AE July/August 2018 Vol 27 No 4 - 10

RUNNING THE PRACTICE // BUSINESS
XXXXXXX OPERATIONS

SELLING THE ASC-
A CASE STUDY

Dan D. Chambers, MBA, COE

A

fter 35 years of experience
in the ASC world, the opportunity to consider selling one of our two ASCs
under the management of
Key-Whitman Eye Center
was a strategic choice in
the Dallas-Ft. Worth metroplex.
We had originally acquired the
four-OR facility, which was the
first licensed ASC in Texas, from
a private equity firm for $2 about
8 years ago. Yes, $2. The ASC had
been losing money at the rate of
$400,000 annually and was preparing to be closed-the PE firm just
wanted to close it and get rid of it as
soon as possible-when we decided to take over the ASC with just
60 days' notice. With an infusion
of $300,000 capital, we formed a
new partnership, turned the ASC
around, and became a profitable single-specialty ophthalmic ASC with
a dozen cataract, glaucoma, retina,
and oculoplastic surgeons.

10

AE // July/Aug 18

SO WHY SELL?
We were facing the obvious
pressures of healthcare consolidations on a regional and a local
scale: Managed care contracts were
being dominated by large regional
hospital systems, and we were no
longer seeing the opportunity for
much ophthalmic growth in our
specific location. The ASC was an
older facility and would soon need
an equipment upgrade. The facility
was not being fully utilized and the
chance of us attracting non-ophthalmic services was fraught with
disappointment.
POSITIONING THE SALE
If we could find a new partner,
strengthen access to payer contracts
with better reimbursement, retain
the physician partnership, and
commit to added capital to attract
new services, the future of the ASC
would be bright. By negotiating
with a major regional hospital

system that had joint-ventured the
DFW market area with a publicly
held ASC management company, it
looked like we could achieve all of
our objectives.
The key elements of the deal
were allowing the existing limited
partners (who were surgeons from
six different practices) to retain
about half of their original equity
ownership percentage in the new
deal going forward. The ASC
management company would
then hold a 51% ownership as
the new general partner of the
business operations, and continue
a long-term lease from us for the
ASC space in building. By doing
this, the active surgeons would
still have "skin in the game" with
strong interest in the continued
success of the ASC. To allow for
growth, we also arranged the
addition of new potential surgical
partners downstream by negotiating the option to sell limited part-



Table of Contents for the Digital Edition of AE July/August 2018 Vol 27 No 4

AE July/August 2018 Vol 27 No 4 - Cover1
AE July/August 2018 Vol 27 No 4 - Cover2
AE July/August 2018 Vol 27 No 4 - 1
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AE July/August 2018 Vol 27 No 4 - Cover3
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