Outpatient Surgery Magazine, providing current information on Surgical Services, Surgical Facility Administration, Outpatient Surgery News and Trends, OR Excellence and more.
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LEGAL UPDATE 3 2 O U T P AT I E N T S U R G E R Y M A G A Z I N E O N L I N E | J U N E 2 0 1 4 Surely the management companies would soon become obsolete as health systems rapidly and aggressively took over the ASC market, right? Well, not exactly. Instead of signaling the end of the management firms, the surge of health systems into the ASC market sparked the tri-party deal, a transaction involving investments in a single surgery center from health systems as well as management companies and physicians, each bringing their specific expertise and skill sets to the table. United Surgical Partners, a publicly-traded ASC management com- pany, pioneered the tri-party ASC deal, and has since been followed by other corporate partners. Andrew Hayek, president and CEO of Surgical Care Affiliates, says his company had partnered in ASC ven- tures with 43 non-profit health systems nationwide as of the end of 2013. There are generally 2 ways a tri-party deal can be structured. In one common arrangement, the health system and the ASC management company establish a "joint venture entity," through which they own a majority of the surgery center. The center's physicians own a healthy minority, usually around 49%. Alternatively, the health system and ASC management company can own their shares in the surgery center individually and directly, as the physicians do, without the formation of an intervening joint venture entity. What's in it for you? But how does a tri-party ASC deal create synergy and increased earn- ings for all the participants? Why should physicians choose to partner with 2 corporate partners instead of just 1? From the physicians' per- spective, there are several advantages. Partnering with a local health system offers your facility the oppor- OSE_1406_part1_Layout 1 6/6/14 3:44 PM Page 32