Becker's ASC Review

19 TRANSACTIONS Compass Surgical's 3 ASC joint venture non-negotiables By Cameron Cortigiano J oint venture partnerships can be an effective way to build and grow a successful network of ASCs, but there are some non- negotiables that have to be met from the start. e bedrock of successful partnerships is set up strong from the beginning with expectation setting, creating alignment between all parties and educating health systems on the differences between hospital and ASC operations, according to one executive. In 2024, Raleigh, N.C.-based Compass Surgical Partners and Jacksonville, Fla.-based Baptist Health partnered to launch a network of ASCs in Florida. at partnership has flourished, with the two organizations most recently partnering with local physicians to operate an ASC in Jacksonville. Scott Bacon, senior vice president of corporate development at Compass, recently connected with Becker's to share how the company is thinking about expansion in Florida, as well as what it takes to make an ASC joint venture partnership work. Note: Responses were lightly edited for clarity and length. Question: Where do you see Compass continuing to grow in Florida? Scott Bacon: We have a joint venture partnership with Baptist Health in Florida, and that's really the cornerstone of our strategy across the state. As part of that partnership, we're actively evaluating geographies where demand for ASCs and surgical care is real. Florida is one of those states with high population growth and good demographics, and there is an increasing need and demand for ASCs. We're looking for the right geography within Florida, and the right patient base that's underserved from an ASC OR capacity. We also want to build a network that really makes clinical and operational sense, not only for Baptist Health, for Compass, but the physician partners that we would align with in those geographies. Q: What has been important to building that partnership with Baptist? What are some building blocks that ASCs and Inside an unexpected ASC deal trend By Patsy Newitt F or years, consolidation in the ASC space meant private equity or health systems buying up facilities and squeezing out physician autonomy in the process. But something has shifted, according to Benjamin Stein, MD, orthopedic surgeon and co-founder and chairman of Bethesda, Md.-based Capital Surgical Solutions. Dr. Stein watched the M&A landscape evolve from the outside. As an independent who never pursued the consolidation path, he has a particular vantage point on what has changed, what is coming and why the next wave of growth in the ASC space may look less like a takeover and more like a partnership. Editor's note: This interview has been edited lightly for clarity and length. Question: As an independent who chose not to be part of consolidation in the traditional sense, what's a recent M&A trend in the ASC space that has surprised you? Dr. Benjamin Stein: You're seeing behaviors on the M&A side — whether it's insurance carriers that own ASCs, health systems, or VC/PE — all of them are looking at how to thread the needle with the right physicians for these facilities in a manner that keeps it a healthy system and keeps surgeons engaged. What surprises me is that, compared to five years ago, consolidation hasn't gone away — it's just being done in a much more thoughtful manner that still maintains autonomy for the surgeons. I hope that trend continues. I think that is the healthiest sweet spot. There's obviously economic context that has influenced things in recent history, but overall, that trend is really positive — and it has surprised me somewhat, just how quickly I was seeing it in the marketplace. Q: Any predictions for the next five years with that shift? BS: A lot of this flows down from Medicare. As regulatory changes happen, there's a downstream effect, and the massive thing starting this year — the IPO list, which will be fully unlocked for musculoskeletal by 2027 — is driving continued focus and growth in the ASC landscape. Health systems are pivoting their strategies accordingly, and independent physicians and surgeons are making sure they're well -positioned. By proxy of all that, you're just going to see continued growth and continued broadening of procedures done in these settings. It will look very different in five years. You'll look back and see not just total knee replacements, but revision total knee replacements. Not just traditional cervical spinal fusions, but lumbar ones. Obviously, very complex cases will remain hospital based, but the ones that are more routine will just be done in ambulatory surgery centers — whether they're physician-owned, JV or health system. Beyond musculoskeletal, I think the five- to 10-year wave is cardiac. That'll take longer; there's the upfront cost, the acuity, the fact that patients and cardiologists have a different comfort threshold. But similar to what we've seen before, as these things are unlocked from a regulatory perspective, different forms of care and supporting technologies will develop. Costs will reset to accommodate that venue, and you'll get cardiologists and patients increasingly comfortable. That's what will ultimately drive that migration. It has to be the people doing the procedures really feeling comfortable, and that's why it'll take a bit longer.n

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