M&A activity is 'yesterday's strategy': 3 ASC executives on healthcare consolidation

Becker's ASC Review asked three ASC leaders to share how widespread healthcare consolidation has affected local markets and surgery center operations.

Here's what they said:

Note: Responses have been lightly edited for style and clarity.

Judy Harless, administrator of Oregon Surgical Institute (Beaverton): We're actually seeing growth in our market; specifically, hospital joint ventures. We are a new facility with no hospital affiliation, but with a strong, committed partnership. Our business plan does not rely on cases from the market healthcare systems, so our operations are unchanged.

Michael J. Patterson, president & CEO of Mississippi Valley Health (Davenport, Iowa): We have not seen significant consolidation in our market. We have seen an emphasis on partnerships with physicians and the investment in technology to ensure optimal outcomes for patients. Mississippi Valley Surgery Center merged with the largest nonprofit health system in Iowa (West Des Moines-based UnityPoint) and a well-regarded management company (Deerfield, Ill.-based Surgical Care Affiliates) a few years ago, which has allowed us to work together on surgical site optimization. The partnership has been key in affording us the opportunity to execute on our growth strategies.

Frank J. Chapman, COO of Ohio Gastroenterology Group and Central Ohio Endoscopy Center (Columbus): Merger and acquisition activity is typically yesterday's strategy with little understanding of tomorrow's financial environment. Often, these entities seek to increase the price to the consumer by securing a large portion of the local/regional market. In the historic frequency-based environment, this makes sense. Also, as investors enter the ASC market, the focus can change from providing high-quality healthcare to gaining market share through growth, or increasing "same-store sales."

But as we move toward value, in the long run, the lowest cost provider with the highest quality [will] win. In reaction to these mergers and acquisitions, my organization's operations continue to look forward and focus on high-quality care and lower cost to the consumer.

To participate in future Q&As, contact Angie Stewart at astewart@beckershealthcare.com.

For a deeper dive into the future of spine, attend the Becker's 17th Annual Future of Spine + Spine, Orthopedic & Pain Management-Driven ASC in Chicago, June 13-15, 2019. Click here to learn more and register.

More articles on transactions/valuation:
Mount Sinai Medical Center opens $275M surgical, emergency centers
HCA Healthcare grows outpatient cases 3.2% in 2018 & more — 8 ASC industry notes
56 ASC benchmarks to know on regional operating expenses per case

© Copyright ASC COMMUNICATIONS 2019. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.


Top 40 Articles from the Past 6 Months