1. Compared with 2009, ASC operators predicted that their level of activity in 2010 will:
- Increase — 73 percent
- Remain the same — 18 percent
- Decrease — 9 percent
2. When discussing their 2010 acquisition strategy, ASC operators said their preferred ASC partners were:
- Underperforming ASCs primed for turnaround — 46 percent
- ASCs with a proven history of profitable operations — 35 percent
- De novo development — 19 percent
3. An overwhelming majority (82 percent) of ASC operators said they primarily target acquisitions in markets in which they have an existing presence.
4. ASC operators listed the following five characteristics as most attractive in potential ASC partners:
- Existence of a significant level of available physician recruits
- Location in a market in which the operator has an existing presence
- Involved, diversified physician-ownership base
- History of strong financial and operational performance
- Location in a market that has a low level of competition
5. ASC operators listed the following five characteristics as least attractive in potential ASC partners:
- Significant reliance on an out-of-network strategy
- Majority volume/revenue derived from a single or few active physician(s)
- Significant reliance upon non-owner physicians
- Location in a market with a high level of competition from ASCs/hospitals
- Significant capital expenditure needs (aging equipment/facility)
6. Most ASC operators (45 percent) reported an average of 1-2 competitive bids in an acquisition. Other responses included more than two (32 percent) and zero (23 percent).
7. ASC operators noted the following areas where they can make the most impact following an acquisition:
- Promote increased efficiency (expense reduction)
- New physician identification and recruitment
- Partnership restructure/resyndication
- Improvement in managed care contracts
8. When regarding how the ASC acquisition market has changed in the past five years, ASC operators gave the four most common responses:
- Acquirers are conducting higher levels of due diligence on acquisition targets
- Acquiring entity will offer a lower price to an ASC due to the existence of significant risk characteristics
- Operators are seeking to make acquisitions in markets in which they have an existing footprint and strategic advantage
- Operators are increasingly looking to partner with acute care hospitals and hospital systems
Information comes from VMG Health’s ValueDriver ASC Risk Assessment Survey. VMG Health is a leading valuation and transaction advisory firm in healthcare. To receive a complimentary copy of VMG Health’s ValueDriver ASC Risk Assessment Survey, click here.
