March 18, 2021
Joint venture relationships between private equity funds and hospitals present great opportunities for successful expansion for both parties. These relationships develop out of the distinct but complementary business objectives of private equity funds and hospital systems. While certain risks are attendant to the joint ventures, a number of business lines and strategic models have developed as ripe for joint venture investment.
What is the hospital seeking from the joint venture relationship?
What is the private equity fund seeking from the joint venture relationship?
What risks are inherent in partnerships between private equity funds and hospital systems?
Given these objectives and risks, what types of businesses lend themselves to hospital joint ventures?
What types of forms do these joint ventures take?
Hospital joint ventures will likely continue to grow in prevalence in the years to come. The opportunities for scale, the advantages in value-based contracting as well as the increasing willingness of health systems to entertain the relationships are too transformational for any other answer.