2 ASC chains reveal health system team-ups in one week: What next?

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Two national ASC chains revealed new health system partnerships in the past week, the latest in a slew of collaborations over the past 18 months.

Nashville, Tenn.-based Surgery Partners inked a deal with Orange, Calif.-based UCI Health to expand the system's outpatient surgery network. Through the joint venture, announced May 28, UCI Health patients needing same-day surgery will be directed to Surgery Partners ASCs.

UCI Health will reserve capacity at its inpatient facilities for emergency services and inpatient specialty care, which it needs for expansion as the only Level 1 trauma center in Orange County.

"We anticipate this partnership will bring continued growth for both organizations and will become a valuable aspect of our business strategy in the Southern California market," Surgery Partners CEO Eric Evans said in a statement. The company has 12 facilities, out of more than 180 locations nationwide, that are joint ventures with health system partners.

Five days later on June 2, Dallas-based United Surgical Partners International announced a joint venture with AdventHealth's West Florida Division in Tampa, which officially began earlier this year. The two consummated their partnership by acquiring Tampa Outpatient Surgical Center in January, which now is called AdventHealth Surgery Center Wellswood.

"We are pleased to begin our partnership with AdventHealth in the Tampa community and work to collaboratively offer patients another option for top-quality surgical care," said Collin LeMaistre, market president for USPI's operations in Florida and Georgia, in a news release.

Health system partnerships have been part of USPI's strategy for years, operating joint ventures with Chicago-based Amita Health, Sacramento, Calif.-based Scripps, San Francisco-based Dignity Health and Philadelphia-based Jefferson. Many of their past partnerships have been with physicians and the systems to develop single centers; joint venturing on outpatient strategy is a newer evolution.

Regent Surgical Health also inked a big deal with St. Louis-based Ascension earlier this year to become its official ASC development partner. Ascension Capital, the health system's investment affiliate, and TowerBrook Capital Partners, an international investment firm, invested in Regent in March. The two are planning to develop, acquire and operate ASCs in Ascension's existing communities.

"Consolidation in our market has resulted in fewer choices for health systems and physicians looking to realize their outpatient surgical vision," Chris Bishop, CEO of Regent, told Becker's. "With this investment, Regent now has the ability to bring substantially increased resources to partners of any size, and because we remain independent, we can still differentiate on what we've always been known for: offering the highest quality solution at the greatest value."

Deerfield, Ill.-based Surgical Care Affiliates, part of Optum, was among the chains to kick off this type of partnership in December 2019 by inking a deal to become equity partners in a slew of ASCs with Minneapolis-based Allina Health System. The partners aimed to develop up to 12 new surgery centers through 2025, with the initial centers beginning to open.

Health systems are developing broader outpatient surgery strategies as more cases move outpatient. Patients want to return home the same day, and payers are directing cases to the outpatient setting. The pandemic accelerated the migration, and some health systems are turning to the expert chains to develop an internal network. Others are keeping the same strategy they had for growth before the pandemic.

"The pandemic underscored the importance of having an integrated health system positioned to treat patients in the most appropriate setting based on their health status," said Deborah Schiff, executive vice president of strategy and business development, ambulatory services, for New Hyde Park, N.Y.-based Northwell Health, earlier this year. The system currently does not have an official ASC chain partner. "We have found that the pandemic has accelerated consumer acceptance of ambulatory surgical care and believe this will prove to be a lasting change to consumer preference. It did not, however, formally change our ASC strategy or our relationship with local independent centers."

As healthcare consolidates, these types of partnerships will likely continue. Surgery Partners, USPI and Surgical Care Affiliates executives have talked about big plans to expand their networks this year, and health systems can provide capital and strength to do so.

 

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