Surgery Partners goes all-in on cardiology — 5 quotes on its quarterly performance

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Nashville, Tenn.-based Surgery Partners reported $496.1 million in revenue for the third quarter of 2020 and added more than 400 physicians in 2020.

Company leaders discussed quarterly performance and offered insights into future strategy in an earnings call transcribed by The Motley Fool:

Wayne DeVeydt, executive chair of the board, on COVID-19-accelerated changes that favor Surgery Partners' business model: "We do not believe our results reflect solely a COVID rebound, but rather we believe there is a fundamental market shift underway and we are marshaling resources to capitalize on these accelerating trends and gain market share."

Eric Evans, CEO, on quarterly case mix: "We continue to see higher-acuity cases, such as orthopedic and spine surgeries, exceeding prior-year levels while the recovery of lower-acuity cases, such as GI, continue to slightly lag with results in the low-90s percentile of prior year volume for the quarter."

Mr. Evans on embracing cardiology procedures: "One we are particularly excited about is cardiology. We now have three surgical hospitals and two ASCs that currently perform cardio [sic] procedures. ... On a year-to-date basis, our cardio procedures are up 8 percent as compared to 2019. We are planning to more than double the number of ASCs that perform cardio procedures in 2021 and continue to evaluate surgical hospital expansion opportunities."

Mr. Evans on the company's CARES Act grants: "On a year-to-date basis, we have received approximately $53 million in CARES Act funds, of which we have recognized approximately $33 million as other income based on lost revenues since the COVID outbreak. As a result of updated guidance received during the quarter, we reversed $9.9 million of CARES Act grants on the income statement related to the second quarter. The remaining grant money received that has not been recognized as revenue will now be treated as a deferred liability on our balance sheet."

Tom Cowhey, CFO and executive vice president, on quarterly surgical caseload: "Surgical cases declined by 2.6 percent to just under $127,000 in the quarter, primarily due to a slower return of lower-acuity procedures in our gastrointestinal and pain management service lines in the early months of the quarter."

Read the entire transcript here.

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