Becker's ASC Review

18 TRANSACTIONS What ASC-hospital joint ventures are doing right By Francesca Mathewes T he dynamics of ASC-hospital have changed as hospitals have become increasingly interested in pursuing outpatient ventures. is oen takes the form of joint ventures with existing ASCs. Some ASC leaders and physicians are wary of these relationships, as some report negative impacts to physician autonomy and financial misalignments between the hospital or larger health systems and the ASC. When designed more justly and collaboratively, however, these partnerships can produce positive long term results for all parties involved. "We've been able to get better reimbursement rates by having a hospital be the majority stakeholder," Bruce Feldman, the administrator of Eastern Orange Ambulatory Surgery Center in Cornwall, N.Y., told Becker's. "ey have a whole contracting department at their disposal. So that was one of the biggest reasons why the hospital became involved here in the first place, and the partners decided to sell their shares to the hospital." Particularly, as the range and complexity of services ASCs offer continues to increase, more hospitals are looking into joint ventures with an outpatient focus. A January 2024 survey of health system executives by VMG Health found that 60% of leaders were considering pursuing outpatient surgery joint ventures in 2024, the highest area of interest of any potential specialty partnerships. Eastern Orange Ambulatory Surgery Center, previously privately owned, sold its majority ownership to Montefiore St. Luke's Cornwall Hospital in Newburgh, N.Y., in February 2024, as the hospital began seeing an increase in surgical volume shiing to the outpatient setting. In addition to favorable reimbursement rates with payers, the partnership has also given the ASC access to other valuable financial resources. "e second big advantage has been we have been able to gain access to the hospitals' group purchasing organization, which we did not have before," Mr. Feldman said. "We're able to get supplies and other types of items of that nature at a significantly low cost, especially big equipment purchases." is rings particularly true for ASCs affiliated with hospitals that are a part of a larger system, such as Montefiore. "e third biggest advantage is just having the resources of a major healthcare system to tap into when we have issues," Mr. Feldman said. "Whether there are issues with regards to insurance or issues regarding materials management." According to L.E.K. Consulting's "2024 ASC Insights Study," access to capital and support services of larger healthcare organizations were among the top five reasons why ASCs might pursue such a partnership. ese advantages may also apply to other operational challenges, such as facility upkeep and management. "If we have an issue with a computer we can call the hospital's IT department, and they help us resolve the issue," Mr. Feldman said. "ose are typically resources that we did not have prior to February with the hospital becoming a major owner." e "positive" relationship between Eastern Orange Ambulatory Surgery Center and its hospital partner is due to physician buy-in and regular collaboration between the facilities, Mr. Feldman said. e partnership is governed by a board that includes the hospital CFO, the ASC medical director, who doubles as the hospital's medical director and an orthopedic surgeon from the ASC. "e board has a representative from the hospital, the medical director, and one of the physician partners," Mr. Feldman said. "ere's a direct channel to be able to get things done. So we have not really had any major obstacles for us." n Real estate firms launch $150M ASC joint venture By Claire Wallace F ort Street Partners and Chestnut Healthcare Real Estate have formed a joint venture to acquire and develop $150 million in outpatient medical and surgery centers over the next four years, according to a Jan. 3 report from the Commercial Property Executive. The joint venture will focus on properties in Salt Lake City. The two firms have worked together previously, collaborating on at least two Utah deals. In June, Fort Street Partners secured equity for a 20,399-square- foot medical project in Syracuse, Utah, through Chestnut Healthcare. One month later, the two companies partnered to develop the Eagle Mountain (Utah) Medical Center development, a 24,655-square-foot medical building. n AMSURG acquires Texas ASC By Claire Wallace AMSURG has acquired a majority ownership interest in Texarkana (Texas) Surgery Center. The outpatient surgery center is located on the border of Texas and Arkansas, according to a Jan. 23 press release. Texarkana Surgery Center provides procedures in ophthalmology, orthopedics, gastroenterology, gynecology and general surgery. The 17,000-square- foot facility includes four operating rooms and three procedure rooms. AMSURG has a network of more than 250 ASCs across the country. n

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