ASCs Inc - Surgery Center News

ASC Association President Kathy Bryant predicts that ASC payment rates will fall below 50% of HOPD rates within 5 years unless Congress passes the ASC Access Act which would lock in ASC payments at Medicare's current 59% rate.

How 18 of the ASC management companies, representing over 500 ASCs, assess ASC value.

If you are considering selling a portion of your ASC/endoscopy center, this is a very advantageous time to do so; purchase prices are attractive and there are many well-qualified and interested buyers. But there are also clouds on the horizon. ASC Association President Kathy Bryant predicts that outpatient surgery centers' payment rates will fall below 50% of HOPD rates unless Congress passes the ASC Access Act (see attached note). This would reduce the value of all ASCs.

The past few years have been good times for ASC physician-owners as both ASC management companies and hospitals have shown heightened interest in acquiring minority or majority interests in surgery centers. Physician-owners have benefited from increased competition between buyers that has resulted in more choices of partners, higher prices and better terms. With new procedures approved for reimbursement, increased volume, and more efficiencies, a well-managed surgery center can be worth more than ever. Surgery center owners who want to sell an interest in their center can still benefit from this "sellers" market, in spite of the current economic meltdown. This article describes how centers are valued and suggests strategies for attracting the highest prices from the best companies.

Hospitals and ASC management companies are increasingly interested in forming joint ventures with physician-owned ASCs & endoscopy centers. This interest is fueled because physician-owned and operated centers have proven to be very:

-   economical with costs substantially below hospital costs
-   efficiently operated with high patient throughput
-   patient and physician-friendly
-   profitable with EBITDA margins of 40% or higher


With the legislated changes in facility fee reimbursements for procedures performed in physician-owned ASCs, a joint venture with a hospital and/or an ASC management company may look attractive. This article explores the pros and cons of a joint venture with a hospital vs. an ASC management company and describes a model that includes the best of both worlds.

The past few years have been good times for owners of ASCs and endoscopy centers as both ASC management companies and hospitals have shown heightened interest in acquiring minority or majority interests in physician-owned centers. Physician have benefited from increased competition between buyers that has resulted in more choices of partners, higher prices and better terms. With new procedures approved for reimbursement, increased volume, and more efficiencies, a well-managed center can be worth more than ever. ASC & endoscopy center owners who want to sell an interest in their center can still benefit from this "sellers" market, in spite of the current economic meltdown. This article describes how centers are valued and suggests strategies for attracting the highest prices from the best companies

This is the question asked most often by physicians seeking to sell interests in their centers to hospital and corporate partners. While you might think that there would be a simple numeric answer to this question, there are many considerations that go into providing an answer that is acceptable to both the buyer and the seller, and without a buyer your center has no value except to you. This article is intended to help you understand the elements that come together to create the value of your center, and to help you realize maximum value.

In this article the following is discussed: buyer & seller expectations, preparing your center for a valuation, how valuations are performed, what can add or detract from the value of your center, actions that will make your center an attractive acquisition, steps you can take to obtain the highest offers and the best terms from potential partners, and how to determine the value of your center.

There has been a remarkable upsurge of activity with both hospitals and ASC management companies showing heightened interest in acquiring minority and/or majority interests in ASCs & G.I. centers. Physician-owners can benefit from increased competition between buyers that result in more choices of partners, higher prices and better terms. With new procedures approved for reimbursement, increased volume, and more efficiencies, a well-managed center can be worth more than ever. ASC and endoscopy center owners who want to sell an interest in their center can benefit from strategies that have proven to be effective in finding the right buyer and long-term partner and getting the best price.

How to look at your center through the eyes of a buyer. Each of the 40 potential buyers has its own criteria for investing in a surgery center based on many factors, ranging from the specialty mix to recent and projected growth. Tax advantages to selling are reviewed.

A corporate partner's investment in your ASC can bring you business expertise, profit and efficiency. Corporate partners can: manage your surgical center to combine the efficiency of an ASC with the profitability of a growth business, recruit and syndicate the right physicians, improve payor contracts, reduce expenses and improve collections, and install new technology to maximize profitability.

Find out what you can do to command a premium price from a buyer in today's market. Most ASC companies are willing to spend a little more for a center that looks like a low-risk investment with high-growth potential.

To sell or not to sell part of your surgery center to a corporate partner? That is the question. More corporate partners are throwing more money at more surgery centers than ever before, which should come as welcome news to surgeons looking to convert part of their investments to cash. Surgeons and investors say there has never been a better time to sell. This article describes the competition to acquire centers, the “seller’s market” environment, and soaring multiples of EBITDA being offered. Case studies are provided. A corporate partner’s contributions can be significant and can include: purchasing power, overhead sharing, benchmarking, buyback clauses, expansion and development. Various ownership models, including majority-owned and minority-owned, and management only models are examined. Corporate partners help create a more stable, mature business environment. Recommendations for selecting the right partner are provided.

Selling a portion of your ASC to a corporate partner may make good business sense, but it is a decision that needs to be considered carefully.  A partnership is a long-term relationship that will affect the way your center does business for many years to come.  Topics covered in this article  include:  Why would ASC owners want a corporate partner?  What is your ASC worth?  What are your choices for a corporate partner?  How to go about adding a corporate partner.  What questions should you ask?

Most gastroenterogists are either already partners in an ASC/Endoscopy center (center) or are seriously considering becoming a partner in a new or existing center.  The one topic that is almost never fully explored when planning a center is what is the exit strategy, and how will the senior partners benefit from the financial and other risks they took in starting up the center.  A competitive market for these facilities has developed that results in attractive valuations for ASC /Endoscopy Centers.  This article describes how the partners can extract value from the facility they have developed when they want to take some money off the table or retire.

If you are selling equity to a corporate partner, you can expect a financial windfall.  Multi-specialty ambulatory surgery centers are routinely valued between $10 and $15 million, and you will get a chunk of that, often much larger than your initial investment.  But before you decide to sell a majority ownership in your facility, experts say you should ask yourself several questions.  This article explores the following questions:  Will a corporate partner improve financial performance?  Is a partner necessary for capital?  Do you need help dealing with non-productive physicians? Will you lose control of your center?  Do you really want to cash out?

Emboldened by their success in harassing physician-owned surgical hospitals, hospital lobbyists are now lining up physician-owned ASCs in their crosshairs.  Physician ownership is under an all-out attack in many towns and states that are passing laws prohibiting or curbing physician ownership at a feverish pace.  The legal context for physician ownership of ASCs is explored, as well as the hospital’s point of view and hospital-inspired rollback of protections for physician-owned surgery centers.

Physician-owners of outpatient facilities who have teamed up with managing partners will tell you that when it’s good, it’s really good.  But when it is bad, it is a nightmare.  In this article, physicians who have successfully teamed up with management firms share their advice on how to do it right.

Whether you want to make an important business decision, prepare for the future, or are just plain curious, here is expert advice on how to place a value on an ASC.

The market for ophthalmic surgery center acquisitions is extremely active.  More capital is available for acquisitions.  ASC owners are realizing valuable financial and operational benefits, including higher profits, by having a corporate partner.  Physicians are cautioned to pick the right partner and know the value of your ASC prior to negotiations.