Ker Leader Medical, a new ASC development company, is committed to preserving the autonomy of physicians and ASC leadership. One key way they achieve this is through their innovative financing model.
John Webb, one of Ker's founders and president of MMC Capital Markets, explained to Becker's that their "Costco" model bypasses private equity, providing an additional advantage through their financing expertise.
With Ker Medical, Mr. Webb told Becker's, "we can structure deals directly in the capital markets. This gives me the power to dictate terms, unlike traditional banks that control terms."
One of the main advantages of this approach is significantly lowering the cost of funds.
"When we can lower the cost of funds, that means ASC earnings can be higher," Mr. Webb told Becker's. "Conventional financing would have required personal guarantees. We avoided that and secured better rates. Doctors often prefer not to be personally on the hook for loans."
Additionally, Ker Medical offers the ability to structure credit umbrellas that grow with physicians' needs as they expand, helping them avoid common financing pitfalls in the future.
The expertise Mr. Webb has crafted from 28 years of working in finance gives Ker Medical a more unique offering than other ASC development companies.
"Our expertise and leverage from a vast book of business allow us to offer unparalleled financing options," he said. "Interestingly, about a third of our business comes from banks referring clients to us because they lack the expertise to structure these deals. We'll work with them but won't teach them everything — I'm not creating competition."
Mr. Webb shared a recent example where a group of physicians left a hospital to start an ASC, seeking more control and stability in their operations.
"Conventional financing would have required personal guarantees," he said. "We avoided that and secured better rates. Lower costs mean better profitability, which helps them thrive independently in a competitive market dominated by larger hospital groups."
Ker Medical is focused on the preservation of independent ASCs, Mr. Webb added.
"The key component when we started this was thinking of it as a one-stop shop," he said. "Everyone has the same concept in mind: leveling the playing field for independent ASCs."