To stay competitive in today’s evolving healthcare market, medical practices of all sizes need to stay on the lookout for smart opportunities to broaden their business potential. What growth avenues is your group pursuing?
If the answer is ‘none,’ you should shift your priorities ASAP – and you should perhaps consider how forming a joint venture with another organization could help you achieve stronger revenue outcomes long-term.Why Pursue a JV?With the right strategy behind them, joint ventures can provide highly beneficial growth opportunities to medical practices. But determining whether your organization should seek out a joint venture depends on your long-term goals.
Start by considering what you see in your practice’s future (say, five years out or more). What would you like to see different? Whether it’s simply a larger patient base or something more significant – an expanded array of specialties, a greater variety of ancillary services, a newer office space, a more sophisticated marketing strategy, or otherwise – you should spend time thinking about whether a new business relationship can help you achieve that.
A joint venture is one such relationship. In a typical JV, two organizations with similar or complementary objectives come together to pool their resources in pursuit of a defined goal (or a shared long-term business strategy).
A joint venture can be a smart way to leverage another organization’s expertise, specialties, relationships, or other capacities to enhance your own. Shy of a partnership, it is a formal legal relationship – so while it carries some level of risk, it doesn’t have to represent a fundamental change to your overall business structure.Best Practices for Success
That said, entering into any legal relationship with another business entity demands strong due diligence and smart strategic planning. Whether you pursue a JV with a colleague organization you know well, or a reputable third party you encountered more recently, you should place strong governance behind the arrangement and solicit assistance from experienced consultants to ensure you enter the relationship with firm guidelines around all tax considerations, legal liabilities, and termination procedures.
You should also lay out all associated tasks and responsibilities of the engagement in a contract or binding agreement, including:
- The purpose of the joint venture
- Specific objectives or goals of the venture
- The resources dedicated to the venture by the parties involved
- The specific responsibilities of each entity
- The control mechanisms in place
- The revenue- or cost-sharing specifications defined
Keep in mind to that, just as your relationship with your medical billing service has a clear impact on the day-to-day management of your medical practice, so too will your new joint venture. So be certain (well before crafting any legal agreements) that the new entity you choose to work with offers a strong cultural fit with your organization in addition to a strong growth fit. With the right combination of strong cultural and strategic alignment, both of your organizations will have the best chance of benefitting from the relationship long-term.
...and if you need help from a medical billing company...