At the 11th Annual Spine, Orthopedic & Pain-Management Driven ASC Conference in Chicago on June 15, Helen Suh, JD, and Scott Becker, JD, both attorneys at law firm McGuireWoods, clarified six reasons ASC joint ventures fail.
1. When the hospital has joined defensively. “When a physician group forces a hospital into a joint venture with a threat of forming their own surgery center, then the hospital really isn’t going to be helpful” or make a beneficial partner for the physician group, said Mr. Becker.
2. When the hospital does not help with managed care. “Hospitals face strong incentives to keep surgeries at the hospital” rather than let them be performed at the surgery center, said Mr. Becker. Joint ventures then tend to not work when a hospital prioritizes retaining as many cases as possible over facilitating managed care, he said.
3. When the hospital is passive aggressive about physician recruitment. Even when the two entities are in a joint venture, hospitals and surgery centers will often want to recruit the same physicians. “We see this constantly,” said Mr. Becker. Competition between the two can lead to a strained joint venture relationship, he said.
4. When physicians whine or bicker. Mr. Becker said that conflict within the partnering physician group can hurt the joint venture. He cited examples where the physicians spent a significant amount of time arguing about each physician’s caseload versus their percent ownership in the venture to the detriment of the venture itself. “It’s critical to have harmony” among the physicians, he said.
5. When the venture is in a poor reimbursement market. “You can have great physicians, a great hospital and administrators,” said Mr. Becker, “but if you’re in a market like deep in south Florida or in certain parts of Maryland, you can be a brilliant organization but still find it hard to make money.”
6. When there is weak physician leadership. The most important aspect of a joint venture with a hospital is the physician leadership at the ASC, said Mr. Becker. Each physician group must have a leader who is willing to put in extra effort to make the joint venture work, without extra compensation. “They have to be in constant communication with hospital executives” and constantly working to make the venture successful, he said. “It really takes leadership like that.”
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1. When the hospital has joined defensively. “When a physician group forces a hospital into a joint venture with a threat of forming their own surgery center, then the hospital really isn’t going to be helpful” or make a beneficial partner for the physician group, said Mr. Becker.
2. When the hospital does not help with managed care. “Hospitals face strong incentives to keep surgeries at the hospital” rather than let them be performed at the surgery center, said Mr. Becker. Joint ventures then tend to not work when a hospital prioritizes retaining as many cases as possible over facilitating managed care, he said.
3. When the hospital is passive aggressive about physician recruitment. Even when the two entities are in a joint venture, hospitals and surgery centers will often want to recruit the same physicians. “We see this constantly,” said Mr. Becker. Competition between the two can lead to a strained joint venture relationship, he said.
4. When physicians whine or bicker. Mr. Becker said that conflict within the partnering physician group can hurt the joint venture. He cited examples where the physicians spent a significant amount of time arguing about each physician’s caseload versus their percent ownership in the venture to the detriment of the venture itself. “It’s critical to have harmony” among the physicians, he said.
5. When the venture is in a poor reimbursement market. “You can have great physicians, a great hospital and administrators,” said Mr. Becker, “but if you’re in a market like deep in south Florida or in certain parts of Maryland, you can be a brilliant organization but still find it hard to make money.”
6. When there is weak physician leadership. The most important aspect of a joint venture with a hospital is the physician leadership at the ASC, said Mr. Becker. Each physician group must have a leader who is willing to put in extra effort to make the joint venture work, without extra compensation. “They have to be in constant communication with hospital executives” and constantly working to make the venture successful, he said. “It really takes leadership like that.”