Ascension’s acquisition of AMSURG shows shift to ambulatory care

National Harbor, Md. – Ascension’s $3.9 billion acquisition of AMSURG and its 300 ambulatory surgery centers reflects more than just a big deal.

For Ascension, the addition of AMSURG reflects a significant shift in the Catholic system’s strategy of healthcare delivery. Ascension is one of the nation’s largest nonprofit hospital systems, but the deal shows the system is looking to provide more care outside the hospital.

Saurabh Tripathi, the chief financial officer of Ascension, said during a panel discussion at the Healthcare Financial Management Association conference this week that the health system is pivoting to provide more care in the ambulatory setting.

“One thing we will never walk away from is our mission …. but we do want to take the care out of hospitals,” Tripathi said in the HFMA session.

Tripathi said Americans are making it clear that they would prefer to get procedures done in an outpatient setting so they can get home more quickly, rather than staying in the hospital. With patients showing their preferences, Ascension is moving in that direction to give them what they want, he said.

While Tripathi said that he is pleased to see the closure of the AMSURG acquisition, he said the hard work now begins. The system is looking to move forward with delivering more care in the outpatient setting.

“Making it successful is a whole other journey,” Tripathi said.

Ascension said the pivot to the outpatient delivery of care is designed to offer more convenience for consumers and offer options for care at a lower cost.

Eduardo Conrado, president and Chief Executive Officer of Ascension, said in the announcement of the closure of the AMSURG deal that the system has shifted more to the ambulatory space.

“Healthcare is increasingly moving beyond the traditional hospital setting, and this acquisition positions us to lead that transformation,” Conrado 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."

Kevin Holloran, senior director for Fitch Ratings, said at the HFMA conference that Ascension deserves credit for taking a different approach in healthcare delivery.

“We’re frankly seeing a little bit of a push, if you will, to ambulatory, urgent care, anything on the outside, which is cheaper to build, cheaper to staff,” Holloran said.

Fitch downgraded Ascension’s credit rating from “AA+” to “AA” last September, acknowledging its improved financial performance but also noting the system issued more than $4 billion in additional debt. Nonetheless, Ascension maintains strong positions in Texas, Florida, Tennessee, and Indiana.

Based in St. Louis, Ascension has divested some of its hospitals in recent years, as the system has chosen to leave markets where it hasn’t been a dominant presence. The Catholic system owns 94 hospitals now, down from 140. Tripathi said the system has very intentionally reduced the size of its footprint in recent years.

Ascension has said the completion of the AMSURG acquisition has been a core element in its plan to ensure the health system’s long-term viability. Tripathi said it’s not likely that the system will look to build another brick-and-mortar hospital in the foreseeable future, unless it’s really vital to the community.

With any strategic decision, Tripathi said Ascension is focused on the patients, saying, “How do we serve our patients in the most efficient manner, the lowest cost setting, and providing care that the patients need?

Tripathi said in the panel discussion that he’s enthusiastic about Ascension’s shift in strategy, with more care moving toward the ambulatory setting in the hold.

“I am glad we are making that bold, strategic move,” Tripathi said. “Time will tell if it’s the right move or not.”

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