Brentwood, Tenn.-based Surgery Partners has focused much of its efforts in 2026 toward optimizing its portfolio.
In July, the company signed a definitive agreement to sell its ownership interests in two hospitals to Salt Lake City-based Intermountain Health, a major move in its optimization plan.
Here are more details and things to know about the deal and Surgery Partners’ strategy going forward, according to its second-quarter earnings call, transcribed by Investing.com.
What’s in the deal
Surgery Partners is selling Mountain View Hospital and Idaho Falls Community Hospital, along with the ASCs, physician practices and other ancillary businesses tied to that market, to Intermountain Health. Eric Evans, CEO of Surgery Partners, described the sale as covering “the entirety of the Idaho Falls market.” Gross proceeds from the transaction are expected to be about $795 million.
Why executives are calling the transaction the “vast majority” of its strategic shift
Mr. Evans was direct about the scope of the deal relative to the broader strategic review Surgery Partners has been running: “This pending transaction is the most impactful part of our strategic review process to date and represents the vast majority of planned portfolio optimization.” He said the goal of the review was to “further sharpen our focus on our core short-stay surgical facility portfolio to simplify our operations, drive growth and strengthen our balance sheet.”
Dave Doherty, CFO of Surgery Partners, said that after the transaction, the company will have a “clearer ASC and short-stay surgical profile,” a “significantly lower Medicaid mix” and no more obstetrics or neonatology services. Medicaid exposure is expected to fall below 2% of revenue once the deal closes, down from roughly double that today. In effect, Surgery Partners is shedding the parts of its business that look most like a traditional community hospital — inpatient beds, ICU capacity, obstetrics — to end up closer to what Mr. Evans called a “pure-play short-stay surgical” company.
Notably, Mr. Evans suggested this is close to the end of major hospital sales, not the start of a longer pipeline: Idaho Falls is “by far and away the biggest part” of the optimization process, and while he left room for “thoughtful partnerships” down the line, he did not point to additional hospital divestitures already in motion.
The numbers behind the strategy
The sale of the Idaho hospitals is happening against a backdrop of softer profitability. Surgery Partners’ net loss widened to $15 million in the second quarter, up from a $2.5 million loss a year earlier. Despite that, the company reaffirmed full-year guidance of $3.35 billion to $3.45 billion in revenue and at least $530 million in adjusted EBITDA, guidance that doesn’t yet reflect the transaction and will be updated once the deal closes.
A pattern bigger than one company
Surgery Partners isn’t the only large operator narrowing its portfolio around a defined core right now — it’s just doing it in the opposite direction of one of the biggest players in outpatient care. Optum, which owns SCA Health’s network of more than 370 specialty locations and more than 400 ASCs, has spent the past year trimming its own footprint to focus on primary and value-based care: Optum Health cut its affiliated physician network by nearly 20% in 2025, reduced risk-based membership by roughly 15% through market exits and closed primary care locations in Indiana, New York and Oregon. It’s also exploring the sale of orthopedics, general surgery and urology assets in New York that came with its Crystal Run Healthcare acquisition, specifically to refocus on primary care and pediatrics.
The direction is different, as Surgery Partners is cutting hospital-based, lower-acuity and inpatient services to concentrate on ASCs and short-stay surgery, while Optum is shedding some surgical specialty assets to concentrate on primary care, but the underlying logic is the same. Two different types of healthcare operators have independently concluded that being a scaled generalist across care settings is less valuable right now than being a focused specialist in one. Surgery Partners is betting on creating what Mr. Evans called “the only scaled, fully independent ASC management company.”
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