Becker's ASC Review

31 TRANSACTIONS Private equity turns to physicians after courting ASCs for years By Marcus Robertson P rivate equity firms have long used ASCs as investment vehicles, which they have wrapped into larger portfolios and marketed to pension funds and other big institutional inves- tors. But across the market, those institutions are reaching their capacity for such investments. Enter the physician. Private equity firms, especially those that are publicly traded, are creating new kinds of investment portfolios aimed at people with $1 million to $5 million in investable assets, e Wall Street Journal reported June 7. ose worth at least $1 million held nearly $80 trillion globally in investable assets in 2020, and private equity firms want more of that total than the current clip of 5 percent invested with them. With 56 percent of physicians owning a net worth of at least $1 mil- lion in 2021, they are squarely within private equity's target audience for the new line of investment portfolios. It is an alignment that appears to be growing, too; in 2020, only 50 percent of physicians owned $1 million or more, according to Medscape's "2021 Physician Wealth and Debt Report". Only 41 percent were millionaires in 2018. Much of that 15 percent increase from 2018 to 2022 comes in the form of idle cash, according to physician wealth management adviser Joel Greenwald, MD. "I've seen clients accumulate cash, which has added to their net worth," Dr. Greenwald told Medscape. "ey cut back on spending because they were worried about big declines in income and also because there was simply less to spend money on." Private equity groups want to manage that cash via portfolio offer- ings that ideally grow physician investors' balances. ere is no time limit on these products, meaning management fees can be collected indefinitely — an attractive prospect for private equity shareholders. e majority of physicians across healthcare now find themselves high-priority potential wealth management clients, and many are flush with enough cash to consider the idea. But for ASC physician-owners, the catbird seat just got cozier: pri- vate equity wants in on both sides of the ledger. n USPI, United Urology Group ink 22-ASC joint venture deal By Paige Haeffele U nited Surgical Partners International and United Urology Group signed an official agreement to form a joint venture partnership in 22 ASCs on June 21. Dallas-based USPI will acquire a portion of Owings Mills, Md.-based United Urology Group's ownership interests in its established and new ASCs in Maryland, Colorado and Arizona, adding more than 140 urologists to USPI's urol- ogy service network. The transaction is expected to close in the third quar- ter. Once completed, USPI will manage and jointly own the centers with United Urology Group and its affiliated practices. "The partnership will add high-quality urology centers within our existing markets. We are honored to serve ad- ditional patients and support the growth of these ASCs," said Brett Brodnax, president and CEO of USPI, which is a subsidiary of Dallas-based Tenet Healthcare. The centers will be included in Tenet Healthcare's finan- cial statements. n Hospital challenging $12.5M South Carolina surgery center By Marcus Robertson O rangeburg, S.C.-based Regional Medical Center is set to challenge plans for a $12.5 million private ASC in a hearing that has been delayed till Au- gust to allow the hospital and physician group time to try to settle out of court, The Times and Democrat reported June 12. The state's Department of Health and Environmental Con- trol approved plans for the private ASC, the report said. But Regional Medical Center appealed, and after two hearing delays in January and April, another has been set for August. The nonprofit hospital held a June 6 closed-door meet- ing to discuss plans for its own $2.4 million ASC in Or- angeburg, but no vote or public discussion was held, ac- cording to the report. Ambulatory Partners, the private physician group ap- proved to build the ASC the hospital is challenging, has said Orangeburg needs both of the ASCs. Regional Medical Center applied for its ASC one week after Ambulatory Partners asked the state to approve its ASC, the report said. n

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