Innovation: Providing Capital To Those Who Have None

With the growing regulations around joint ventures in diagnostic imaging (read: hospitals not currently allowed to joint venture diagnostics with physicians) and other technologies - there has been a rise in companies willing to facilitate “under-arrangements” with both hospital and physicians.

Here’s how it works:

1) A technology financing company, such as Accelitech (a newly formed company that has regrouped some of the top leadership from Neurosource) forms a “leasing company” that goes out and buys the technology of choice (in the case of Accelitech, steriotactic radiosurgery technology – such as the CyberKnife – has been a popular choice).
2) Hospitals and physicians are then allowed to buy into the “leasing company” at 10-15% each.
3) The leasing company than works out a deal with the hospital to lease the machine on a “per use” or “per click” basis.

Why do it:
1) The hospital can get the latest and greatest technology without putting up $4-5 million in capital.
2) Physicians get an opportunity to gain access to new technology and can financially participate in the long-term returns of the leasing arrangement
3) The purchase is off-balance sheet – not adversely affecting bond ratings.

For sure there will be increased scrutiny of these deals as time goes on, but certainly worth looking at if your capital starved and want to stay competitive in your marketplace.

Also…my apologies for the extended absence. I’ve experienced a perfect storm the last couple of weeks and unfortunately had to forego some of my regular blogging time.