Strategic Redesign of Corporate Structure

IndustryIntegrated Delivery System
ProblemA non-profit integrated delivery system owned a specialty pharmacy entity experiencing rapid growth that could jeopardize the non-profit status of the organization. Management had concern that the specialty pharmacy was generating unrelated business income (UBI) at an increasing pace. System management wanted to evaluate the corporate structure to enable the specialty pharmacy to continue to grow without jeopardizing its non-profit status.
PHSI SolutionPHSI partnered with a national accounting firm to evaluate the pharmacy and corporate structure of the health system. PHSI provided the pharmacy expertise to work with health system management and the national accounting firm provided the tax expertise. Interviews were conducted with health system management and the specialty pharmacy reviewing the business plan, growth projections, and expected financial outcomes to project future UBI. The accounting firm evaluated the corporate structure and recommended changes that would enable the specialty pharmacy to grow and the health system to maintain its non-profit status with the least amount of risk.
ResultsA detailed recommended corporate structure was created to identify a future state by mapping required changes to allow the specialty pharmacy to grow. The health system was prioritizing changes and identifying a sequence of structural changes to implement the recommendations.