Avoiding Problems in Hospital-Physician Joint Ventures
Article Abstract:
Freestanding physician's office buildings (POBs) providing attractive rent for physicians and can be beneficial in supporting positive relations between a physician and the hospital. Besides keeping physicians nearby, POBs also serve as a lower-cost, convenient alternative to providing certain services in-hospital. Lately, such POBs have been viewed as a real estate investment by financial managers. Nonprofit hospitals cannot use tax deductions, however, physicians can. With a hospital-physician joint venture, the hospital benefits by keeping the physician and the tax benefits can be distributed among those who need them. With the physicians as investors, they are motivated not only to locate their offices there, but to attract others. The hospital benefits by less cash outlay and greater return. Other joint ventures in medical equipment or services are also possibilities. The hospital must take care that the joint venture does not jeopardize its tax exempt status. The Internal Revenue Service (IRS) has, so far, concluded that POBs are consistent with tax exempt purposes. Other concerns are the fraud and abuse provisions of the Medicare and Medicaid laws. To avoid problems, the hospital needs to avoid raising issues of referrals in negotiations with physicians. The hospital must take steps to maintain independence from its medical staff members. The financial relationships must stand on their own, separate from hospital issues. Then if action needs to be taken on a hospital issue, the hospital needs to be free to act.
Publication Name: Healthcare Financial Management
Subject: Health care industry
ISSN: 0735-0732
Year: 1984
User Contributions:
Comment about this article or add new information about this topic:
Transferring Funds during Corporate Restructuring. What Are the Consequences?
Article Abstract:
Numerous hospitals nationwide, are in the process of re-arranging programs into legal corporations to avoid regulation restraints. The revenue significance of making a decision for the transfer of hospital funds to be used for corporation capitalization must be considered. The chief concern associated with such a fund transfer is the potential for penalties inherent in certain practices. There are three sources for the application of funds: depreciation, operating funds and gifts, and differing transference methods - such as loans, stock purchases and gifts. The outcome of each choice should be assessed and losses balanced against all goals accomplished through corporate recasting.
Publication Name: Healthcare Financial Management
Subject: Health care industry
ISSN: 0735-0732
Year: 1984
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: Pricing medical services in the managed care environment. Promoting and measuring productivity in the HMO
- Abstracts: Changes in occipital capillary perfusion pressures during coronary artery bypass graft surgery
- Abstracts: Ten Hospitals Forge New Directions and Strategies. Advance Refunding: A Technique for Hospitals to Maintain Their Competitive Edge
- Abstracts: Hospitals and Business: A Viable Partnership for Innovation in Healthcare Delivery. The Need for Professional Administrators in Rural Hospitals
- Abstracts: Assessing the Market for Long-Term Care Services. Contracting Management Services - Options under PRM 2135. How States Pay for Long-Term Care Facility Services under Medicaid