A large community health system and a local independent physician group sought affiliation through a joint venture to provide better access and care for cancer patients but encountered roadblocks in finding agreement on affiliation structure specifics.
Situation
In a fragmented oncology landscape, a large health system and an independent medical group sought a joint venture to expand oncology services and develop a value–based care strategy. The health system and the physician group recognized the need to develop a service line structure to support a multi-disciplinary approach to cancer care. Both entities recognized the benefits associated with establishing a service line structure and positioning the program to transition to value-based care models. This context set the stage for a transformative partnership.
Solution
To bridge gaps and build a sustainable collaboration, the parties retained VMG Health to facilitate the partnership process. Acting as a strategic advisor, VMG Health employed a multi-pronged approach:
- Black Box Analysis: An in-depth assessment of operations, finances, and growth potential, identifying synergies between the two parties
- Member Interest Evaluation: Stakeholder engagement to align incentives and interests, fostering trust and clarity in the negotiation process
- Post-Transaction Competitiveness: Guidance on income distribution models to ensure competitiveness and sustainability for the integrated entity
- Governance Structure: A clear governance framework design to ensure balanced decision-making and accountability
- Integration Framework: Put-and-call system development, enabling future integration opportunities paving the way for deeper collaboration and service expansion
This comprehensive strategy positioned the partnership for both immediate operational improvements and long-term scalability.
Success
The health system successfully took a minority interest in the independent oncology practice. This structure allowed both parties to maintain autonomy while leveraging shared resources and expertise. With this alignment, the collaboration was poised to evolve into a higher-functioning, institutional model—ensuring seamless service delivery and improved patient access. The parties identified an opportunity to develop a network-based solution to improve the total cost of care and are actively working to implement a value–based arrangement. The partnership gained a strong foundation to approach payers as a value-based enterprise, better equipped to negotiate contracts and innovate care models. By integrating radiation oncology assets, the joint venture expanded its footprint and enhanced its capability to deliver comprehensive oncology care. Ultimately, this affiliation exemplifies how strategic partnerships can transform care delivery, set the stage for growth, and address the pressing need for value-based care in a competitive healthcare landscape.
