The ASC industry is historically fragmented, but one company seeing skyrocketing growth in the last five years through consolidation.
With 7.1% of national ASC market share, Dallas-based United Surgical Partners International, owned by Tenet Healthcare, is the largest ASC chain in the U.S. The company has a portfolio of 520 ASCs and 24 surgical hospitals spanning 38 states.
USPI far outpaces the next largest ASC chain, SCA Health, which Optum acquired for $2.3 billion in 2017. SCA Health has grown from 186 ASCs in 2019 to 320 in 2023.
USPI has made massive moves so far in 2024. In the first quarter, USPI quietly purchased ASC chain Covenant Physician Partners, after Covenant's private equity owner, KKR, paid off lenders to avoid a distressed debt exchange. Nashville, Tenn.-based Covenant Physician Partners was acquired by KKR in 2017 and operates more than 80 locations across 17 states.
Tenet also added 56 ASCs in 2024, and sold more than nine hospitals for proceeds of $4 billion to invest in the ambulatory space. Most recently, Tenet agreed to sell its majority interest in Birmingham, Ala.-based Brookwood Baptist Health to Orlando (Fla.) Health.
In 2023, it added 31 ASCs for $149 million — nine of which were acquired and 11 were previously unconsolidated centers in which USPI inked controlling ownership interest.
USPI has grown nearly 155% since 2011, when it had 204 ASCs in its portfolio. It was acquired by Tenet in 2015 for $425 million and by the end of 2019, USPI overtook AmSurg as the largest ASC chain in the U.S., ending the year with 264 facilities compared withAmSurg's 258.
USPI paved its way to market dominance in November 2021, when it acquired SurgCenter Development and its more than 90 ASCs for approximately $1.2 billion. In 2022, Tenet paid $406 million to acquire Dallas-based Baylor Scott & White Health's 5% equity position in USPI.
USPI is the driving factor of parent Tenet Healthcare's growth. Tenet's top capital priority "remains the expansion of low-cost, high-quality ambulatory surgical centers for the communities around the country," said CEO Saum Sutaria, MD, in a second quarter earnings call.
As Tenet rapidly reorganizes its portfolio, it will take a "disciplined approach" to improving patient care and physician performance in ASCs' "fragmented" marketplace, Dr. Sutaria added.