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One Bankrupt Hospital, Eleven Freestanding Emergency Departments And Three Texas Hospitals: HCA’s Spending Spree

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Nashville, Tenn.-based HCA Healthcare, one of the country’s largest operators of ASCs, is on a spending spree – inking three deals in the last week.

Most recently, HCA Houston Healthcare purchased 11 freestanding emergency departments from SignatureCare Emergency Center. The deal brings HCA Houston’s freestanding ED portfolio to 26.

HCA Healthcare’s Medical City Healthcare in Dallas acquired Decatur, Texas-based Wise Health System, a formerly locally owned, nonprofit system, and its three inpatient hospitals.

Additionally, HCA will acquire Trinity Regional Hospital Sachse in Texas in a $41 million deal which is expected to close at the end of January. The 32-bed hospital, which opened two years ago, filed for bankruptcy in August after defaulting on around $70 million of municipal bonds.

In 2023, HCA has been focusing on outpatient care, ramping up its urgent care acquisitions. The health system operates about 2,300 ambulatory care facilities, including more than 150 ASCs, and continues to double down on developing outpatient facilities and increasing outpatient procedure migration.

In the third quarter of 2023, HCA reported a 37.4% jump in outpatient revenue, while its operating income was down 4.1% from the previous year.

 

Source: Becker’s ASC Review

Nashville-Based HCA Healthcare To Invest $5.3 Billion To Help Build Market Share

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Nashville, Tenn.-based HCA Healthcare may be coy about giving guidance for 2024 but it has big plans for the next few years as it seeks to build its market share to 29% by 2030.

To help do that, the 183-hospital system is investing $5.3 billion in already approved projects. That figure came out of the company’s investor day Nov. 9.

Included in the $5.3 billion figure, HCA has 62 approved outpatient projects to build freestanding emergency centers and ASCs, totaling $1 billion, and has an additional 200 projects under consideration. HCA is aiming to grow its freestanding ER footprint by 36% over the next two years.

In addition to those investments, the for-profit system expects to drive growth through cost savings and improved benchmarking where facilities can share best practices to improve outcomes and reduce variable costs.

“All in all, management expects $600 million to $800 million of savings over the next five years,” Ben Hendrix, analyst at RBC, said in a research note. “Those savings can help HCA drive EBITDA growth toward the higher end of its targeted 4% to 6% over the next few years.”

HCA is also investing heavily to address labor shortages, building its Galen College of Nursing from five to 20 campuses, according to the research note. An additional 10 campuses are expected to open by 2026, increasing nursing enrollment from 13,000 to 29,000.

HCA, which reported operating income of $1.63 billion for the third quarter on revenue of $16.2 billion, expects its targeted EBITDA growth of the next few years will be met in 2024.

“While our planning process for 2024 is not complete, we currently believe that our 2024 expectations will fall within the targeted ranges above,” HCA CEO Sam Hazen said in a statement ahead of its investor day.

 

Source: Becker’s Hospital Review

Five Healthcare Merger And Acquisition Trends Ambulatory Surgery Centers Should Know

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Mergers, acquisitions and consolidation are a pivotal part of healthcare operations, particularly at Ambulatory Surgery Centers (ASCs).

It can be helpful for independent practices to be aware of trends to compete with ASCs backed by private equity firms and large health systems and to stay up to date with where investors are interested.

Here are emerging trends in healthcare merger and acquisition activity, as laid out in an article by Ankura, a global expert services and advisory firm, and published Oct. 18 in JDSupra:

1. Expanding Outpatient Networks

Reduced cost of care, patient convenience, technology advancement and the pandemic accelerated health system interest in expanding outpatient care offerings. ASCs are experiencing an increase in demand and thus are increasingly attractive to investors.

Big names such as Nashville-based HCA Healthcare and Dallas-based United Surgical Partners International have used acquisitions to expand their outpatient care networks and are producing a growing share of overall company revenue.

2. Rise In Private Equity And Investor Interest

Nontraditional investors such as retail giants, technology companies and private equity firms are expanding their investments into healthcare services. Several physician specialties, including dermatology, orthopedics, gastroenterology, dentistry and ophthalmology, are key targets for private equity.

3. Expansion Of Care Offerings

Many healthcare groups have placed an emphasis on vertical integration — or having a role in various aspects of the care continuum. By acquiring groups along the care continuum, organizations can achieve greater coordination, improved patient outcomes and cost efficiencies.

4. Increased Use Of Digital Health Technology

Healthcare companies have been acquiring digital health startups and technology companies to accelerate innovation, increase operational efficiency and expand service offerings.

5. Health System Consolidation

Healthcare company mergers continue to play a key role in the industry, such as rural hospitals partnering with larger health systems to continue operations. Despite this, healthcare remains highly fragmented and has the potential to further consolidate, according to the article.

 

Source: Becker’s ASC Review