Private equity has long shown interest in ASCs, but some industry leaders believe that heightened scrutiny of PE’s healthcare investments could dampen this trend.
Josh Mastracci, director of an investment bank TM Capital's healthcare practice, joined Becker's to discuss the biggest threat and opportunities for growth for ASCs.
Editor's note: This response was edited lightly for clarity and length.
Question: What is the biggest threat to ASCs right now?
Josh Mastracci: Movement towards increased regulatory scrutiny of institutional investment in ASCs is troubling as it has already started to inhibit physicians’ ability to finance continued growth of and improvements to these facilities. A growing segment of the private equity and credit market is increasingly hesitant to explore investment in situations where potential transactions may be denied in late stages of diligence by state officials - as would be the case in California, for example, where AB-3129 will authorize the state Attorney General to approve or deny private investment in healthcare entities.
Q: What are ASCs' biggest opportunities for growth right now?
JM: The growing quality and optionality of specialty services supporting physicians on the operations side of outpatient facilities — both by health systems via joint ventures and by private ventures focused on improvements to specific functionality like revenue cycle, recruiting, volume/case mix analysis, site selection/construction management, certification/licensure, etc. — is creating an increased opportunity for physician owners to scale these facilities as businesses while not sacrificing, and in fact making material improvements to, access to and quality of care for patients.