The ASC industry landscape has changed considerably in the past decade.
From mega deals to the introduction of new specialties, technology and CMS regulatory changes, the ASC industry has been through a lot. Here are five key trends that transformed the ASC field from 2010 to today.
1. In 2010, there were 5,111 Medicare-certified ASCs. According to the most recent MedPAC report, the number jumped 9.6 percent to 5,603 ASCs in 2017 with an average annual 1 percent change. However, from 2016 to 2017, the number of ASCs increased 2.4 percent.
2. The past decade has been flush with mega-mergers in the ASC space, including:
• Surgery Partners acquired Symbion in 2014 for around $792 million. Three years later, the company also acquired National Surgical Healthcare in 2017; at the same time, Bain Capital Private Equity acquired stake of Surgery Partners from H.I.G. Capital.
• Tenet acquired United Surgical Partners International, beginning in 2015. Tenet purchased 50.1 percent of the company for $425 million; in 2018, it paid $630 million to acquire the remaining share from Welsh, Carson, Anderson & Stowe. Baylor University Medical Center in Dallas continues to own 5 percent of the company.
• Envision and AmSurg announced their merger in 2016 creating a company worth $15 billion. In October 2018, private equity company KKR acquired Envision in a deal valued at around $9.9 billion.
• UnitedHealth's Optum acquired Surgical Care Affiliates for around $2.3 billion in 2017.
3. Total joints and more complex spine surgeries have made their way into ASCs across the country. At the beginning of the decade, few centers supported these higher acuity procedures. However, there are now more than 310 ASCs with total joint replacements and more than 145 ASCs with spinal surgery. Cardiology is poised to be the next higher acuity specialty headed to ASCs in the 2020s; according to Leerink, 9 percent of cardiac surgery procedures and 6 percent of interventional cardiology procedures were performed in ASCs in 2018, leaving room for growth.
4. CMS has added increasingly complex procedures to the ASC payable list. Earlier this year, the agency released its final rule that placed total joint replacements on the ASC payable list and removed total hip replacements from the inpatient-only list.
5. Private equity has made a big move into the ASC and endoscopy space, specifically in gastroenterology, ophthalmology and orthopedics. The volume of private equity deals in healthcare increased 48 percent and the value of those deals jumped 187 percent from 2010 to 2017, according to data from the Bain Insights Report on Global Healthcare Private Equity and Corporate M&A Report 2018. Last year, there were 316 private equity deals in healthcare valued at $63.1 billion, according to Bain's 2019 report.
Big deals in 2019 include Illinois Gastroenterology Group joining GI Alliance, Physicians Endoscopy partnering with Capital Digestive Partners and Gastro Health acquiring Puget Sound Endoscopy.
On the orthopedic side, Kohlberg & Company invested in Greenwich, Conn.-based Orthopaedic Neurosurgery Specialists; Orthopedic Care Partners invested in Vail, Colo.-based The Steadman Clinic; and Revelstoke Capital Partners invested in Cincinnati-based Beacon Orthopaedics.