Joint venture practice
Best for: Dermatologists looking to collaborate closely with other physicians to share resources, increase buying power, and unify patient care under a jointly owned entity.
Quick summary: Partner with other practices as co-owners to streamline operations, negotiate contracts together, and present a seamless patient experience while sharing profits and risks. Ideal for those seeking growth and operational alignment without fully merging practices.
Joint venture overview
A joint venture is a collaborative business arrangement where two or more practices come together as shareholders in a new entity or contract to achieve mutual goals. Unlike a full merger, each party retains its own legal identity while sharing profits, risks, and operations to appear as a unified entity to patients and payers. Joint ventures can take the form of equity-based partnerships or contractual agreements, often structured around shared services or business growth strategies.
Why dermatologists choose this
Opportunity to expand services or grow practice reach with shared capital.
Increased negotiating power with suppliers and insurance payers.
Shared financial risk helps mitigate individual exposure during scaling or expansion.
Structure offers more flexibility than a full merger while presenting unified care to patients.
How this model works
Structure
Practices join together as co-owners in a new entity or contractual arrangement. Legal structure varies (such as LLC, corporation, etc.).
Reimbursement model
Depends on structure. Practices may bill independently or through a new shared entity. Joint ventures can improve payer contracting leverage, but reimbursement must be clearly defined in legal agreements.
Patient care model
Although each physician remains independent, operations and branding are unified. Patients experience care as if it comes from one integrated group.
Administrative support
Shared governance, protocols, and business systems are typically developed to ensure consistency in care and operations. Practices are expected to coordinate payer contracts and operational standards.
Compensation and benefits
Compensation depends on each partner’s equity or contractual agreement, and may reflect profit sharing, revenue distribution, or capital investment. Benefits can include access to ancillary service revenue, expansion funding, and operational efficiencies, though initial setup may be resource-intensive.
Technology and operations
Practices may unify under shared EHRs, billing systems, or scheduling platforms to streamline care and present as one integrated group.
Legal considerations
Establish clear agreements on roles, profit-sharing, and termination clauses. Ensure proper documentation with legal review to address antitrust or compliance issues.
Career growth
Physicians can gain experience in governance, strategy, and business development, particularly in managing the joint venture’s growth or specialty offerings.
When this model makes sense
For practices seeking capital to expand or launch new services.
When individual practices want to retain ownership but present a unified brand.
If shared purchasing power, payer negotiation, or ancillary services are a priority.
Best suited for groups aligned on business strategy and patient care standards.
Success factors
Develop a strong governance structure with clear responsibilities and dispute resolution plans.
Ensure shared clinical standards and insurance alignment across all partner physicians.
Have a well-defined legal agreement and business plan from the outset.
Select joint venture partners with compatible values, goals, and patient care philosophies.
Potential challenges
Takes time and legal effort to set up.
Possible conflicts of interest, especially when working with insurance companies or health care organizations.
Requires strong leadership and mutual trust among partners.
Disputes over governance, profit-sharing, or care standards can impact success.
Antitrust risks should be assessed by a health care attorney.
Early career advice
Clarify legal structure and governance model before committing.
Ask about dispute-resolution processes and exit clauses.
Align on payer contracts and standardization of care.
Choose this model if you’re looking to scale or diversify while maintaining ownership.
Related AAD resources
Practice types: See our full menu of resources on practice types, from solo to institutional.
Get started: Access our guide to getting started in practice, with resources on practice types and policies and procedures.
Employment guide: See all our resources on contracts, questions for employers, and more.
This content was created with the particular needs of early-career dermatologists in mind. See the rest of our Career Launch resources for young physicians.
