Nashville, Tenn.-based Tenet Healthcare, the parent company of ASC giant United Surgical Partners International, is planning to invest at least $250 million annually in mergers and acquisitions in the ambulatory space, executives shared during the company’s April 29 earnings call.
Here are seven notes to know on Tenet’s USPI strategy:
1. “The pipeline looks good,” CEO Saum Sutaria, MD, said on the call, noting that although $250 million is the company’s baseline goal for M&A, Tenet has averaged nearly twice that amount in annual spending over the past five years.
2. In addition to M&A, Tenet is bullish on de novo ASC development. Dr. Sutaria noted that USPI has a healthy pipeline of new centers under development, particularly those structured as syndications. USPI is targeting facilities with strong potential for service-line diversification — particularly in orthopedics and other high-growth specialties.
3. “Our focus is a little bit more on centers that have the potential for USPI to deploy its service-line diversification capabilities,” Dr. Sutaria said.
4. In the first quarter, USPI added six new ASCs to its network, including a new partnership with Choice Care Surgery Center in Midland, Texas. The 16,000-square-foot, multispecialty facility emphasizes orthopedic surgery and urology, among other service lines.
5. Dr. Sutaria also reiterated that USPI has minimal exposure to Medicaid, which helps insulate the organization from any potential reimbursement cuts.
6. Dr. Sutaria also pointed to three key drivers of revenue-per-case growth at USPI: its robust contracting platform, an emphasis on higher-acuity procedures, and strategic shifts in case volume. During Tenet’s third-quarter 2024 earnings call, he noted that USPI is actively identifying opportunities to “migrate certain lower-acuity, higher-volume types of activities out of the ASCs” to free up capacity for more complex, higher-margin cases.
7. USPI continues to prioritize the transition of total joint replacements to the outpatient setting, which Dr. Sutaria described as an “ongoing march forward.” While he acknowledged that the percentage growth in joint procedures is beginning to taper — a typical trend as a platform scales — he emphasized that overall volume remains strong and that joint replacements continue to represent a major growth opportunity for USPI throughout the decade.
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