Healthcare transaction advisory firm VMG Health published a review of the industry's second-quarter earnings season, including insights from leaders at Nashville, Tenn.-based HCA Healthcare, Brentwood, Tenn.-based Surgery Partners and Dallas-based Tenet Healthcare.
Quotes from three ASC companies' second-quarter earnings call transcripts:
1. Samuel Hazen, CEO and director of HCA Healthcare: "What I will tell you also is that our ambulatory surgery centers were slower in their ramp-up because they were at a complete stop versus our hospitals, which were continuing to run during the pandemic period, and so they have ramped a little bit slower, as [CFO and Executive Vice President William Rutherford] alluded to in his comments. What we saw within our surgery [centers] were procedures — orthopedic, spine, general surgery — recovered quicker and stronger. We also saw a slower recovery in our GI procedures in certain diagnostic categories, which started to ramp significantly at the end of June, which gives us a belief that downstream, those diagnostic patients and encounters will ultimately require some level of therapy, whether it's surgery or something else."
2. Wayne Scott DeVeydt, executive chairman of Surgery Partners: "The transition of procedures out of traditional acute care inpatient settings accelerated during the quarter. In June, we performed 2.6 times as many joint replacements in our ambulatory surgery centers as we did during June of 2019. For the year, even with the disruption of COVID, joint replacements in our ambulatory surgery centers have increased by 70 percent.”
3. Ronald Rittenmeyer, executive chairman and CEO of Tenet Healthcare: "We also implemented a series of necessary targeted cost actions in [the second quarter] so we could redirect additional resources to our response. … The real-time, data-driven dashboards we created during the pandemic have been instrumental in informing our response. Our teams are constantly inputting data into each system to closely monitor staffing.
"Additionally, monitoring [personal protective equipment] supplies, medication, equipment and bed capacity. The ability to capture real-time inventory levels of crucial things means we can dial back or accelerate as needed, keeping us balanced throughout the system and ahead in meeting the demands of our clinicians and facilities. These systems are supporting our needs and enabling us to transfer nursing support and supplies to other facilities when deemed necessary."
4. Eric Evans, CEO and director of Surgery Partners: "Technological improvements, cost savings and patient safety have been the primary drivers of this shift pre-COVID, and we believe that patient and physician sentiments in our current environment will further propel this shift for 2020 and beyond. This has been our company's differentiation. And now, more than ever due to COVID-19, this value proposition is resonating with key stakeholders in the healthcare environment — patients, physicians and payers.
"To help capitalize on this trend, on July 22, we raised an additional $115 million of gross proceeds via an add-on offering to our 2027 notes. With the proceeds from this most recent offering, we plan to focus on growth-related activities, including the following: service-line expansions, where our teams are working to capitalize on the accelerated transition of orthopedic and spine cases in the short-stay surgical facility setting, as well as broader cardiology and robotic migration trends; physician recruiting and technology infrastructure investments, to further improve the effectiveness of our lead generation and ROI, as well as to make improvements in our data and analytics that will enhance our managed care and revenue cycle efforts; and importantly, to help fund a robust M&A pipeline of transactions heavily focused in orthopedics, cardiology and other key specialties across the country. The pipeline has been fantastic. But we remain focused on those end-market and de novo opportunities. They're extremely attractive. So we kind of have both going for us now, but I would just reiterate, we certainly love the in-market de novo and roll-up transactions, and those continue to be very accretive, and they continue to be available to us."