Dallas-based United Surgical Partners International’s strategy over the past decade is a deliberate transformation with Tenet selling off its hospital portfolio and reinvesting the proceeds into USPI as its core growth engine.
Here’s a breakdown of USPI’s last 10 years:
Pre-2015
In 2014, USPI owned or operated 219 centers, 154 of which were joint ventures with nonprofit health systems, and reported net revenues of $640.8 million for the year, up 4% from 2013. The company acquired 10 centers that year. USPI had gone public in 2001 but returned to private ownership in 2007, backed primarily by PE firm Welsh, Carson, Anderson & Stowe. At this stage, USPI trailed competitors like AmSurg in center count.
2015-2016: The Tenet merger creates the largest ASC chain
In mid-2015, Tenet Healthcare and USPI merged to become the largest ASC chain in the country, with Tenet purchasing 50.1% of USPI for $425 million while expressing intentions to eventually own the entire company. By the third quarter of 2016, the combined platform had 470 ASCs across the country.
The merger also came with significant hospital infrastructure. Tenet owned and operated 79 hospitals and 20 short-stay surgical hospitals in addition to its 470 ASCs, employing nearly 130,000 individuals.
2017-2018: Tenet consolidates ownership and pivots away from hospitals
Tenet increased its ownership stake in USPI to 80% in 2017 and planned to take full ownership by 2020. USPI generated about 10% of Tenet’s net operating revenues in fiscal year 2017, reporting net operating revenues of $545 million for the fourth quarter alone.
Tenet began its long-running hospital divestiture program. During a 2017 earnings call, CEO Ronald Rittenmeyer said hospital divestitures had put the company on track to raise over $700 million that could be used to further increase ownership in USPI, signaling a clear strategic priority shift toward outpatient care.
In 2018, Tenet reported 7.5% net operating revenue growth for USPI in 2018, with 5.1% same-facility revenue growth and cases up 3.4%. That year, USPI invested $240 million in ambulatory M&A, adding 27 facilities and seven new health system partners.
USPI CEO Brett Brodnax also began framing PE firms as partners rather than rivals: In an earnings call he said he viewed private equity entrants as “opportunity” rather than competition.
2019-2020: Overtaking AmSurg
By the end of 2019, USPI overtook AmSurg as the largest ASC chain in the country. In 2019, USPI boosted its market share from 5% to 6%, reaching 260 ASCs, and entered several joint ventures including with Hackensack Meridian Health and Dignity Health.
When the COVID-19 pandemic hit, USPI surgical volumes were down 80% compared to 2019 levels in late April 2020, but recovered to 95% of 2019 volumes by December, a resilience executives pointed to as validation of the ASC model.
In 2020, USPI added 61 ASCs including a landmark $1.1 billion acquisition from SurgCenter Development, adding 85 ASCs to its network. It also paid $78 million to acquire ownership of eight Compass Surgical Partners ASCs.
2021: Massive scale-up begins
At the start of 2021, USPI held interests in 308 surgery centers, including 24 surgical hospitals, in 33 states and had added 3,700 physicians in 2020 alone. USPI was expected to reach 50% of Tenet’s total EBITDA by 2023.
In 2021, USPI completed the $1.2 billion acquisition of SurgCenter Development and its more than 90 ASCs. USPI and SurgCenter entered a five-year development agreement under which they would develop a minimum of 50 new ASCs, with USPI holding an exclusive option to take ownership in each.
Meanwhile, high-acuity volume was surging. Total joint replacements at USPI centers grew 120% during the first half of 2021 compared to 2020, and spine procedure volumes climbed 21%. The company added more than 1,100 physicians to its network that year.
2022-2023: Integration hiccups and full ownership
The SurgCenter integration proved more complicated than expected. Executives revealed during a February 2023 earnings call that progress had slowed. The transaction included many ASCs in early development stages, and planned buy-ups and openings did not happen on original timelines. However, CEO Saum Sutaria, MD, said by mid-2023 the integration was back on track.
Tenet also moved to consolidate full ownership. Tenet acquired Baylor Scott & White’s 5% stake in USPI for $406 million, bringing its ownership to nearly 100%. The company planned to deploy $250 million annually into ASC M&A, with Dr. Sutaria calling the migration of procedures to ambulatory settings a “sustained and significant tailwind.”
Financially, USPI was thriving. USPI’s total net operating revenues for 2023 came to nearly $3.9 billion, compared to more than $3.2 billion in 2022, and the company acquired 31 ASCs for $149 million that year, citing growth across gastroenterology, urology, ENT, orthopedics and ophthalmology.
By this point, Tenet was explicitly repositioning itself as an ambulatory-first company. Tenet had spent more than $2.5 billion in capital investment to scale USPI since December 2020, and USPI set a target of 575 to 600 ASCs by the end of 2025.
2024: Hospital sell-off
In 2024, Tenet fully committed to becoming an ASC-first organization. Tenet sold 14 hospitals in California, South Carolina and Alabama for more than $4.8 billion, channeling proceeds into ambulatory growth. Dr. Sutaria described the moment as Tenet entering “a new era” with a greater proportion of performance coming from its “highly efficient ambulatory surgical business.”
USPI ended 2024 with interests in 518 ASCs and 25 surgical hospitals across 37 states, having added nearly 70 ASCs during the year. In the first quarter, it acquired Covenant Physician Partners (an 80-plus location chain previously owned by KKR). In the second quarter, it added a strategic partnership with Florida Orthopedic Institute. In the third quarter, it opened a San Diego musculoskeletal surgery center developed with Synergy Orthopedics.
Strategically, USPI was sharpening its focus on higher-acuity work and converting facilities. A key part of Tenet’s strategy involved converting single-specialty ASCs into multispecialty centers to increase efficiency and profitability, with Dr. Sutaria also identifying opportunities to migrate lower-acuity, higher-volume activities out of ASCs to create capacity for more complex procedures.
Revenue per case was also climbing intentionally. USPI reported $4.5 billion in net operating revenues for 2024, a 15.4% increase from 2023, with a 7.6% increase in net revenue per case driven by high-acuity procedures and a favorable payer mix.
2025: De novo, cardiology acceleration
With hospital divestitures largely complete, USPI pivoted to organic growth and de novo development as its primary engine. USPI added nearly 70 ASCs in 2024 and anticipated adding 10 to 12 de novo centers in 2025 alone, remaining “very active in both M&A and de novo development.”
Executives described de novos as representing “a significant value shift in markets” because building from the ground up allows USPI to establish preferred positioning. CFO Sun Park noted they carry lower build costs and quicker turnaround than acute care facilities once physician partnerships are syndicated.
While USPI continued to prioritize orthopedics and was evaluating cardiology procedures that could be performed safely in ASCs, Dr. Sutaria cautioned that the cardiology opportunity “will proceed more slowly than people anticipate.”
By year-end, the results were strong. USPI invested nearly $350 million and added 35 facilities in 2025, with same-facility revenues growing 7.5% and double-digit same-store volume growth in total joint replacements.
Into 2026: EBITDA milestone
USPI reported $5.2 billion in net operating revenues for 2025, with full-year adjusted EBITDA climbing to $2 billion. Tenet’s 2026 outlook calls for USPI revenues of $5.5–$5.7 billion and EBITDA of $2.13-$2.23 billion.
Tenet has averaged nearly twice its $250 million baseline M&A spend over the past five years and has a robust pipeline of new centers in development, many structured as physician syndications.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.