30 New Statistics on Surgery Center Acquisition & Valuation

More surgery centers are considering acquisition or partnership with a management company or hospital as reimbursement rates decline and profitable strategies such as out-of-network billing become unfeasible. Here are 30 new statistics on surgery center acquisition and valuation, according to data from VMG Health’s 2011 ASC Valuation Survey. The following questions were answered by representatives from major surgery center management and development companies.

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1. Do you target ASCs for acquisition in markets where you already have a presence?
Yes, not exclusively: 58 percent
Targeting new markets: 26 percent
Yes, exclusively: 16 percent

2. Physicians’ expectations regarding ASC multiples have:
Increased: 13 percent
Decreased: 25 percent
Remained unchanged: 63 percent

3. Which model of ASC operator ownership does your company prefer?
Majority equity ownership: 41 percent
Minority equity ownership: 29 percent
Minority equity ownership with hospital partner: 29 percent

4. How does your company determine offering price when approaching ASC acquisitions?
Discounted cash flow analysis: 26 percent
Standard multiple of EBITDA: 7 percent
Risk adjusted multiple of EBITDA: 41 percent
Third party fair market value opinion: 26 percent

5. Are you considering any ASC mergers to boost efficiency and returns?
Yes: 37 percent
No: 63 percent

6. What impact on ASC value do the following traits or situations have:

High level of ownership by physicians in competing centers
Very low: 0 percent
Low: 0 percent
Medium: 7 percent
High: 33 percent
Very high: 60 percent

Low number of physician investors in the ASC

Very low: 0 percent
Low: 7 percent
Medium: 20 percent
High: 33 percent
Very high: 40 percent

High reliance on out-of-network payors
Very low: 0 percent
Low: 0 percent
Medium: 0 percent
High: 7 percent
Very high: 93 percent

Learn more about VMG Health publications at www.vmghealth.com/publications.

Related Articles on ASC Benchmarking:
20 New Statistics on Surgery Center Staffing Costs
8 Characteristics of Highly Successful Surgery Centers
25 Highest Paid Specialties: Salaries for Hospital Employed Physicians

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