Solutions

The following three illustrations represent unique delivery of care challenges and subsequent use of CriterionHealthcare's AdvantageousOwnership approach in support of the hospitals' and the physicians' objectives.

On Campus Expansion | New Market | Existing Facility

On Campus Expansion

Delivery of Care Strategy:

In an effort to consolidate it's cardiology services on its main campus for greater patient access and convenience while at the same time preserving key physician practices on the main campus, a Community not-for-profit Hospital engaged CriterionHealthcare to evaluate the feasibility of several potential facility solutions.

Project Scope:

The ultimate solution was the development of a 120,000 SF facility which consists of multiple independent ownership entities, which includes a Cancer Center, a Cardiology Center, and 65,000 square feet of physician office space. The true benefit of this outcome was a highly integrated, operationally and aesthetically consistent addition on the main Hospital campus with significant cost and ownership advantages.

Financing Structure:

CriterionHealthcare's AdvantageousOwnership model was implemented, thus allowing physicians to own a significant portion of the facility. This allowed the physicians to receive all of the benefits of real estate ownership (depreciation, asset appreciation, and long term tax benefits) while the remainder of the facility was owned directly by the hospital.

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New Market

Delivery of Care Strategy:

Needing to establish a competitive presence in a new market, a not-for-profit hospital engaged CriterionHealthcare to evaluate and then present alternative capital options for facility development. Being the first time working with such models, or alternative capital for facility development, multiple administrative and Board level educational sessions were required. Parallel to this effort was the desire by the hospital's leadership to respond to the medical staff's desire for joint venture opportunities. Not overly enthusiastic about operational joint ventures, a real estate vehicle was of great interest to the Hospital, particularly with the ability to include a broad range of physicians. CriterionHealthcare engaged the medical staff in various educational forums to illustrate the fundamentals of such opportunities.

CriterionHealthcare's AdvantageousOwnership model was implemented for the project's comprehensive development. The new facility is owned by impassioned investors, the hospital (at their request) and over 20 physicians each investing between $10,000 to $100,000 each.

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Existing Facility

Delivery of Care Strategy:

Leasing their facility from a real estate investment trust (REIT), a single physician of this multi-physician group had a strong desire to receive the benefits of real estate ownership. CriterionHealthcare was engaged to develop a solution and ownership structure which allowed all of the physicians to purchase their facility back from the REIT.

Developer's firm specific role in the Project:

CriterionHealthcare was engaged to create a structure which allowed the physicians to purchase their building back from the REIT. With this ownership structure in place, CriterionHealthcare arranged the financing and negotiated the purchase of the asset from the REIT.

Financing Structure:

Working through numerous lunch meetings over the course of several months, CriterionHealthcare educated the Physicians on everything from lease rate calculations, valuations, capital gains, and non-recourse financing.

Once a unanimous vote occurred to proceed, CriterionHealthcare implemented the transaction and purchased the building for a new Physician Owned Limited Liability Corporation.