Strategic Partnerships in Healthcare: Physician Owned Hospitals & Not-for-Profit Health System
The market has demonstrated there is significant strategic value in partnering with physician-owned and led organizations. Approximately 20% of all physician- owned acute care / specialty hospitals have partnered with a not-for-profit health system. An additional 30% of physician-owned hospitals have partnered with a for-profit corporate operator (e.g., Surgery Partners, USPI, SCA). These partnerships allow for alignment with independent physicians that may otherwise have been resistant to other arrangements, such as full employment with a local health system.
There are approximately 120-130 surgical / acute care hospitals that have some physician ownership, and of those, just over half are truly independent. The remaining hospitals are involved in a joint venture partnership with a local health system, a corporate operator (e.g., Surgery Partners, USPI, SCA, MFC), or both. These transactions often take the form of a partial acquisition that ultimately creates a joint venture. This allows for retiring physicians to realize liquidity at a higher valuation while providing an opportunity for young partner physicians to continue to participate as leaders within the organization and maintain or increase ownership.
Looking for a more in-depth analysis of healthcare and life science industry markets?
If you are interested in discussing the current state of the M&A and capital markets within the Healthcare and Life Science market, please contact us using the form provided below. We welcome the opportunity to learn how we can assist you in navigating today’s dynamic M&A environment and to help you maximize your strategic objectives. Our healthcare and life science investment banking team has deep understanding of the strategic, financial, and operational factors impacting middle market companies and has a long track record of success in representing companies in M&A advisory.