Surgery Partners reported a first quarter revenue boost, in part because of a 122 percent increase in total joint procedures.
Here are four takeaways from CEO Eric Evans about the company's performance during a May 5 first quarter earnings call, as transcribed by The Motley Fool.
Robotics: Mr. Evans credited robotic investments as a factor behind Surgery Partners' leap in total joint cases in ASCs.
"Robotic cases were up nearly 70 percent over the prior year quarter on an installed base that has reached over 20 of our ASCs as of the end of March and continues to expand where we believe we can achieve an appropriate return on investments," he said.
Existing physicians have also been a key component of robotic growth, Mr. Evans said.
"We took a very data driven approach to figuring out what we can do to earn additional procedures from physicians who already like us," he said. "A lot of that was simply just making sure they had the right tools available and so we've been extremely focused on doing that, that's allowed them to — they already liked us, and now they can do more of their book of business with us."
ASCs in particular represent a $90 billion opportunity, according to Wayne DeVeydt, executive chair of the board. He said about $60 billion of new surgeries, mostly orthopedic and cardiovascular procedures, are migrating from inpatient settings.
Cardiology: Mr. Evans said CMS' moves to open cardiac procedures to short-stay surgery centers will open up the potential for adding more centers.
"Just like we've added total joints to five to 10 centers a year for the last several years, our hope is to get five to 10 cardiac centers a year started," he said. "From a cardiac standpoint, that does not mean cath labs initially. That means conversation with cardiologists … We even have a health system partner who is working with us to move some of that stuff out of their cath labs to create capacity.
Transactions: Mr. Evans said he expects Surgery Partners' portfolio to expand with several deals in the pipeline this year. He touted the company's patient-centric approach when attracting physicians.
"We currently have a pipeline of transactions under letter of intent that total over $125 million that we will look to close in the coming quarters," he said. "We are also evaluating over $200 million of transactions at an earlier stage in the process. While acquisition activity is always fickle and is subject to change, this robust pipeline of opportunities, which are at attractive multiples and in attractive specialties and geographies, gives us a high level of confidence that we will be able to meet or exceed our capital deployment goals for this year."
Physician recruitment: Surgery Partners added 25 percent more new physicians in the first quarter of 2021 compared to the same time last year, Mr. Evans said.
"Our ability to drive leading same-facility growth is a direct result of our investments in physician recruiting, targeted facility level and service line expansions, and our relentless data-driven focus on managed care contracting," he said. "We continue to see increased demand from new physicians for our short-stay surgical facilities and our targeted physician recruitment approach has focused our efforts on the highest quality physicians."