By Mary K. Totten and Pamela R. Knecht
In today’s health care environment, the need for collaboration has perhaps never been stronger, with hospitals and health systems pursuing partnerships in a number of ways, including alliances, networks, affiliations and, at times, full mergers and acquisitions. In both the for-profit and nonprofit sectors, one form of collaboration — joint ventures — has long been viewed as a sound strategy for achieving multiple objectives.
Joint ventures can take many forms. In health care, these can include whole hospital joint ventures, where a for-profit partner holds a 50 percent or greater interest in the venture and operates the hospital. Here, however, we will focus more narrowly on joint ventures that are devoted to a specific type of business or service and that are a separate legal corporation with multiple owners that each contribute resources and share governance through a board or other structure with fiduciary responsibility. These more traditional health care joint ventures, many of which are now maturing, offer insights into success factors for collaboration and suggest opportunities for improving joint venture performance through improved governance.