2 key trends to affect ASC acquisitions and valuation

At the Becker's ASC 21st Annual Meeting in Chicago on Oct. 23, Aaron Murski, senior manager of VMG Health, and Colin Park, manager of VMG Health, discussed emerging trends in valuations and acquisitions in the ambulatory surgical center industry.  

They pointed to two key trends:

First, the ASC sector is consistent with a mature industry. Healthcare spending accounted for 17.2 percent of GDP in 2012, according to Mr. Murski and Mr. Park. It's not expected to decline either: by 2020, healthcare spending is expected to reach $4.5 trillion, or 19.2 percent of GDP. ASCs are experiencing flatter revenue increases, they said. Cost containment strategies should be used to improve the earnings by interest, taxes, depreciation and amortization margin.

Second, Mr. Murski and Mr. Park predicted the possible revival of de novo development in the industry. The physician shortage is projected to widen in terms of the ASC industry, due to an aging physician population and decline in independent physicians, they said. While year-over-year volume growth is declining, year-over-year case growth is increasing, according to Mr. Murski and Mr. Park. Healthcare is headed in a new direction: accountable care.

VMG Health is a healthcare valuation and transaction consulting firm based in Dallas.

More articles on transaction and valuation issues:

4 M&A survival tips for ASCs

6 FAQs about turning a surgery center into a hospital outpatient department

8 things that enhance ASC value

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