Becker's ASC Review

24 TRANSACTIONS Senator argues for physician-owned hospitals By Laura Dyrda S en. James Lankford, R-Okla., teamed with Brian Miller, MD, an assistant professor of medicine at the Johns Hopkins University School of Medicine, to pen a column for e Wall Street Journal calling for an end to the ban on physician-owned hospitals. e ACA placed a moratorium on new physician-owned hospitals that also prevented existing facilities from expanding. Mr. Lankford and Dr. Miller contended the legislation limits competition and access to care. "Many for-profit and nonprofit hospitals are saving lives and caring for families. But recent research affirms the power of American entrepreneurship to lower costs and improve quality. Doctors, whether at the bedside or the forefront of scientific innovation, are well-suited to reimagine healthcare operations, lower costs and improve the quality of care," they wrote. e column, published Feb. 20, also notes the high levels of consolidation among hospitals as independent facilities and small chains are struggling financially and joining large hospital chains with out-of-state management. Mr. Lankford and Dr. Miller argue allowing physician-owned hospitals in rural communities would provide another, hyper-local option to care. Mr. Lankford is among the legislators introducing the Patient Access to Higher Quality Health Care Act to allow for physician-owned hospitals. "e federal government doesn't prohibit plumbers from owning plumbing companies, radio hosts from owning radio stations or farmers from owning farmers markets. It's time to reopen the free market in healthcare and let the power of competition do its work," they wrote. n Optum to add LHC Group in $5.4B deal: 4 notes By Laura Dyrda U nitedHealth Group closed the multimillion-dollar deal to acquire home health and hospice company LHC Group Feb. 22, according to an SEC filing. Four details: 1. LHC Group has 29,000 employees in 37 states that will join UnitedHealth Group's Optum as part of the acquisition. The company has more than 950 locations across the U.S. and reports around 12 million patient encounters annually. 2. UnitedHealth Group agreed to pay around $5.4 billion for LHC Group, which logged nearly $62 million in net income through the three-months end of 2022, down from $122 million in 2021. LHC Group's net service revenue hit $576.9 million in the third quarter of 2022. 3. The acquisition adds to Optum's value-based care services and extends its reach for hospice and home care. Optum already serves more than 130 million patients and Optum Care has 2,000 locations nationwide. 4. SCA Health is part of Optum's network as well, boasting more than 320 surgical facilities and 11,300 teammates. n USPI to inject $250M into ASC acquisitions By Patsy Newitt D allas-based Tenet Healthcare, parent company of ASC chain United Surgical Partners International, will pump $250 million into ASC mergers and acquisitions, the company said Feb. 9 during its fourth- quarter earnings call transcribed by Seeking Alpha. "USPI's M&A engine under the Tenet umbrella continues to be an industry-leading differentiator," CEO Saum Sutaria, MD, said on the call. "In 2022, we added 45 centers to the portfolio through M&A and de novo development, in addition to the [SurgCenter Development] centers." The company is also continuing to build surgery centers through its USPI development team and from its partnership with Towson, Md.-based SurgCenter Development. And in June, USPI and United Urology Group formed a partnership for 22 ASCs. According to the earnings call, USPI has 22 ASCs in active syndication or under construction. The company is also focusing on USPI's value-based offerings. "Our services are generally 30 percent to 50 percent more affordable than similar services delivered in a hospital setting," Dr. Sutaria said. "The linkage to our hospital business creates an unquestionably superior platform from which to draw talent, operating expertise and scale benefits." In 2022, USPI reported $1.3 billion in EBITDA, with strong margins at 40.9 percent, according to the company's financial report. USPI's same-facility revenues grew 4.6 percent in 2022, which is in the range of the company's long-term, top- line growth goal of between 4 percent and 6 percent. n

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