Hospital Equity

Just as quality medical care is important for the health of your patients, adequate hospital equity is important for the well-being of your organization. Equity allows hospitals to remain competitive in their markets by bringing needed services to the community, opening doors for potential growth opportunities, and increasing the value of the organization to both patients and investors.

Over the last decade, the healthcare industry has become increasingly volatile. Healthcare reform, economic downturns, continual regulatory changes, and lower reimbursement rates have left many not-for-profit organizations burdened with hospital debt and insufficient capital to invest in the infrastructure needed for quality care now and in the future.

LHP Hospital Group was founded for the purpose of creating joint ventures to aid in the recapitalization of not-for-profit hospitals and health systems. Our ultimate goal is to help these organizations achieve their goals for growth, quality, and financial viability while fully supporting the collective wisdom of local leaders in making decisions regarding the health and welfare of their own communities. In the typical joint ventures we oversee, LHP and its equity partner create a limited liability company to own and operate the joint venture hospital(s). Depending upon the goals of the not-for-profit partner, the joint venture hospital(s) could be:

  • An existing hospital(s) already owned by the partner that requires extensive capital resources,
  • A target acquisition within the partner’s service area, or even
  • A combination of the two, as in the case of a consolidation or where the partner chooses to make its equity contribution using assets rather than cash.

Shared hospital governance is the common element among all our joint ventures. We do not ask our partners who are contributing assets to a joint venture to give up control of those assets, nor do we seek to gain control of assets being acquired by the joint venture. In fact, provided that the not-for-profit partner is willing to maintain at least a 20% ownership interest in the joint venture, LHP is willing to share governance 50/50 with its not-for-profit partner.