How the Co-Tenancy Model Works


March 4, 2020



Co-tenancy offers not-for-profit hospitals the opportunity to jointly own, use and govern the assets of an esoteric laboratory. A modest capital investment secures an ownership position, replacing the purchase of reference testing services with the ability to actually own a piece of the laboratory. The hospital owners then in effect perform the esoteric testing themselves at a lower cost and exercise direct control of the laboratory operations. A board of directors made up of representatives from every owner, actively controls all aspects the laboratory.

As a cooperative arrangement, co-tenancy thrives on the trust of its members. This trust is established by the fair and equal treatment of each co-owner. In order for competitors to work together for mutual benefit, an accurate method of cost allocation is absolutely essential.