Is a major ASC acquisition in HCA's future? Here's what CEO R. Milton Johnson has to say

As KKR prepares to acquire Envision Healthcare and Optum continues to grow Surgical Care Affiliates, other large healthcare and ASC chains are taking note. During the 2018 second quarter conference call transcribed in Seeking Alpha, HCA CEO R. Milton Johnson faced questions about whether the company would need to expand its ASC business; the short answer was no.

 

When asked about whether the company would make a bigger push to expand the ASC line through acquisitions, he said, "We're pleased with our ASC operations today. We have been selectively adding to the number of ASCs we operate. We will continue to look for appropriate opportunities to add outpatient services, especially ASCs in our business."

For the second quarter, the company reported same-facility outpatient surgeries increased 2.6 percent year over year, while same-facility inpatient surgeries were up 1.7 percent. HCA currently operates around 1,800 sites of care, including many ASCs. However, HCA isn't feeling rushed by current market activity.

HCA President and COO Samuel Hazen said during the call that acquisitions are still a part of the company's network development. "We've added some outpatient facilities here and there, some physician clinics, one of which that was sizeable in Austin, Texas, that supported our network there. So we continue to do these tuck-ins. We have, over the last year, added a few hospitals, and we'll continue to look for those as they surface. And as long as they make sense strategically and financially, we will pursue them with the same kind of disciplined approach we had in the past."

Mr. Hazen said the company was pleased with outpatient surgical growth in the quarter, due in part to physician recruitment and ASC development.

"I don't feel compelled to have to do a large acquisition which could result in us acquiring ASCs, that's not in our core market. So very pleased with our strategy today and don't see a need to have to deviate from it," Mr. Johnson said.

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