Physician Hospital Integration: Equity-Based Joint Venture Analysis

This report examines the advantages and disadvantages of equity-based joint ventures within the context of physician hospital integration, an integrated business model. The paper defines equity-based joint ventures as collaborations between physicians and hospitals, where resources and responsibilities are shared. It highlights the benefits, such as increased profits, improved patient outcomes, enhanced communication, shared costs, and increased expertise. Conversely, the report acknowledges potential drawbacks, including conflicts due to lack of trust, unequal capital distribution, differing work patterns, communication challenges, and lack of commitment. The conclusion emphasizes that while equity-based joint ventures can be effective, the success of the model hinges on shared decision-making between physicians and hospitals to address potential disadvantages and maximize the benefits of cooperation in clinical treatment.

RUNNING HEAD: PHYSICIAN HOSPITAL INTEGRATION 0
2020
Physician Hospital Integration
Student’s details-

PHYSICIAN HOSPITAL INTEGRATION 1
Advantages and Disadvantages of Equity Based Joint
Venture as Integrated Business Model
Integrated business model is the chain or management system that accounts for the
defining of roles and tasks which are the main actors of the hospital. In this, structure of equity
based joint venture which is based on the business cooperation and focuses on the
complimentary relationships existing among physician and suppliers (Satiani & Vaccaro, 2010).
Here, the paper will discuss the advantages and disadvantages of equity-based model under the
integrated business model.
Equity-based joint venture is a new organization which is created by the physicians and
the hospital authority in which they share funds and other facilities. They have mutual
cooperation in the sharing of responsibilities and also share the profits. The advantages of these
joint ventures is that they tend to make the contribution not only in the profits but also in the
making of recruitments and making an increase in the hospital admissions. Also, one of the
advantages of these healthcare joint venture states that they can improve the patient outcomes
and also leads to the effective communication between the hospital and physicians (Caillouette,
2015). This sharing of roles and the responsibilities increases the level of cooperation and also
leads to the sharing of cost, revenue and governance which makes an addition to the medical
treatment. This financial partnership can be helpful in the avoidance of future challenges which
are relating to the critical decision making which can improve the customer satisfaction and
increasing the value of health services (Allen, 2017). Also, there is increased level of expertise
and increase the chances of sharing of risks. Also, this certainly increases the opportunities for
the business growth.
The disadvantages of equity joint venture include that there can be conflicts between the
parties due to lack of trust. Also, the partnerships can get affected by the unequal distribution of
capital and certain disagreements which can be harmful for the joint venture. Moreover, there
can be different working patterns of the physicians and the hospital authority which can create
the problem for the entire venture. Further, management of communication between the staff
members and the physicians can affect the entire joint venture and which can certainly impact
the understanding of different objectives. Also, lack of commitment of any of the parties can

PHYSICIAN HOSPITAL INTEGRATION 2
have an impact on the joint venture (Hernandez, 2017). Moreover, formation of joint venture
under the healthcare setting can have an impact on the partnership in which unequal contribution
of any of the parties can lead to failing of the joint venture. Besides, inability to make a balance
between the expertise and knowledge can also lead to the disadvantage for the joint venture.
Conclusively, it can be said that equity based joint venture can be the effective model of
physician integration. This brings the cooperation between the parties and also, this can increase
the possibility of effective clinical treatment. There are advantages of this structure and as well
as disadvantages which can be addressed through the shared decision making of the physicians
and hospital.

PHYSICIAN HOSPITAL INTEGRATION 3
References
Allen, P. (2017). Strategic Partnering to Gain Competencies for Future Healthcare Delivery.
Frontiers of health services management, 34(1), 41-47.
Caillouette, J. (2015). Practical tips for implementing bundled payments in your practice: Hoag
Orthopedic Institute–a joint venture model for value-based care delivery. The Journal of
arthroplasty, 30(3), 351-352.
Hernandez, N. (2017, May 24). Pros and Cons of Medical Practice Joint Ventures. Retrieved
March 29, 2020, from Physician Practice: https://www.physicianspractice.com/blog/pros-
and-cons-medical-practice-joint-ventures
Satiani, B., & Vaccaro, P. (2010). A critical appraisal of physician-hospital integration models.
Journal of Vascular Surgery, 51(4), 1046–1053.