Issue link: https://beckershealthcare.uberflip.com/i/415620
10 13th Annual Spine, Orthopedic and Pain Management-Driven ASC Conference + The Future of Spine – Call (800) 417-2035 Here are 10 recent news updates on ambulatory surgery center companies. United Surgical Partners International ac- quired three facilities during the second quarter of 2014 and two additional centers after the quar- ter's close. The company intends to add five to 10 more facilities before year's end. Surgical Care Affiliates and Newport Beach, Calif.-based DISC Sports & Spine have formed a joint venture. Brookside Surgery Center, located in Battle Creek, Mich., is the first ambulatory surgery center in Michigan to perform total knee re- placement surgery. Brookside Surgery Center is a Meridian Surgical Partners facility and a Bronson Battle Creek Hospital partner. United Surgical Partners International's cash flow for the second quarter was $44.9 million, compared to $38.9 million during the second quarter of 2013. National outpatient ambulatory surgery center operator Meridian Surgical Partners settled a qui tam lawsuit brought by a former employee at one of its centers. Trial was set to begin in this case on Sept. 23, 2014. Northstar Healthcare has reached an agree- ment with First Surgical Partners to form a new business entity, which will own and operate First Street Hospital and First Street Surgical Center, both in Houston. Northstar Healthcare will own 51 percent of the new entity, while First Surgical Partners will own the remaining stake. Northstar will contribute $7.5 million to the new entity. AmSurg has installed 17 femtosecond lasers in its centers since 2012. The centers with the lasers grew at a 3 percent higher rate than centers with- out the lasers. Flagler Hospital in St. Augustine, Fla., intends to acquire St. Augustine Surgery Center, a joint ven- ture between Ambulatory Surgical Centers of America and 10 physicians. Laser Spine Institute is a new building head- quarters and an ambulatory surgery center, which will cost approximately $56 million, in Tampa, Fla. Surgical Care Affiliates appointed Lisa Skeete Tatum to its board of directors Oct. 1. n • AmSurg. AmSurg's first quarter revenue increased marginally, 2 percent from $258.2 million in the first quarter of 2013 to $263.1 million. Same- center revenues declined 2 percent. • Foundation Healthcare. Foundation Healthcare's revenue was up 18 percent to $22.1 million for the first quarter of 2014. • Hospital Corporation of America. HCA's net income inched upwards 0.9 percent to a total of $347 million. The company's net revenue had a larger bump of 4.6 percent to $8.83 billion. • Medical Facilities Corporation. MFC reported $72.9 million in rev- enue, consistent with the amount reported in the first quarter of 2013. • Northstar Healthcare. Northstar reported a 194.1 percent growth spurt in net patient service revenue, from $4.1 million in the first quarter of 2013 to $12.1 million. • Surgical Care Affiliates. SCA's total net operating revenues, excluding centers the company does not own a controlling interest in, increased 2.1 per- cent to $196 million. System-wide net operating revenues rose 8.7 percent. • Symbion. Symbion's revenue rose slightly from $130.38 million in the first quarter of 2013 to $133.97 million in the opening quarter of 2014. • United Surgical Partners International. USPI reported consolidated net revenues of $145.3 million, compared to $145.1 million during the same period in 2013. The majority of these companies reported flat financial results or slight in- creases in revenue and income. AmSurg, SCA and USPI all made reference to the impact severe winter weather had on patient volume and financial per- formance in the news releases announcing the quarter's results. Aside from winter woes, ASC companies had to contend with the onset of high deduct- ible insurance plans and expanding effects of healthcare reform. What to expect in 2015 Though predicting the future of healthcare is an uncertain exercise, the new year is just around the corner. Many forces that will shape the upcoming first quarter are already at play. High deductible plans, just beginning to roll out in 2014, will have an even greater impact in 2015 as more patients become insured and select these types of plans. "We will see a state of flux as high de- ductible plans gain traction," says Joe Zasa, managing partner of ASD Man- agement. Patient volumes may suffer another dip in the opening of 2015. While ASC leaders may not have control over when patients with high de- ductible plans decide to schedule elective procedures, they can compensate. For example, ASC physicians can schedule heavy Medicare case loads for early in the year, as Medicare deductibles are not nearly as high as the $5,000 or more deductible plans that are rapidly becoming commonplace. If another brutal winter is in store, ASCs can steel themselves for an on- slaught of cold and possible closures. For example, Charlotte (N.C.) Sur- gery Center closed in winter of this year due to weather, but was able to reopen and perform 44 scheduled surgeries without missing a beat with the help of an online pre-admission solution. Healthcare reform is not only affecting providers, but is also reshaping the payer landscape. Payers are facing the same fierce pressures to cut costs and produce quality results. "Many centers were lulled by their 'success' when re- imbursement for out-of-network claims was very high," says Mr. Zasa. OON volume, while still leveraged in some markets, is drastically dwindling. More and more ASCs are making the move to in-network. Armed with the knowledge, in part, of what lies ahead for the beginning of 2015, ASC leaders can prepare their centers. "Each ASC is different and must find its niche. It must find ways to grow, recruit and be more efficient," says Mr. Zasa. The best positioned ASCs and companies will be those that shoul- der a certain amount of risk. Whether that risk is a gamble like AmSurg's acquisition of Sheridan and Surgery Partner's acquisition of Symbion, a new joint venture or narrow network participation, diversification can pave the way to a stronger first quarter and overall 2015. n 10 Recent Updates on ASC Companies By Carrie Pallardy Are ASCs in for Another Rough Q1? (continued from cover) "Each ASC is different and must find its niche. It must find ways to grow, recruit and be more efficient." — Joe Zasa, Managing Partner of ASD Management.