Surgery centers seeing lots of consolidation
- Ambulatory surgery centers are becoming a hot target for acquisition as more care shifts to outpatient settings to contain costs and get patients home quickly, according to an analysis by Axios.
- Recent financial reports from some of the biggest surgery center chains, including Envision Healthcare (31% operating margin on $1.3 billion in revenue), Surgical Care Associates (19% margin on $1.3 billion revenue) and Surgery Partners (15% margin on $1.1 billion revenue), show business is booming.
- There will likely be more consolidation in this sector as only about half of the upwards 5,500 ambulatory surgery centers in the U.S. are not owned by chains, the analysis adds.
Consolidation in the ambulatory surgery sector highlight an ongoing emphasis on providing care in nonhospital settings. Surgery centers offer lucrative profits by handling elective procedures, scheduling lots of them and catering to patients who often have more ample commercial health insurance.
In January, UnitedHealth Group announced plans to purchase Surgical Care Associates for $2.3 billion. The Illinois-based chain provides services to about 1 million patients a year across more than 30 states through its 205 surgical facilities. The move broadens the payer's portfolio and expands its capabilities for population health management.
Envision merged last year with AmSurg to create a $10 billion enterprise and one of the larger physician-staffing companies in the country.
And in 2015, Tenet Healthcare paid $425 million for United Surgical Partners International, a Dallas-based ambulatory surgery center operator. The deal dovetailed with Tenet’s ongoing focus on the outpatient setting and higher margins there. Tenet also acquired three ambulatory surgery centers through its $215 million acquisition of UK-based Aspen Healthcare, which also included four private acute-care hospitals and a cancer center.