The ASC industry has seen an influx of private equity interest, consolidating the industry. Ophthalmologist Richard Lee, MD, who works at Oakland, Calif.-based Eye MD Laser & Surgery Center, spoke with Becker's ASC Review on why his ASC hasn't sold to private equity firms, despite offers.
Question: Is private equity investment good or bad for ASCs? Why?
Dr. Lee: I've been approached by several private equity companies, as well as gone through long negotiation processes with a large hospital system who wanted to buy the majority interest in our surgery center. Those deals all failed because the contracts were difficult to deal with.
I had several meetings with private equity companies and got very attractive offers, but in my final analysis I felt that their philosophy didn't fit with the way I wanted it to. I felt that we'd be better off with a less business-oriented approach. I consider myself and my facilities a medical profession, and there's a specific red line that I wouldn't cross to prioritize business. Unfortunately, private equity just moves the industry in that direction.
Surgery is based on the best interest for patients, not what's the best interest of the enterprise. Private equity companies will say they are concerned about patient care, but the bottom line is they're motivated by profit.
We are a fairly successful surgery center and we don't have much competition. I don't have any financial motives based on what they could offer. I have access to capital. We feel we run very well. We can always hire consultants. I can negotiate good contracts, and I can buy equipment. I don't see an advantage other than a good price we don't need.