Market forces driving more private equity to ASCs

CMS and commercial payers continue to push procedures to ASCs, where care can be provided at a lower cost, and private equity investment in surgery centers is increasing to capitalize on this evolving dynamic.

The market is driving more private equity firms to inject capital into surgery centers while hospitals are being pushed to invest in their ASCs, partner with ASCs or acquire them.

Large ASC chains are expanding by developing new surgery centers across the country, and one prominent ASC operator, Raleigh, N.C.-based Compass Surgical Partners, recently received private equity investment to support its expansion into new markets.

Compass aims to use the influx of capital to support the adoption of spine surgery and joint replacement programs and invest in data and analytics and value-based partnerships.

"Given the tailwinds in the market, we saw a window to further catalyze opportunities to develop high-quality ambulatory surgery centers with trusted partners," Compass CEO DJ Hill said in March. "Our team has developed and managed more than 250 ambulatory surgery centers over the course of our careers, and we have high conviction that the outpatient migration is accelerating and that providers deserve dedicated, independent partners to deliver superior clinical and financial results."

Specialties that are seeing the most private equity investment include orthopedics and gastroenterology.

In the orthopedic sector, several private equity-backed management services organizations launched in recent years, offering independent practices the opportunity to expand with more physicians, ancillary services and ASCs while alleviating some of their administrative burdens.

Gastroenterology also continues to be a hot spot for private equity, with large chains such as Gastro Health, United Digestive, U.S. Digestive Health and PE GI Solutions expanding their affiliated physicians and practices across the country.

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