Hospital-physician joint ventures — such as physician-hospital organizations or other affiliations — present an array of opportunities and benefits for both parties. Physicians strengthen their brand and increase their access to capital and clinical resources while hospitals bolster their physician-alignment, service lines and position in the marketplace. Implemented poorly, though, and a joint venture can result in a dysfunctional culture, poor financial results and a weakened reputation in the community. "Very rarely will a joint venture have long-term benefits without a culture of partnership, equal control and valuable leadership," says Patrick Hampson, chairman and CEO of MED3OOO.
MED3OOO offers practice management and revenue cycle management services, accountable care organization development and business and clinical operation services, including third-party administration, population health tools and predictive modeling to joint ventures. It also offers sophisticated technology and data analytics, such as practice management and electronic health systems, electronic recall systems and data warehousing. Here, Mr. Hampson discusses some of the challenges and best practices for hospital-physician joint ventures.
1. The right sets of knowledge and tools are necessary to expand physician affiliations. To expand affiliation with physicians or other providers in the community, a hospital should have a portfolio of products and services that are needed in the community. "Critical to any and all services is the ability to capture stagnant data and turn it into proactive business and clinical improvement," says Mr. Hampson. "You have to be able to add value to the delivery of healthcare or you won't have any long-term traction." These resources such as population health or predictive modeling may be more difficult for physicians to obtain in a small practice setting.
2. Adaptation may be the largest challenge in the first five years. The initial hurdle for hospitals and physicians to overcome in a new joint venture is to embrace change. "Healthcare is not a stagnant industry. It is constantly changing due to market dynamics, changes in regulations or reimbursement, and the economy," says Mr. Hampson. Successful hospital-physician JVs require leadership that stays ahead of these changes and drives the JV through transitions that are not only related to the new model, but the industry overall.
3. Joint ventures should be offensively driven. Hospitals should not resort to the joint venture model as a defensive tactic to gain or protect market power. "Defense is not a long-term sustainable strategy," says Mr. Hampson. If used as such, the joint venture will likely dissipate over the years. Instead, leaders should have an offensive strategy that presents growth opportunities for each party involved. If joint ventures happen to be part of this offensive plan, the transaction has a far better probability of turning out successfully.
4. Create a win-win situation. Hospitals should enter joint ventures eager to help partners win. "The most successful joint ventures are those where each party understands the other parties' goals, objectives and what drives them," says Mr. Hampson. Understanding perspectives of each provider will help prevent a dysfunctional relationship between the hospital and physicians. A hospital's first joint venture may very well set precedent for transactions or joint ventures to follow, so organizations should work hard to earn a reputation as a preferred partner, not a partner out of necessity.
Related Articles on Hospital Joint Ventures:
Academic Health and Hospital Operator Partnerships: Q&A With Dr. Bill Fulkerson and Bill Carpenter of Duke LifePoint Healthcare
5 Problems That Hurt a Hospital-Physician ASC Joint Venture — and How to Avoid Them
7 Critical Areas of Focus for a Successful Turnaround of a Physician/Hospital Joint-Venture ASC
MED3OOO offers practice management and revenue cycle management services, accountable care organization development and business and clinical operation services, including third-party administration, population health tools and predictive modeling to joint ventures. It also offers sophisticated technology and data analytics, such as practice management and electronic health systems, electronic recall systems and data warehousing. Here, Mr. Hampson discusses some of the challenges and best practices for hospital-physician joint ventures.
1. The right sets of knowledge and tools are necessary to expand physician affiliations. To expand affiliation with physicians or other providers in the community, a hospital should have a portfolio of products and services that are needed in the community. "Critical to any and all services is the ability to capture stagnant data and turn it into proactive business and clinical improvement," says Mr. Hampson. "You have to be able to add value to the delivery of healthcare or you won't have any long-term traction." These resources such as population health or predictive modeling may be more difficult for physicians to obtain in a small practice setting.
2. Adaptation may be the largest challenge in the first five years. The initial hurdle for hospitals and physicians to overcome in a new joint venture is to embrace change. "Healthcare is not a stagnant industry. It is constantly changing due to market dynamics, changes in regulations or reimbursement, and the economy," says Mr. Hampson. Successful hospital-physician JVs require leadership that stays ahead of these changes and drives the JV through transitions that are not only related to the new model, but the industry overall.
3. Joint ventures should be offensively driven. Hospitals should not resort to the joint venture model as a defensive tactic to gain or protect market power. "Defense is not a long-term sustainable strategy," says Mr. Hampson. If used as such, the joint venture will likely dissipate over the years. Instead, leaders should have an offensive strategy that presents growth opportunities for each party involved. If joint ventures happen to be part of this offensive plan, the transaction has a far better probability of turning out successfully.
4. Create a win-win situation. Hospitals should enter joint ventures eager to help partners win. "The most successful joint ventures are those where each party understands the other parties' goals, objectives and what drives them," says Mr. Hampson. Understanding perspectives of each provider will help prevent a dysfunctional relationship between the hospital and physicians. A hospital's first joint venture may very well set precedent for transactions or joint ventures to follow, so organizations should work hard to earn a reputation as a preferred partner, not a partner out of necessity.
Related Articles on Hospital Joint Ventures:
Academic Health and Hospital Operator Partnerships: Q&A With Dr. Bill Fulkerson and Bill Carpenter of Duke LifePoint Healthcare
5 Problems That Hurt a Hospital-Physician ASC Joint Venture — and How to Avoid Them
7 Critical Areas of Focus for a Successful Turnaround of a Physician/Hospital Joint-Venture ASC