Editor's Note: This story has been updated to reflect Ascension's announced close of its transaction.
Days after receiving a green light from the Federal Trade Commission, Ascension has closed its $3.9 billion deal to acquire ambulatory surgery management services company AmSurg.
The purchase establishes the nonprofit health system as the country's third-largest ambulatory surgery center (ASC) platform with more than 300 such locations. The transaction was announced roughly this time last year.
“Healthcare is increasingly moving beyond the traditional hospital setting, and this acquisition positions us to lead that transformation,” Eduardo Conrado, president and CEO of Ascension, said in a statement. “By expanding our ambulatory surgery capabilities, we are making care more accessible, convenient, and affordable for patients, while ensuring our hospitals remain focused on highly specialized acute care. Together, we are building a more integrated, future-ready health system."
On Tuesday, the system and the FTC shared word of a proposed consent order that would permit the deal's close so long as Ascension divested seven ASCs in markets the regulator said would otherwise be left with reduced competition. These were Panama City, Florida; Tulsa, Oklahoma; Waco, Texas; Wichita, Kansas; and Nashville, where two sites are located.
The proposed order required the handoffs be completed by the time of the acquisition’s close. Six of the facilities would join SC Affiliates, another national ASC operator, with the seventh center in Panama City going to Florida Gastroenterology Center, a physician group and current minority owner.
Pre-acquisition, AmSurg spanned more than 250 ASCs in 34 states. However, the FTC had contended that Ascension’s acquisition of these seven locations would impact outpatient gastroenterological, ophthalmological and orthopedic surgeries in their markets, likely leading to higher prices and potentially lower quality care or information.
“Access to quality surgical care at an affordable price is critically important for millions of Americans across the country,” Daniel Guarnera, director of the FTC’s Bureau of Competition, said in the announcement. “The FTC’s action ordering divestitures of surgical care centers will help preserve a competitive market that will allow patients to get the care they need at a fair price.”
Other requirements for the parties outlined in the proposed order included agreements to provide up to a year of transition assistance and not interfere with employee relationships at the to-be-divested facilities. Ascension would also, for a decade, be required to give the FTC prior notice of any upcoming ASC acquisitions in the metropolitan areas surrounding the divested ASCs.
Ascension announced its acquisition plans nearly a year ago, broadly describing the deal as a continuation of its sweeping strategic realignment and a way to meet healthcare’s increasing shift to out-of-hospital care. Even without the pickup, the $25 billion nonprofit system had logged in its financial filings substantial year-over-year increases in outpatient surgery volumes as it sought to meet the market.
Earlier this year, Conrado told Fierce Healthcare that the purchase would flesh out 10 of Ascension’s existing markets—improving overall volumes and allowing its hospitals to focus on high-complexity patients—as well as provide a non-acute presence in 25 new markets where it could partner with local health systems to become their ASC of choice.
“The ambulatory space has a 10%-plus CAGR going forward, and then our acute side, [for] the markets that we’re in, 3%,” Conrado told Fierce Healthcare in January. “We’re still going to be big on the acute side, and now we’ve got some tailwind for growth. If you have a tight operation and then a portfolio that enables growth, we’re in a good spot. You’ve got a crazy curveball coming our way—we should be able to handle it.”