NEW YORK – Hospital chain Tenet Healthcare Corp. will combine its outpatient surgery centers with closely held United Surgical Partners International Inc. in a joint venture, expanding its bet on facilities that are becoming more popular with patients.
Tenet will contribute 44 free-standing surgery centers and 20 imaging locations, while USPI, owned by private-equity firm Welsh Carson Anderson & Stowe, will add 202 ambulatory surgery centers and 16 surgical hospitals, the companies said Monday in a statement. Tenet will pay about $425 million in cash to Welsh Carson, they said. Tenet will own 50.1 percent of the venture and have an option to buy Welsh Carson's remaining stake over five years.
The transaction helps Tenet gain a bigger foothold in outpatient surgical clinics, which can be more profitable than hospitals because they focus on routine operations that can be managed efficiently, like orthopedic or oral surgery. Separately, Dallas-based Tenet agreed to buy a British hospital operator, Aspen Healthcare Ltd., from Welsh Carson for about $215 million in cash.
Tenet had 210 outpatient facilities, including surgery centers and other types, at the end of last year, up from 183 in 2013.
Ambulatory surgery centers have benefited as patients and insurers seek more convenient, less costly treatment outside of traditional hospitals. The centers tend to cost less because they have fewer overhead expenses and wait times are shorter, encouraging insurance companies and doctors to recommend them more frequently.
The centers also perform administrative functions for the doctors, such as negotiating more favorable reimbursement rates on an in-network basis with health insurers, according to a 2013 report by Moody's Investors Service Inc. Larger centers can also provide their physicians with more time to see patients and are better able to accommodate physician schedules than a typical hospital, Moody's said in the report.
