Providers across healthcare sectors continue seeking consolidation opportunities to increase access, lower costs and improve quality, according to VMG Health's "2019 Healthcare M&A Report."
Six takeaways for the ASC sector:
1. The number of Medicare-certified ASCs in the U.S. reached 5,603 in 2017, representing a compound annual growth rate of 1.3 percent since 2010.
2. About 72 percent of freestanding ASCs are independently owned and operated, leaving room for further consolidation. Major industry players — including AmSurg Corp., United Surgical Partners International, Surgical Care Affiliates, HCA Healthcare and Surgery Partners — control the other 28 percent.
3. Valuation multiples increased in 2018. Median total invested capital to trailing 12 month EBITDA multiples increased from about 6.8x in 2017 to about 7.4x in 2018.
4. Outpatient total joint volume will grow an estimated 77 percent by 2026. Inpatient total joint volume is expected to remain stagnant.
5. ASCs that pursue bundled payments or perform the 12 cardiac catheterization procedures newly approved by CMS — total joint and cardiac catheterization, in particular — are acquisition targets.
6. ASCs taking advantage of the CMS-approved cardiac catheterization procedures have also managed to negotiate higher transaction multiples.