It has been a busy summer for AMSURG, one of the largest ambulatory surgery center (ASC) operators in the country. 

In the past three months, the Nashville, Tennessee-based company, which operates a network of approximately 250 surgery centers nationwide, announced several new joint ventures across a range of specialties in California, Oregon and Nevada. 

And there are more partnerships in the pipeline, according to AMSURG Chief Operating Officer Keith Hennegan. 

Hennegan recently connected with ASC News to talk about industry trends and what is next for AMSURG. 

On a high level, the company is capitalizing on the industry’s many “positive tailwinds.” For example, ASCs are becoming a more attractive work environment, especially for clinical, administrative and anesthesia staff, because ASCs offer generally less hectic, more flexible work arrangements, Hennegan said.

Going forward, AMSURG will be focussed on strengthening its teams, improving processes and investing in key technologies. The goal is to create a better value proposition for partnerships by building a solid infrastructure.

Highlights from the ASC News conversation with Hennegan are below, edited for length and clarity.

ASC News: To start, can you give me a general update on AMSURG? What have been some of the major highlights of 2024 so far?

Hennegan: From our standpoint, it’s exciting. We’re standing up and becoming our own new standalone entity. The biggest things we’re excited about are investing in our culture, our systems and our teammates, overall, which ultimately benefits our patients. Another key focus has been getting the growth engine going again. I can touch on a few points, but the exciting part is that when you’re doing great things for patients, you feel compelled to do more. I’m not a fan of growth for growth’s sake, but I’m very excited to grow something that I believe is doing great things for patients and the system.

We’ve hired over 100 corporate teammates year to date, primarily post-emergence. When you think about what that means, we’re standing up a variety of functions – HR, legal, procurement, health plan relations, to name a few. Previously, these functions existed in some capacity, but now we have dedicated leadership, new processes and teammates, all being established post-emergence. That’s very exciting. We’ve also made some newer investments, and there was a major operational realignment about 18 months ago, which is now starting to bear fruit. We often talk about health care being local, and we hope our partners and providers are seeing the local support, ultimately benefiting the patients. 

What about when it comes to growth?

Regarding growth, we’ve completed four deals year to date, with more potentially to be announced soon. We’re also excited about our de novo projects, with three planned for this year, at least another for next year, and more in the pipeline. One unique aspect we’ve noticed, as we’ve reignited the growth engine, is our in-house expertise in de novo development.

AMSURG has completed over 67 de novos in its 30-year history, but only five in the past five years, which is telling. We’re focused on building in-house intellectual property and strengthening our capabilities as we ensure we build and support centers the right way. I could go on, but I’ll stop here – it’s exciting stuff.

Following up on that, could you talk about AMSURG’s joint venture strategy, too? What do you think are the critical factors that make a good JV opportunity?

Yes, first and foremost, they have to be great clinical partners – period, full stop. It’s exciting to say that amidst changes and other factors, one of AMSURG’s core competencies is our aspiration to be a clinical powerhouse. Our clinical team is very strong and passionate, so we want to ensure that our partners share that commitment. Additionally, we look for operational partners who are improvement-minded, which we’ve seen in the partners we’ve engaged with. 

Beyond that, there’s a lot of variety in the nature of partnerships and health system components we consider. The key absolutes are great clinical partners and an improvement-minded approach. That’s been evident in partnerships like the one with Barnabas and others we’re forming, like with UC Davis Health. While it’s hard to pinpoint just a handful of commonalities for successful JVs, those are the absolutes I would highlight.

And how do you source JV opportunities?

Good question. As with many things, this is often local. One of the best ways to make these connections is through passionate partners. We’re also spending a lot of time on provider engagement. This isn’t something you achieve overnight, but having a great partner who can introduce us to a health system is invaluable. 

Some opportunities were slow-walked due to our restructuring, but we’re now in a position as a healthy standalone company to re-engage in those conversations. Some people were uncertain about AMSURG’s financial footing, but now that we’ve emerged, it’s clear that we’ve always been a very healthy business at our core. Misperceptions are being addressed, and dialogues that were put on hold are now being rejuvenated.

