The Healthcare Partnership Midrange

Christopher Cheney, February 15, 2016

The middle ground of the healthcare partnership continuum is dotted with a variety of relationships that feature varying degrees of shared governance.

This article first appeared in the January/February 2016 issue of HealthLeaders magazine.

Slavitt

Mark Schafer, MD

The extremes of the healthcare partnership continuum are well-known and well-traveled: Narrowly focused clinical affiliations such as service contracts between hospitals and laboratories at one extreme, with mergers and acquisitions at the opposite extreme.

The middle ground of the healthcare partnership continuum is dotted with a variety of relationships that feature varying degrees of shared governance, including joint ventures, accountable care organizations, and integrated network pacts between health systems and hospitals that nearly match the intimacy of mergers and acquisitions.

Fountain Valley, California–based MemorialCare Health System, a system with 1,546 licensed beds across six hospitals and $1.9 billion in total revenue, is banking on joint ventures to help the organization maintain service revenue as medical procedures shift to outpatient settings, says Mark Schafer, MD, CEO of MemorialCare Medical Foundation, the system's physician group division that has more than 2,000 employed and affiliated physicians.

Through a joint venture established in February 2013 between the foundation and Deerfield, Illinois–based Surgical Care Affiliates, MemorialCare is operating eight ambulatory surgery centers with plans to open as many as three more. The health system also is seeking joint venture partners to split ownership of the organization's 10 imaging centers, Schafer says.

MemorialCare holds 51% ownership of the ambulatory surgery center joint venture with SCA. The joint venture consists of the newly formed surgery center company, Beach Surgical Holdings LLC, which, in turn, owns 51% of the surgical center assets. The remaining 49% of the surgical center ownership includes more than four dozen physicians. MemorialCare also wants to hold 51% ownership of the imaging centers, Schafer says.

Christopher Cheney

Christopher Cheney is the senior finance editor at HealthLeaders Media.

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