Sometimes, collaborating with another business that is able to plug the gap can be the way forward, giving you credibility as you move into a new area.
When engaging independent physician practices in strategic planning as well as succession planning, the topic of joint ventures sometime emerges. You might have a killer idea, but lack the resources, finance or specific knowledge skillset to deliver it. With the strong competitive forces in many areas, physicians sometimes contemplate a joint venture with another organization such as a hospital as a means to protect their practice without selling out entirely. Sometimes, collaborating with another business that is able to plug the gap can be the way forward, giving you credibility as you move into a new area.
There are of course many details to study when beginning to think about such an endeavor. Joint ventures are complex relationships and take many different forms. They also need careful planning to make them work. Moreover, the challenges and opportunities are unique to each market so you must not view a potential joint venture through the lens of what may be occurring elsewhere. Broadly speaking though, there are some advantages and disadvantages to consider when weighing the prospect of entering into a joint venture with another entity.
There can be significant advantages in creating a joint venture.Some benefits include:
There can be, however, some pitfalls of entering into a joint venture.Some disadvantages include:
Forming a joint venture with another healthcare organization may be seen as a plausible solution. The success of a joint venture though, highly depends on thorough research and analysis of the objectives. There really is no such thing as an equal involvement and a variety of management structures is possible. Because different entities are working together, there is a great imbalance of expertise, assets, and investment.
Nick Hernandez, MBA, FACHE, is Founder & CEO at ABISA, LLC