Quick: Who’s the President of Switzerland?
Medical group organizers generally confine their entity’s business structure to a corporate or partnership type entity and then proceed to conduct business through it. That single entity is the competitor. It often competes within the confines of one’s medical specialty.
But there are other ways of structuring medical group business arrangements and Switzerland provides an important thinking tool.
So, back to the President of Switzerland. Don’t know who she is? It’s probably no big deal because the President of Switzerland is neither the head of government nor the head of state. Her function is to break the tie vote of an odd-numbered panel. (Think about it.)
Switzerland is a federation of self-governing cantons, whose representatives together form a collective governing body.
This leads us to a Swiss business structure that mirrors this notion of independent entities holding themselves out to the world as unified: the “verein.”
A verein is a confederation-type entity, like a partnership but also very unlike a partnership.
In a partnership, the partners conduct a unified business, with each partner having joint and several liabilities. In other words, Partner “X” is liable for the obligations of the partnership even if those obligations were incurred by Partner “Z.”
In a verein, however, although the overall organization itself presents a unified structure to the outside world, for example, “Medical Associates of the United States,” each of the members is an independent business entity and is not liable for the overall organization’s debts. And, in a similar fashion, no member is liable for the debts of any other member.
Therefore, a fictitious “Medical Associates of Canton, NY” is not liable for the debts of “Medical Associates” nor for the debts of another member, say, “Medical Associates of Canton, MA.”
The point of this isn’t that you should reorganize your medical group by filing in Switzerland as a verein; rather, it’s that there are more conceivable forms for entity organization than simply partnership or corporation. Alliance type structures in healthcare come with a set of unique compliance and business issues, from anti-kickback to Stark to contracting. But with the correct strategy and structuring they present a world of opportunity, whether within a single specialty or, perhaps more interestingly, among multiple specialties and, across the bounds of professional services and facilities.
