It has been a year of adaptation and opportunity for United Surgical Partners International, AmSurg, SurgCenter Development and Surgery Partners, all prominent ASC management and development companies.
Highlights on each company's performance and growth this year:
1. United Surgical Partners International (Addison, Texas). USPI, the ASC-focused business that is 95 percent owned by Dallas-based Tenet Health, began 2020 with plans to add more centers to its platform, make acquisitions and expand services such as orthopedics, spine, cardiovascular and robotics. As of Jan. 8, it had 296 ASCs. By April, many of these centers temporarily closed or scaled back business to offset COVID-19 shortages and outbreaks. Along with withdrawing its financial forecast for the year due to pandemic-related uncertainties, Tenet furloughed around 10 percent of its workforce of more than 113,000 employees.
Despite these challenges, 70 percent of USPI hospitals received five stars on CMS' Hospital Compare Rankings, and 28 USPI facilities were recognized by Press Ganey for delivering "exemplary" patient-centered care. By the end of the third quarter, USPI's surgical case volume returned to 94 percent of pre-pandemic levels, and although ambulatory cases were down 0.3 percent, same-facility, systemwide net operating revenues were up 6.5 percent. USPI added 1,000 new surgeons to its team in the first nine months of the year, with new service lines launched at 54 existing facilities.
2. AmSurg (Nashville, Tenn.). Part of Nashville-based Envision Healthcare, AmSurg started the year with 258 ASCs in 25 states, as well as 3,500 partner physicians. When the pandemic hit, forcing AmSurg centers across the country to suspend or delay most services, Envision was devastated by volume and revenue losses. The company reported a 39 percent year-over-year drop in second-quarter sales before adding in federal grants — which bumped the figure up to a 34 percent decline in sales. To get centers back up and running safely and in compliance with local restrictions, AmSurg worked fast to publish reopening guidelines. It also collected and shared data on the clinical impact of the pandemic, which has caused nearly 200,000 patients to miss preventive colonoscopy screening for colorectal cancer. These were the kinds of obstacles mounting by early September, when Jeff Snodgrass took over as AmSurg president and interim president Chan Chuang, MD, returned to his role as Envision's chief medical officer. The installment of Mr. Snodgrass, whose expertise is in cardiology businesses, underscore AmSurg's heightened interest in the space.
3. SurgCenter Development (Towson, Md.). SurgCenter Development partnered with physicians to open several new ASCs this year, including Fremont, Ind.-based Lake George Surgical Center in November, Advanced Surgical Care of Clearwater (Fla.) in August, Boyne City,-based Northern Michigan Surgical Suites in August, and Jeffersonville, Ind.-based River Ridge Surgical Suites in February. The investments weren't insignificant; construction on the Jeffersonville center alone carried a price tag of $2.5 million, and the company's website states it is partnering "to open more than 15 centers each year." SurgCenter's network includes 200 centers and 2,200 surgeon partners.
4. Surgery Partners (Nashville). It was a busy year for Surgery Partners, which is majority-owned by Bain Capital. In January, Eric Evans replaced Wayne DeVeydt as CEO. At the time, orthopedics represented 37 percent of Surgery Partners' cases, and the company planned to continue focusing there this year after delivering strong earnings in 2019. The pandemic delivered a blow; by April, many of Surgery Partners' 111 ASCs were operating at less than one-fifth of typical volumes. In response, to slash quarterly operating costs by nearly 50 percent, Surgery Partners furloughed some workers and converted some salaried staff to hourly rates. Even with the disruption of COVID-19, joint replacements in Surgery Partners' ASCs were up 70 percent, said Mr. DeVeydt, now executive chairman, in a second-quarter earnings call.
Surgery Partners ended the first quarter with $441 million in revenue, and as of April had received around $45 million in funding from the Coronavirus Aid, Relief and Economic Security Act as well as $120 million in Medicare accelerated payments. Over the next several months, Surgery Partners expanded its partnership with care coordination services provider BridgeHealth; took out hundreds of millions of dollars in debt from its revolving credit facility; sold some of its anesthesia services businesses and acquired a majority stake in a California heart hospital. Meanwhile, it added more than 400 physicians to its facilities, including 180 in the third quarter, with revenue up 9.8 percent year over year. Surgery Partners now has more than 180 locations across the country, with musculoskeletal procedures comprising 44 percent of all cases. Going forward, the company is focused on acquiring robotics technology for its centers and embracing the shift of more orthopedic, spine and cardiology procedures to the ASC.