Consolidation is rocketing through the outpatient space, spurred by private equity investors and hospitals looking to grow.
Ying Chen, DO, a neurosurgeon at Orthopedics and Neurological Consultants in Columbus, Ohio; Ken Overbey, COO at Proliance Surgeons in Columbus; Robert Zasa, president and CEO of Ambulatory Systems Development; and Melissa Weik, RN, executive administrator at North Pointe Surgery Center in Lancaster, Pa., discussed physician practice consolidation in the ASC industry during an Oct. 24 presentation at the Becker's ASC Review 26th Annual Meeting in Chicago.
At the helm of an organization with 22 surgery centers featuring 250 independent surgeons, Mr. Overby has received an array of offers from private equity investors, with "no doubt" that more are in store. Despite desiring to stay independent at this time, he doesn't see PE investment going away.
"There's no doubt with the money flowing into the arena with more procedures going to the ASC arena, that you're going to see more and more of that moving forward," Mr. Overbey said. "It's just a matter of what the alignment is and what the marketplace will bear."
Dr. Chen and Orthopedics and Neurological Consultants are in the process of looking for investors, and while he said it's a seller's market, the group wants to ensure it can retain its autonomy once an investment closes.
"The conflict is the investment money versus the control," Dr. Chen said. "We'd like to control our own environment if we can."
Mr. Zasa, who helms an ASC development company, stressed that while there are practices considering some form of affiliation, many other groups want to remain independent and retain full control of their practices.
"You [also] have the other side where physicians want to stay independent," Mr. Zasa said. "You have two factors going on nationally. It's incredibly market-specific, of course, but we're seeing a lot of emphasis on diversity of services to make practices … [as] a defensive maneuver. By adding more services and additional doctors to the center … they try to retain the autonomy."
Ms. Weik's North Pointe Surgery Center is one of the groups looking to stay independent. In her Pennsylvania market, two major health systems are driving consolidation, which is almost running rampant. Yet North Pointe values its independence above all else. To accomplish this, Ms. Weik stressed the importance of recruiting.
"Our goal is to remain independent," Ms. Weik said. "We have four office locations and two surgery centers. … It's really constant recruiting. We have 18 orthopedic surgeons in a wide [age] range. It's not like our competition that have physicians that will retire in the next two to five years. We have physicians from 34 to 67 years old. It's a constant recruiting effort we take [to retain our independence]."
More articles on surgery centers:
Pipeline break near surgery center causes Ohio hospital to reschedule some surgeries
2020 ASC budgets: Where 8 execs are spending the most, and key changes for next year
Stark Law changes in the works & 4 other must-read articles