Nonprofits Weigh Benefits of Buyer Joint Ventures
The growing number of joint ventures and mergers between non-profit and for-profit hospitals may signal a warming trend in longstanding frigid relations as the rival sectors come to recognize the merits of working together in an evolving healthcare environment.
At least, that's the opinion of James E. Burgdorfer, a principal at Juniper Advisory LLC,the privately held, Chicago-based investment banking firm that provides merger and acquisition advice for nonprofit hospitals.
"A significant and growing minority of hospital leaders are taking the view that it might be inevitable that nonprofit status for hospitals could at some point in the future go away," Burgdorfer says.
"There are two reasons for that. One is that there are more attacks being made by counties and cities and states against tax exemption around the country. As more cities and counties are in desperate need of money they are going to go after nonprofits more and more."
"And number 2, there is a general feeling that with the passage of the [Patient Protection and] Affordable Care Act and the Supreme Court's ruling upholding it that down the road sometime there isn't going to be much charity care because everybody is going to have insurance. The thought is starting to register that maybe the charitable care exemption is going to go away."
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