• Kelso & Co. acquired Physicians Endoscopy
• KKR & Co. acquired Covenant Surgical Partners
• Tenet Healthcare Corp. acquired a controlling interest in United
Surgical Partners International (USPI)
• UnitedHealth Group/Optum acquired Surgical Care Affiliates
Despite these mega deals involving the largest ASC management
companies, many of those that remain continue to structure their ASC
partnerships in traditional JV arrangements, rooted in the value of
having physicians as direct minority owners. Physician ownership cre-
ates economic and reputational alignment, leading to high-quality
care, better utilization and smarter expense management. The few
ASC management companies that have tentatively explored PPM
arrangements still tend to pursue the traditional JV model, consistent
with their historical strategy and national platform.
No matter who holds the reins, traditional ASC management compa-
nies seem to have the same horses in the race. This is not the case with
PPMs, which have a fundamentally different approach to ASCs.
PPM model
After the failures of the 1990s, today's PPM companies (often referred
to as "platforms") are focused on delivering value to their managed
practices and growing the PPM platform's earnings. They often do this
by developing and building out ancillary services, including lab, imag-
ing and ASCs. Unlike ASC management companies that view the sur-
gical center as the core business, the typical PPM platform views the
ASC as only an "ancillary service" to a medical practice. Because of
this fundamentally different investment strategy, the PPM platform
typically elects to:
• enter into a long-term management arrangement with the practice;
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