Approximately 20 percent of surgery centers are currently in a relationship with a hospital, and the number is only expected to grow as ASCs seek higher reimbursement, capital for expansion and support for implementing changes through healthcare reform. Physician-owners should look into the joint-venture history of the hospital prior to partnering, says Jon Vick, president of ASCs Inc.
"The doctors should examine the experience of other physicians who have gone into joint ventures with the hospital," he says. Surgery center leadership should ask the following questions:
• Does the hospital have a track record of successful joint ventures with physicians?
• How many other joint ventures has the hospital done with physicians?
• Are the physicians in the hospital joint ventures happy?
• Have physician distributions increased in those joint ventures?
Unsuccessful joint ventures obviously raise a red flag, but Mr. Vick says a complete lack of joint ventures is also a troubling sign. "That would show that they have no experience," he says. "You don't want to be the guinea pig with a hospital that's never done a joint venture with a group of physicians." He says if the hospital has never pursued a joint venture before, the administration may have an ulterior motive — removing the surgery center as a competitor, for example.
Related Articles From ASCs Inc.:
Physician-Owned Surgery Center Seeks Strong Hospital Partner: 7 Factors to Consider Before Pursuing a Joint Venture
5 Points on Calculating Impact of Out-of-Network on Valuation Multiples
5 Steps Surgery Centers Should Take Before Selling to a Hospital
"The doctors should examine the experience of other physicians who have gone into joint ventures with the hospital," he says. Surgery center leadership should ask the following questions:
• Does the hospital have a track record of successful joint ventures with physicians?
• How many other joint ventures has the hospital done with physicians?
• Are the physicians in the hospital joint ventures happy?
• Have physician distributions increased in those joint ventures?
Unsuccessful joint ventures obviously raise a red flag, but Mr. Vick says a complete lack of joint ventures is also a troubling sign. "That would show that they have no experience," he says. "You don't want to be the guinea pig with a hospital that's never done a joint venture with a group of physicians." He says if the hospital has never pursued a joint venture before, the administration may have an ulterior motive — removing the surgery center as a competitor, for example.
Related Articles From ASCs Inc.:
Physician-Owned Surgery Center Seeks Strong Hospital Partner: 7 Factors to Consider Before Pursuing a Joint Venture
5 Points on Calculating Impact of Out-of-Network on Valuation Multiples
5 Steps Surgery Centers Should Take Before Selling to a Hospital