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What Is a Hospital Joint Venture?

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  • Written By: K.C. Bruning
  • Edited By: John Allen
  • Last Modified Date: 05 December 2016
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A hospital joint venture is often a business partnership between an individual physician or group of physicians and a larger medical facility. It can also be a relationship between a tax-exempt hospital and a for-profit facility. In a typical agreement, the professional or group uses hospital facilities to conduct business while maintaining independent status. Often a hospital will arrange for several joint ventures with physicians in order to create a thriving facility with several options for patient care.

There are several benefits for physicians who participate in a hospital joint venture. This kind of arrangement can give professionals access to equipment, services, and facilities that would otherwise be too expensive for an individual practitioner. Partnering with a larger organization can also give physicians greater visibility and access to more patients through general advertising efforts. Being based in a larger facility can also give individual physicians better access to other professionals whose services may be useful as supplemental or alternative treatment.

A medical facility can also benefit from partnering with a physician or group in a hospital joint venture. With a sufficient number of partnerships, a hospital can attract patients who are looking for several options for care. They may also be drawn to the convenience of having comprehensive services available in one location.

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To create a successful hospital joint venture, there are several things that are typically considered. In addition to credentials and solid medical practice experience and skills, a potential physician partner should be able to address an existing medical need in the community. Market research can help to determine which populations most need service and the type of care they generally require. It is also important that both sides of the partnership communicate clearly and understand what each are expected to contribute to the venture.

A for-profit facility will often enter into a hospital joint venture with a tax-exempt facility in order to save money or increase the pool of available physicians. Combining facilities and their resources can also boost their marketing power, medical offerings, and community reach more efficiently and effectively than the single entities. Known as whole hospital ventures, these partnerships can also increase the competitive edge and market share of all parties involved. For a struggling tax-exempt hospital, a joint venture can be a way to maintain some financial, strategic, and administrative control while increasing the availability of medical resources and available capital.

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