Becker's ASC Review

45 TRANSACTIONS Optum to acquire Steward physician group By Patsy Newitt O ptum, parent company of ASC chain SCA Health, will acquire financially troubled Dallas-based Steward Health Care's physician group, e Boston Globe reported March 26. An Optum subsidiary filed a notice March 26 with Massachusetts' Health Policy Commission to acquire the physician group, Stewardship Health, for an undisclosed amount, according to the report. e commission has 30 days to assess the effects of the proposed transaction on healthcare and could conduct a more extensive review. e sale is a part of the 33-hospital system's plan to mitigate financial distress, including falling $50 million behind on rent. Steward went from being purchased for $895 million in 2010 to losing more than $800 million from 2017 to 2020. In February, Steward released a plan to address financial issues, including a financing agreement with a $150 million cash infusion in additional liquidity as the system moved toward the sale of its physician group. e deal has drawn scrutiny from lawmakers, many of whom have repeatedly accused Steward of prioritizing shareholders over public health, according to the Globe. Sen. Elizabeth Warren said in a March 26 statement that while her top priority is ensuring the hospitals remain open, "Steward executives have no credibility, and I am concerned that this sale will not benefit patients or health care workers, or guarantee the survival of these facilities." "Optum, a UnitedHealth Group subsidiary, is already the largest employer of physicians in the country — controlling over ten percent of American doctors — which means this deal raises significant antitrust concerns in Massachusetts and nationally," she added. Steward is looking to transfer ownership of all nine Massachusetts hospitals and will close its Stoughton, Mass.-based rehabilitation hospital on April 2. Additionally, Steward closed San Antonio-based Texas Vista Medical Center in May and Port Arthur-based Medical Center of Southeast Texas in February. Optum has seen soaring growth in the last year, adding nearly 20,000 physicians in 2023. e group's growth is "raising antitrust and noncompete concerns as more payers and private equity firms pursue medical practice acquisitions," according to a December report from Medscape. "Any potential transfer of Stewardship Health should center around the needs of patients and help stabilize — not further harm— the commonwealth's already fragile healthcare system," Massachusetts Health and Hospital Association President and CEO Steve Walsh said in a statement shared with Becker's. "We believe a transaction of this magnitude must be subject to a stringent and transparent approval process that invokes Massachusetts' best oversight tools – the very same oversight that local hospitals are held to." Becker's has reached out to StewaOptum and will update this story as more information becomes available. n Maryland medical office building sells for $4.5M By Claire Wallace A six-suite medical office building in Elkton, Md., has sold for $4.5 million, according to an April 5 report from the Maryland Daily Record. Five of the building's suites are occupied by eye, orthopedic and spine providers and an ASC. The facility has 19,656 square feet of rentable space. The property was sold by a group of eye specialists in the area and purchased by Franklin, Tenn.-based Community Healthcare Trust. n 2 real estate firms join forces for medical office building acquisitions By Claire Wallace R eal estate investors Cypress West and TPG Angelo Gordon have entered a joint venture that intends to acquire $300 million in medical offices across the Sun Belt over the next two years, according to an April 17 report from Commercial Property Executive. The partnership acquired its first medical office building — an 85,000-square-foot facility in Scottsdale, Ariz., for $21.3 million — in March. The joint venture was seeded with the recapitalization of a four-asset portfolio of medical properties in Arizona and California owned by Cypress West Partners that totals about 200,000 square feet and is 97% occupied. The Cypress West portfolio currently includes close to 2 million square feet of medical office properties, with more than 250,000 square feet currently in various stages of development. TPG Angelo Gordon, a recent joint venture between Angelo Gordon and Sendero Capital, just made its fifth medical office acquisition for $8.1 million. n

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