You mentioned some opportunities that were put on ice but have recently been rejuvenated. Could you elaborate on that?

Without getting into specifics, there were discussions we had a year or 18 months ago that were put on hold due to AMSURG’s restructuring. People wanted to reconnect later, and now that we’ve emerged and are performing well, we’re seeing deals and other opportunities being announced. There’s a positive snowball effect as people see the value we bring to patients.

How long do JVs typically take to come together, from identifying an opportunity to the JV being up and running?

Oh, goodness, that can vary widely. From inception to really getting things moving, if there are existing centers involved, it can happen in under 18 months. However, building new centers and other factors can take longer. When health systems face particular challenges, things can move quickly, as incentives are often aligned to address patient care. If new bricks and mortar are involved, it generally takes more than two years, but our goal is always to compress that timeline as much as possible to help patients sooner

Looking forward, what does the joint venture pipeline look like?

Again, without getting into specifics, I can say that we’re excited about it. I feel privileged to be an ambassador for what we’re building and to talk about our clinical outcomes and values. It’s rewarding to align our culture with that of potential partners. Growth is a major focus for us, whether through JV opportunities, organic growth, or smaller center acquisitions. We’re evaluating all these avenues to deliver better clinical care.

Are there any regions or markets you are targeting for expansion?

There are pockets where we have an existing footprint, and we’re also seeing white space opportunities. When it comes to white space markets, it’s often more than just a single center; it may involve broader opportunities. We’re evaluating all possibilities, which is why I’m accumulating airline miles at an unusually high rate. Being out in the field with our teammates in existing markets has presented many opportunities. White space markets pose different challenges, but we’re thoughtfully considering how to enter them.

By white space, you mean a market where you don’t currently have a joint venture or any footprint?

That’s correct. We’re in 34 states and Washington, D.C., so we cover a lot of areas, but there are still white space markets. These could be states, or specific zip codes, or cities where we should have a presence. We’re evaluating those as well, understanding that entering a white space market requires different resources than expanding within an existing one.

Shifting gears a bit, could you talk about the challenges you see in the ASC market? What are some of the most significant barriers to ASC growth that AMSURG and others need to overcome?

Many challenges revolve around managing teams. Retention is critical, and we’re focusing on creating a better workplace for our teammates. In health care, supply-demand imbalances are a concern, including in anesthesia. Additionally, we need to consider the impact of baby boomers and physicians retiring. These are challenges we and others in the industry are constantly thinking about. 

It comes down to caring for people – our stakeholders, patients, providers and teammates. Many of the significant challenges stem from those components of the value proposition. These are the areas we spend a lot of our time focusing on.

When it comes to technology, is it mostly investment in back-end administrative technology? Could you elaborate on that a little more?

There are certain components that aim to make our back-end processes, like accounting and purchasing, a little bit easier. These will give us greater data transparency, and the more integrated our data, the better decisions we can make. We’re also working on migrating and improving our data warehouse, which will help with financial and monthly reporting. Additionally, we’re reconciling various reports and other things that will allow us to streamline our information, making better and more timely decisions to help others within our business. Again, these are things patients may not readily see, but they enhance the way we do business and how we get things done. This impacts our accounting, finance, revenue cycle and purchasing functions. Hopefully, in the long term, our teammates and patients will see the benefits.

What else is important to know about the ASC market or AMSURG?

I think what’s amazing to me – there are a lot of great things to say about the ASC market. I’m not sure I could add anything new that others haven’t already mentioned. Personally, I’m rejuvenated by being here.

What excites me most about AMSURG is the incredible grit, which exists at the intersection of passion and perseverance, among our teammates. Despite the unique and uncertain times, it’s inspiring to see how hard our providers and teammates work in the centers and across AMSURG as a whole. That’s what has been most inspiring to me. It’s why I’m here – for the people and the mission. It’s exciting to have positions open and see a variety of people show interest in our platform. I’ve heard about the strong legacy and passionate caregivers at AMSURG who have endured through uncertain times, and it’s easy to be inspired by that group. I feel very fortunate to be here and be a part of it.