Partnership/Joint Venture with a Hospital System. What model works?

Apr 8, 2020
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A hospital system in my area (Mid-Atlantic Region) has been expanding and I am interested in forming a joint venture/partnership with them to render pain services at their institutions. They just built one new hospital, purchased another hospital, and are in the process of buying an academic hospital in the future. These hospitals do not have pain services. The hospital system is receptive to partnerships and I am trying to avoid being locked into an employee model (flat salary+RVU bonus, 0 overhead).

My desires are the following:
1) Receive referrals from their hospital's physician group (without Stark violations)
2) Have control of care (staffing, procedures performed same day if needed)
3) Have the ability to higher physicians as the practice grows and collect/invest small percentage their revenue
4) Equity ownership of office or ASC
5) Have exclusive for pain services at their hospitals (if we conduct cases there)

I have the following question:
1) What model works best for pain physicians establishing a partnership with a hospital?
 
Nov 21, 1998
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Over the rainbow
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A hospital system in my area (Mid-Atlantic Region) has been expanding and I am interested in forming a joint venture/partnership with them to render pain services at their institutions. They just built one new hospital, purchased another hospital, and are in the process of buying an academic hospital in the future. These hospitals do not have pain services. The hospital system is receptive to partnerships and I am trying to avoid being locked into an employee model (flat salary+RVU bonus, 0 overhead).

My desires are the following:
1) Receive referrals from their hospital's physician group (without Stark violations)
2) Have control of care (staffing, procedures performed same day if needed)
3) Have the ability to higher physicians as the practice grows and collect/invest small percentage their revenue
4) Equity ownership of office or ASC
5) Have exclusive for pain services at their hospitals (if we conduct cases there)

I have the following question:
1) What model works best for pain physicians establishing a partnership with a hospital?

Always bargain from the "top-line revenue" not the bottom line. Don't get suckered into the RVU gambit.

What I mean by that is first agree with them about what your "enterprise value" is to them. That is, the total dollars you're bringing in the door through all activities. Don't initiate or engage in any further discussion with them until you both agree on what your enterprise value is. They are going to always try to bring you back to the bottom line--how expensive it is to run a hospital, how much they've got to pay for staff, etc. You tell them to STFU when they start down that road. When they go low, you go high. Your enterprise value is much, much, much higher than you think and that is the true size of the pie. That's where you want to START discussions.

Next steps...Let's say you do AGREE on your enterprise value. The hiring manager or CEO says, "Yeah, you're right. We've run the numbers. A busy pain-Baller like you is going to bring $10M through the door in $O$, imaging, facility fees, labs, PT, psych, ancillaries, etc. CLAIM THAT VALUE.

Now, with that value in mind (I'm a $10M Dollar Baller), you need to arrive on how "to share the pie." This is where they're going to whip out every Jedi Mind Trick in the book ("Oh, Stark! Oh, Kickbacks!", "Oh, we need to be %tile of MGMA, Oh, the sky is falling!") Don't go for it. You need to keep saying to yourself and signaling, "I'm a $10M Dollar Baller, Boitch! Share the pie!" It's not YOUR problem to fix THEIR regulatory/compliance issues. It's your problem to make sure that you're getting a fair piece of the pie.
 
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May 9, 2020
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Always bargain from the "top-line revenue" not the bottom line. Don't get suckered into the RVU gambit.

What I mean by that is first agree with them about what your "enterprise value" is to them. That is, the total dollars you're bringing in the door through all activities. Don't initiate or engage in any further discussion with them until you both agree on what your enterprise value is. They are going to always try to bring you back to the bottom line--how expensive it is to run a hospital, how much they've got to pay for staff, etc. You tell them to STFU when they start down that road. When they go low, you go high. Your enterprise value is much, much, much higher than you think and that is the true size of the pie. That's where you want to START discussions.

Next steps...Let's say you do AGREE on your enterprise value. The hiring manager or CEO says, "Yeah, you're right. We've run the numbers. A busy pain-Baller like you is going to bring $10M through the door in $O$, imaging, facility fees, labs, PT, psych, ancillaries, etc. CLAIM THAT VALUE.

Now, with that value in mind (I'm a $10M Dollar Baller), you need to arrive on how "to share the pie." This is where they're going to whip out every Jedi Mind Trick in the book ("Oh, Stark! Oh, Kickbacks!", "Oh, we need to be %tile of MGMA, Oh, the sky is falling!") Don't go for it. You need to keep saying to yourself and signaling, "I'm a $10M Dollar Baller, Boitch! Share the pie!" It's not YOUR problem to fix THEIR regulatory/compliance issues. It's your problem to make sure that you're getting a fair piece of the pie.

A foot in the door and to test the waters might be starting with a co-management agreement between your practice and the health system to build and establish a pain program. I’m not sure your state but if there are certificate of need required, expect a new ASC to take years to get off the ground. Do you practice at other health systems as well? The hospital may ask you to reciprocate the exclusivity. Depending on the amount of money involved, the health system may need to get a third party opinion on the structure which will include some compliance guardrails that cannot be waived or ignored by a non-profit health system.
 
Apr 8, 2020
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A foot in the door and to test the waters might be starting with a co-management agreement between your practice and the health system to build and establish a pain program. I’m not sure your state but if there are certificate of need required, expect a new ASC to take years to get off the ground. Do you practice at other health systems as well? The hospital may ask you to reciprocate the exclusivity. Depending on the amount of money involved, the health system may need to get a third party opinion on the structure which will include some compliance guardrails that cannot be waived or ignored by a non-profit health system.

AdminPatient what would be a good co-management agreement between the health system and pain physician look like?
 
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