Keck Medicine’s CFO Chris Allen told Becker’s during a CFO+Revenue Cycle Podcast episode that the system recently launched a new ventures corporation aimed at focusing on joint ventures and off-campus partnerships.
The system comprises Los Angeles-based Keck Hospital of USC, Los Angeles-based USC Norris Comprehensive Cancer Center, Glendale, Calif.-based USC Verdugo Hills Hospital and USC Arcadia (Calif.) Hospital, which the system acquired in July 2022.
Mr. Allen said it’s oftentimes a stronger option to acquire versus build a new hospital due to high costs, particularly in areas like Los Angeles.
“Buying or partnering with your community hospitals, bringing them into your academic health system is the way to grow,” he said. “I think the [hospital] build that used to happen, maybe 10 or 15 years ago, that everybody was doing is no longer economically viable. Today, [mergers and acquisitions] is the way to do that and still make it affordable.”
When looking for a strong partnership or collaboration, Mr. Allen said it’s important to zone in on the vision and mission.
“You have to find a partner that you can really work with from the standpoint of, are you moving in the same direction strategically? Do you have a business model that aligns? If your business model and your operating model don’t work well together, it’s really going to be hard for you to have a relationship that works well together.”
Looking toward the future, Keck Medicine of USC is opening a 100,000-square-foot, off-campus multi-office building this fall that will comprise an ASC, imaging center, radiation therapy and infusion services.
Mr. Allen said the system is also looking at around two or three other joint-venture opportunities, one or two ASC acquisition opportunities and one or two M&A opportunities over the span of 12 to 18 months.
“That M&A and [joint venture] growth for us is where we’re looking, and it is really about creating capacity for us,” Mr. Allen said.