On the one hand, MedStar Health has joined with several community hospitals including Suburban Hospital in Montgomery County, St. Mary's Hospital and Calvert Memorial Hospital to become each institution's rehabilitation arm. They've brought community goodwill within the community, businesses and physicians. Together, we've forged and developed a rehabilitation program for the rural-based hospital. Both parties benefit from the alliance, which produces a more rapid startup of a successful rehabilitation program than either party could produce individually. MedStar has also aligned with Physiotherapy Associates, a regional rehabilitation company, to not only provide services to a larger region, but also to create a larger network needed to secure managed care contracts.
Strategic alliances have their downsides, however.
Some risk is involved. By aligning with other companies there is always a threat that the other partner will usurp the business. The partner begins to do things on his own. This presents a huge challenge for the small company, that does not have the resources to fight, especially if the partner is a large company. You can't live without them, but it's difficult to live with them, especially in a service or distribution business.