Ownership models across the globe John Fox (Australia)
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Transcript of Ownership models across the globe John Fox (Australia)
• Day surgery centres/units – free standing or intra-hospital. Is there a preferred model?– Douglas McWhinnie (United Kingdom)
• Emergency operations in day surgery centres/units– Raafat Hannallah (United States of America)
• Day maternity units supported by maternity motels – is this an option?– Allison Carr (Australia)
• Outsourcing day care for public patients– Paul Jarrett (United Kingdom)
Ambulatory Surgery in the Future – Models and Controversies
Across the Globe - Ethiopia
• Standard unit for exchange was the “chicken”
• Surgeon • The assistant • The anaesthetist
– all got paid handsomely in terms of scrawny chickens.
Structural Models For Day Surgeries
• A day surgery facility within a hospital so that it essentially no distinction between the day surgery and an overnight stay patient.
• The day surgery as an attachment to a hospital or other facility where there is a cross-flow of patients and equipment and staff.
• The stand-alone unit• The stand-alone day surgery unit with associated hotel
accommodation • The stand-alone day surgery with an overnight stay
within the facility, the “extended” day surgery
Financial Models For Day Surgeries
Ownership
• Corporate entity funds and builds a facility– if there is a population – proceduralists – no competition
• Building facilities that are owned and run by the doctors themselves.
Financial Models For Day Surgeries
Ownership
• Corporate entities (US)
– Private Equity Investors (long haul)– Venture Capitalists (short term)– Specialist DS development corporations
Financial Models For Day Surgeries
Ownership
• Building facilities that are owned by the doctors
• Building facilities that are owned and run by the doctors themselves
The CHDS Model
• Business Entity
– Funds and runs the day to day DS activities
• Building Entity
– Funds the construction and maintenance
• The CHDS Model – Not a new idea– McHardy– Refined Articles
• Other Models
– Mismatching Of The Ownership Of The Two Companies
The strongest recommendation if you are going to set up a facility,
ownership is important and to match the shareholding in the company with the business.
To Build the Building
• To identify a group of like minded• Fund and buy the land• Articles of Association• To design the specific purpose facility• To fund the building – loans• To fund the fit out• Fund the holding costs (building phase)• Sustain the facility – startup phase
The Articles of Association
• Absolutely critical• In advance
and importantly
• the exit strategy has to be fair for all parties.
• experience from other facilities where an incorrect exit strategy
The Group
• Proceduralists• Cooperative• Team players• Avoid those who are non-cooperative• who won’t work at their own facility
• the team work approach does work• and after a very short while, in building terms,
the rents starts to pay the loans
Net Profit/(Loss) After Rent & Income Tax
(600,000)
(400,000)
(200,000)
-
200,000
400,000
600,000
2001
2002
2003
2004
2005
2006
2007
2008
Net Profit/(Loss)After Rent &Income Tax
Fees Billed
-1,000,0002,000,0003,000,0004,000,0005,000,0006,000,0007,000,0008,000,0009,000,000
2001
2002
2003
2004
2005
2006
2007
2008
Year
Fees Billed
INCOME CHDS (per annum)
Fees Billed
$8,068,095 in 2008
Rent + Outgoings Stream from CHDS to Cainlee
Total Rental + Outgoings
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2001
2002
2003
2004
2005
2006
2007
2008
Total Rental +Outgoings
$1,528,755
$ 1,208,002 Rent only
Combined Model2000 2008
Accumulated distribution $ 6,890,771
Paid to Shareholders
CHDS
CAINLEE
Income
$ 43,680,325
Accumulated Rent $ 9,255,941
CHDS Accumulated Profit
$ 714,302
Goes to pay the shareholder loans
Summary and Recommendations
• It is huge volume of hard work – Organisation– Structure, – Funding, – Design – A Significant Amount Time And Cost Impost
– Would I do it again in a “heartbeat”.
• Seek advise and because you can save yourself a lot of heartache getting the fundamentals right from the beginning.