believes that a collaborative approach is still a preferred partnership model that makes the best long term business and strategic sense in many markets.  It is this belief that drives HVP to maintain a strong focus and special expertise related to Physician / Hospital Joint Ventures.  Although HVP’s core business is management, frequently we are asked to provide consulting services in situations where such collaboration is being considered.

Here are some highlights of what we’ve learned in helping our clients form successful partnerships:

Top 10 Lessons Learned: 

  1. Most Physicians prefer to look first to the Hospital (vs. national for-profit chains) as a potential partner for outpatient services.
  2. Hospitals that seek to proactively collaborate with their physicians get better deals than those who wait.
  3. Most Physicians prefer to collaborate with their local Hospital but will readily compete if the Hospital is not willing to “share the pie”.
  4. Physicians believe that Hospitals move too slow.  Hospitals believe Physicians are too impatient.  Both are frequently right.
  5. What you’ve heard is true:  “It is better to have 50% of something than 100% of nothing”.
  6. A single, successful Partnership “sets the table” for ongoing partner behavior where both parties are routinely looking for other collaborative opportunities.
  7. A growing number of Hospitals who now own 100% of a service (especially a Surgery Center) are actively considering converting these services to a JV.
  8. Most Physicians do not want the Hospital to have management control over the Partnership – they fear it will be run like a Hospital Department.
  9. A Joint Venture will improve your Hospital’s ability to recruit new Physicians – competition here is nation-wide and many locations will offer this option.
  10. A well conceived Joint Venture can result in a “bigger pie” for Hospitals and Physicians.

Top 3 Things Physicians Want in a Joint Venture:

  1. More control over operational decision-making;
  2. Better patient experience;
  3. Opportunity to replace lost income from lower reimbursement.

Top 6 Advantages for Physicians to JV w/ Hospitals:

  1. Easier access to capital
  2. Access to better payor contracts
  3. Access to group purchasing organizations
  4. Support of referral physicians
  5. State CON “clout” (where applicable)
  6. Preservation of relationship with the Hospital

If you are a Physician or Hospital representative and are considering collaborative strategies, HVP has the expertise and experience to assist you as you investigate or pursue such strategies.