Hospital-Physician Joint Ventures
M. Shane Foreman
Principal & Founder
3d Health
Not every conversation is an actual opportunity – we help our clients test the market, project the economics, and structure relationships that make sense. Our frank and honest style is welcomed by both hospitals and physicians.
When properly structured, hospital-physician joint ventures can increase access to capital and clinical expertise while aligning financial incentives for the investors. Improperly structured, however, hospital-physician joint ventures can lead to under-performing financial results, hard feelings between the parties, and sometimes compliance issues.
The Stark III final regulations published in September 2007 have reduced the number of relationship structures available to hospitals and physicians interested in partnering. 3d Health works closely with internal and/or external counsel to identify the structural options available at the outset of a project. 3d Health also has well established relationships with nationally recognized counsel that our clients can utilize.
The business case for any contemplated hospital-physician joint venture must also be thoroughly tested prior to formation. The formation of a joint venture does not always equate to a business opportunity. It is critical to understand the dynamics of the market, the perceived opportunities within the market, the best way to organize and position the venture, and the projected economics of the JV including whether the venture should be provider-based or freestanding.
At 3d Health, we work with our clients to identify, test, and confirm market opportunities and to negotiate and structure mutually beneficial relationships centered on capturing incremental patient volume and resulting market share.
We assist our clients with:
- Opportunity testing
- Provider-based reimbursement differential
- Discussion facilitation (3rd party advocate)
- Pro forma development
- Deal structuring
- Traditional joint ownership models
- Joint operating models ("Under Arrangements")
- Management agreements
- Real estate partnerships
- Clinical institutes
