Business Planning and Joint Venture Development for an Ambulatory Surgery Center
Client/Profile
A mid-Atlantic community hospital that is part of a health system
Challenge/Situation
To plan for and create a joint venture ownership structure for a freestanding ambulatory surgery center that the client was in the process of acquiring. Special challenges of the process included the need to re-license the surgery center, which had not been operational for a year and had relinquished its license. In addition, financial projections were complicated by delays in the acquisition process, which endangered physician support and made physician participation potential a delicate issue.
Process
Veralon performed preliminary analyses to evaluate the proposed joint venture’s financial feasibility. We conducted a series of presentations for the general physician community on the joint venture’s financial potential, structural alternatives and on development and operational issues. A physician steering committee was formed to work with hospital management in the development and structuring of the joint venture ownership entity.
Veralon facilitated regular steering committee meetings to explore potential physician participation opportunities, joint venture structural elements, and ASC licensure, startup and ongoing management. We also produced periodic newsletters to the physician community designed to inform and to maintain project momentum. Ultimately, the terms of the joint venture operating agreement and related offering were negotiated, and hospital management distributed the private offering memorandum. Veralon further supported this process through production of a business plan to assist hospital management in obtaining necessary health system approvals for the joint venture.
Results
The offering proved successful, and the joint ventured surgery center is now licensed and operational with promising physician participation and support.