Surgery center consolidation on the rise

Editor's Note

A March 23 report by Axios finds “massive consolidation among ambulatory surgery centers” (ASCs), and more is expected because about half of some 5,500 ASCs are not owned by chains.

ASCs are becoming a target for acquisition because they are high-profit organizations. Recent financial reports show:

• Envision Healthcare (260 ASCs) has a 31% operating margin on $1.3 billion of revenue.
• Surgical Care Affiliates (197 ASCs) has a 19% operating margin on $1.3 billion of revenue.
• Surgery Partners (99 ASCs) has a 17% operating margin on $1.3 billion of revenue.

In recent acquisitions, UnitedHealth Group bought SCA for $2.3 billion and Tenet Healthcare paid $425 million for United Surgical Partners International.

Envision Healthcare (260 surgery centers): 31% operating margin on $1.3 billion of revenue Surgical Care Affiliates (197 surgery centers): 19% margin on $1.3 billion of revenue Surgery Partners (99 surgery centers): 17% operating margin on $1.1 billion of revenue Surgery center companies often jointly own their facilities with local hospitals, but they've also become targets for big players looking to cash in on the outpatient trend.