Short-term pain but strong long-term outlook for ambulatory surgery space
The expert highlighted that the sector has been growing at a “nice clip”, driven by the increasing complexity of patient needs and facilitated by advancements in anaesthesia and regional pain blocks.
Turning to the impact of COVID-19, cases are down by around 70%, the Interview revealed, with some regions more impacted than others because of lockdown restrictions. The conversation moved on to how Surgery Partners will be able to accommodate the extra volume of elective demand once the worst of the pandemic has passed.
Notwithstanding COVID-19, the outlook for ASCs is bright. “There’s going to be, as with any industry, some roadblocks and some obstacles but a lot of also really favourable trends,” the expert said. However, Surgery Partners may struggle to adapt to this model. “As you look to consolidate centres out there, a lot of them are looking for those types of relationships that Surgery Partners has very few of,” he added.
Another area covered at length was the impact of COVID-19 on industry M&A activity. Although the space is heavily consolidated, 20% of centres are “acquirable”, the expert said. “I spoke to a broker yesterday who said they’re starting to get inundated with initial requests to get valuations of their centres.” Valuations are expected to be lower, “but not materially lower”.
Other areas of focus were Surgery Partners’ competitive positioning compared with its peers, whether the pandemic may help some procedures move out of the hospital setting longer term, and factors behind the company’s accelerating growth.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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