Amsurg Corp., an investor-owned company known mostly for rolling up and developing ambulatory surgery centers, has been aggressively diversifying into physician services at hospitals since buying Sheridan Healthcare about a year ago.
The Nashville-based company went so far as to make an unsolicited $5.3 billion buyout offer in October for TeamHealth Holdings, a leader in physician staffing. The deal was rejected and Amsurg withdrew its bid in November.
But Amsurg CEO Chris Holden told investors last month he sees organic revenue growth in Amsurg's physician staffing business of 5% to 7% versus 2% to 4% in its developing ambulatory surgery center business.
TeamHealth CEO Mike Snow said in an interview that his company liked its growth prospects without Amsurg, and wanted to concentrate on absorbing a big recent acquisition of its own. In November, the Knoxville, Tenn.-based company paid $1.6 billion to acquire another leading provider of outsourced physician staffing, IPC Healthcare.
With that acquisition, TeamHealth now has about 15,000 physicians deployed at hospitals and skilled-nursing facilities across the country. Snow said TeamHealth likely will slow its acquisition pace in 2016 to fully integrate IPC.
But that's not the inclination of other big investor-owned players in the space.
Amsurg and Mednax are out raising new money, signaling that the acquisitions fever is not over.
Amsurg is planning a secondary offering of common shares to raise as much as $516 million for acquisitions and to retire some debt. The company has $500 million in potential acquisitions in its pipeline. Just last week Amsurg bought Premier Emergency Medical Specialists, a 49-physician group that's the exclusive provider of emergency services at two Dignity Health hospitals in Phoenix.
Mednax, a leader in pediatrician and hospitalist staffing, is targeting a $500 million debt offering for acquisitions and other debt retirement, the company said in a regulatory filing.
Physician groups are interested in selling for a host of reasons, many of them related to the fast-changing business environment under new payment models and federal quality initiatives.
Capitol Emergency Associates, an emergency physician staffing practice in Austin, Texas, sold its 120-physician practice to TeamHealth in February at the urging of St. David's Medical Center, said Dr. Neil Mendelson, TeamHealth's regional medical director.
St. David's, a 50/50 joint venture with Nashville-based hospital chain HCA, was intent on following the new HCA model of integrating the ED with internal medicine at its hospitals, and TeamHealth was chosen as the staffing contractor to make that happen.
In part, Mendelson said, the integration was a response to bundled payments and other value-based reimbursement models, which put providers at risk for preventing readmissions and duplicative care and tests by tying payments to successful treatment and follow-up care.