Nonprofits Weigh Benefits of Buyer Joint Ventures

A prime example of a BJV would be the partnership that was finalized in September when Duke LifePoint Healthcare acquired Marquette General Health System, a regional referral system that serves a 15-county region in Michigan's Upper Peninsula.

"Conceptually it's very simple," Burgdorfer says. "It's a way for for-profit hospital companies and non-for-profit companies who have historically been at odds with each other to work together and own hospitals together either buying building them buying them or jointly throwing a bunch of hospitals that they own independently into a commonly owned group."

"My own personal view is that buyer joint ventures could be a harbinger of that change in that for-profit companies and 501(c)3s really are the agents of change in the hospital industry. As they begin to work together maybe that is the beginning of the end of the difference between for-profit and not-for-profit. But that is 20 years away."

Burgdorfer says keying on the technical and legal details of BJVs is not as important as understanding how the arrangements "represent a fundamentally new way for former foes, nonprofits versus for-profits, to work together in owning things; not just to work together or affiliating but owning things together. That is where their enormous importance in the future lies. That is the fundamental change."

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