Joint Ventures

Joint Venture Experience Ambulatory Surgery Centers (ASCs) Imaging Centers Oncology/Infusion Centers Cardiology/Cath Labs Endoscopy Centers

Throughout the fragmented healthcare industry, joint ventures continue to proliferate as a means for aligning incentives and long-term business interests. These ventures often involve physicians and hospitals, but can also be between hospitals or between medical groups. Physician/hospital joint ventures continue to be a major strategy for many health systems as this arrangement addresses physician need for alternative revenue sources and assists hospitals in achieving greater alignment with providers.

For many hospitals, a joint venture means sharing revenue they previously enjoyed for themselves. However, a successful joint venture can help preserve both revenue that might otherwise be lost to competition and fragile relationships with physicians. For physicians, a joint venture provides increased revenue and can enhance the group’s recruiting efforts – a result that hospitals also appreciate.

Whether the venture involves a service line (such as cancer, cardiac, or neurosciences), ambulatory surgery, or imaging services, ECG understands both hospital and physician perspectives in undertaking a joint venture and can help balance competing needs and priorities. We also understand the financial implications and the operational necessities which ensure that a joint venture meets the goals established by its partners.

Specific tasks that we undertake in joint venture design and development include:

• Developing key operational assumptions, including service mix and volume, equity arrangements, and joint venture valuation.
• Projecting financial performance, including analyzing the financial impact of the joint venture under various scenarios, potential reimbursement changes, and the impact of not pursuing the joint venture.
• Developing a viable joint venture structure (including ownership and governance arrangements) based on the needs of the investors.

ECG can also help clients with implementation and interim management to help ensure that the joint venture gets off to a successful start.

To learn more about our work in this area, please see the following examples of our client’s successes: