Providing capital for physician group practices: new opportunities for hospitals
Coddington, D.C.; Moore, K.D.; Clarke, R.L.
Healthcare Financial Management Journal of the Healthcare Financial Management Association 53(12): 44-50
1999
ISSN/ISBN: 0735-0732 PMID: 11066695 Document Number: 511239
As physician group practices grow and consolidate, they have an increasing interest in developing close capital partnerships to ensure access to capital. Yet as many healthcare organizations have sought to divest poorly performing acquired physician practices, physicians have seen their pool of potential capital partners shrink. Under these conditions, hospitals have a new opportunity to present themselves to physician group practices as attractive capital partners. To understand the nature of this opportunity, one needs to know why group practices seek capital, how groups approach their investment strategies, and what criteria they use to compare prospective capital partners. To build stronger relationships with physicians, hospitals should focus on turning around their poorly performing acquired physician practices and pursue strategies such as collaborating with physician practice management companies and developing new models for partnering with physicians (e.g., special purchase agreements and more advanced management services organizations).