Jon Vick: I believe that the uncertainties of healthcare reform have prompted many ASC owners to seek a strategic (hospital or ASC management company) partner to help find ways to improve their ASC performance. We are working on more deals this year (currently over 20) than in the past few years — up by about 50 percent. Most of our engagements are with smaller centers: 2-3 ORs and about 50 percent are with single-specialty (GI, ophthalmology, spine) centers.
Most of the centers we are engaged by are profitable but significantly underutilized, and several are for out-of-network centers that need professional management to convert them into a profitable in-network business. Some have seen a decline in profitability and are thus prompted to seek a partner to provide professional management to reverse this trend.
We continue to see higher prices being offered by the ASC management companies than by hospitals (by usually 10-20 percent). In addition, there is better alignment of the physician-owners goals with the ASC management companies than with hospital buyers.
In my 25 years of ASC experience, trends once started seem to continue for several years. Thus I expect that what we are seeing in 2010 will continue into 2011.
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