Case Study
Transformed Physician Group Operating Model & Academic Affiliation Agreements
Mergers, Acquisitions & Growth
A private university in the northeast along with their medical school and academic faculty practice had an affiliation agreement with a hospital partner that presented strategic and financial challenges and restricted the ability of the medical school to meet its academic mission and its clinical practice to grow and meet the needs of the community.
As a result of these structural issues within the partnership, the University experienced financial challenges, requiring heavy subsidization of both the medical school and faculty practice. The partnership agreement required modifications to adapt to the needs of the medical school and its faculty.
BDC Advisors worked closely with the University leadership and governance to develop an academic affiliation structure that redefined the relationship between the hospital operator and the University. The updated agreements and change in financial structure addressed the necessary components of the relationship including quality, trademark, academic mission support, clinical program development, non-compete provisions, ground leases and joint mission activities in clinical care, research and education.
BDC worked directly with University senior leadership and governance to assess existing relationship issues and enact a comprehensive strategy for redefining the relationship. Over a multi-year period, BDC:
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Analyzed the current arrangement and identified major elements of the plan to be addressed
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Restructured the operational and ownership structure of the practice plan
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Supported a major financial improvement effort for the practice plan
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Developed a medical center (hospital and faculty) strategy to jointly serve the clinical market
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Created and supported execution of a new ownership model including termination of the original joint venture ownership of the hospital
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Established a new academic mission support agreement
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Developed expansion and modernization plans for the hospital, medical school and ambulatory faculty practice
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Supported development of updated quality and trademark agreements between the University and its hospital partner
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Provided subject matter advisors throughout the effort including legal counsel, valuations, governmental relations and communication
Over the course of the engagement, BDC collaborated with the leadership team to effectively engage the hospital partner and demonstrate the need to redefine their relationship in a way that supported the goals of each organization while positing both for success. This effort culminated in a successful equity divestiture from the pre-existing joint venture partnership and implementation of a revised operating model and academic affiliation agreement.
Ultimately, this allowed the university and academic faculty practice to improve their financial standing while working more collaboratively to achieve higher levels of performance.
MERGERS, ACQUISITIONS
& GROWTH
Anatomy of a Merger - Bringing Secular and Catholic Health Systems Together
Created An Innovative Delivery System to Support Rapid Growth
