Health Care Strategic Alliance Deals: The Practical Aspects

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A final practical consideration for the parties is to plan for the consequences of failure of the alliance or disputes among the participants. An important feature in an alliance is a minimum commitment from each participant to remain a party to the alliance to assess the relative success of the joint effort. For instance, improvements in quality measures or economies of scale may not be apparent for three years or more and permitting withdrawal by a participant within this three-year period may defeat promising efforts to achieve all of the parties’ objectives. The parties need to carefully define the circumstances under which a party may withdraw from the alliance and give consideration to an appropriate period for transition of care. In addition, if the alliance involves material consolidation of assets, the parties need to contemplate the terms of repatriation of assets as well as resolution of joint contractual obligations and financial implications such as repayment of debt.

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