Surgical Care Affiliates

Surgical Care Affiliates
Surgical Care Affiliates, LLC
Type Private
Founded 2007
Headquarters Birmingham, Alabama, USA
Key people

Andrew Hayek President and CEO, Joe Clark EVP and CDO, Michael Rucker EVP and COO, Rich Sharff EVP and General Counsel

industry = Healthcare
Products Ambulatory Surgery Centers
Revenue increase $1 billion US$ (2010)
Owner(s) TPG Capital
Employees 3,700 full time (2010)

Surgical Care Affiliates, LLC, headquartered in Birmingham, Alabama operates a network of 150 ambulatory surgery centers and surgical hospitals across the country with approximately 3,700 full-time employees and more than 2,000 physician partners. The 150 surgery centers and surgical hospitals operated by SCA focus on short-term care and primarily provide non-emergency surgical and other procedures in several specialties, including orthopedics, ophthalmology, gastroenterology, pain management, otolaryngology, urology, gynecology, and others. The centers and hospitals provide the facilities, logistics and support staff necessary for physicians to perform these procedures.

Clinical quality is a primary focus for the company. SCA recently took the lead in creating industry-wide clinical outcomes reporting procedures, using metrics endorsed by the National Quality Forum. All SCA facilities pursue accreditation through the Joint Commission on the Accreditation of Healthcare Organizations (JCAHO), the American Association of Ambulatory Surgery Centers (AAASC) or the Accreditation Association for Ambulatory Health Care (AAAHC).



Origins at HealthSouth

HealthSouth Surgery Centers Division was created in 1995 when HealthSouth entered into the outpatient surgery business following its purchase of Surgical Health Corporation in January. At the time HealthSouth was rapidly expanding from its traditional offering of inpatient and outpatient rehabilitative services into surgical and diagnostic care. The deal with Surgical Health added 36 surgery center in 11 states to HealthSouth's already 400 inpatient and outpatient centers.

Growth of HealthSouth's Surgery Center Division

The number soon grew to 55 centers through HealthSouth's purchase of 12 facilities from Sutter Health in August 1995 and through the purchase of independent facilities. Through the purchases of Surgical Health and Sutter, HealthSouth became the second largest provider of outpatient surgery.

HealthSouth's next big purchase came in October 1995 when the company announced it was buying publicly held Surgical Care Affiliates in a $1.2 billion dollar deal. The deal added 67 more surgery centers including 10 more that were under development. The acquisition made HealthSouth the largest provider of outpatient surgery in the nation with a total of 122 surgery centers. In September 1997, HealthSouth spent $180 million to buy ASC Network Corp.'s 29 centers.

HealthSouth continued to grow its Surgery Division through acquisitions of independent facilities. In April 1998, HealthSouth acquired 34 outpatient surgery centers from HCA, who was selling them to pay down debt stemming from a billion dollar Medicare fraud. By the time the acquisition was complete, HealthSouth's number of surgery centers had grown to 212. Not less than three weeks later HealthSouth announced it would acquire the second largest publicly traded outpatient surgery center company National Surgery Centers. The $590 million dollar deal added 40 more surgery centers leaving HealthSouth with a total of 250 surgery centers.

HealthSouth’s First Planned Spin-off

HealthSouth's first planned spin-off of its Surgery Division came on August 27, 2002 when the company announced it was spinning-off the division into a publicly traded company. The spin-off company would have contained 209 outpatient surgery centers in 37 states and had annual revenues in excess of $1 billion dollars. Less than two months later on October 16, 2002, HealthSouth announced that they were shelving the proposed spin-off.

Scandal at HealthSouth

On March 18, 2003, Federal agents from the FBI raided HealthSouth's corporate headquarters in Birmingham. As a result of the scandal, HealthSouth closed or sold many of its underperforming surgery centers.

HealthSouth’s Second Planned Spin-off

On August 14, 2006, HealthSouth announced it was again planning to either spin-off or sell its Surgery Division. This also came with the announcement that HealthSouth planned to do the same with its Outpatient Rehabilitation and Diagnostic Divisions in an effort to focus on its much larger Inpatient Division. HealthSouth retained investment banking company Goldman Sachs to evaluate potential deals.

On March 26, 2007, HealthSouth announced that it would sell its Surgery Division to TPG Capital for $920 million. HealthSouth also said it planned to retain around $25 million in equity in the Surgery Division. At the time, HealthSouth’s Surgery Division was composed of a network of 139 outpatient surgery centers and three surgical hospitals. The new company would be among the nation’s largest providers of outpatient surgical services.

Birth of a New Company

On June 29, 2007, HealthSouth announced that TPG had finalized its previously announced transaction to purchase the companys Surgery Division, creating Surgical Care Affiliates, one of the nation’s largest independent surgical care companies. The new company was among the nation’s largest providers of outpatient surgical services, comprising a network of 137 outpatient surgery centers and three surgical hospitals, located in 35 states, with a concentration of centers in California, Texas, Florida, North Carolina, and Alabama.

Recent Expansion

December 26, 2007 SCA and UCSD Medical Center to Partner in Surgical Center SCA announced that it had entered into a joint venture relationship with University of California San Diego (UCSD) Medical Center to partner in the operation of the existing UTC SurgiCenter located at 8929 University Center Lane. Under the new partnership, the center operates under the new name, University Ambulatory Surgery Center. University Ambulatory Surgery Center continued to operate as a multi-specialty center offering orthopedics, pain management, ophthalmology, general surgery, otolaryngology, urology, plastics and podiatry. SCA continues to provide the day to day management of the center.
May 5, 2009 South County Surgical Center to partner with SCA South County Surgical Center, a Joint Commission accredited center, located at 12345 West Bend Drive, St. Louis, Missouri, announced that it had partnered with SCA, a leading provider of surgical services. South County Surgical Center is a state of the art, multi-specialty center offering GI, gynecology, pain, general specialties, orthopedic, ophthalmology, otolaryngology, plastic and urology services. SCA and 24 physicians own the facility as a joint venture, and SCA provides management services.
May 20, 2009 St. Cloud Orthopedic Associates to partner with SCA St. Cloud Orthopedic Associates (SCOA), the largest orthopedic physician practice in Central Minnesota, announced that they would partner with the St. Cloud Surgical Center, which is owned by SCA and a group of local physicians. This relationship will allow St. Cloud Surgical Center, which has provided high quality outpatient surgical services for 37 years and is located at 1526 Northway Drive, to expand its orthopedic surgical service offerings to complement its portfolio of other specialties, including otolaryngology, general surgery, gynecology, ophthalmology, oral surgery, plastics, podiatry, gastroenterology and urology. SCA continues to provide management services to the facility.
August 12, 2009 Twin Cities Orthopedics to partner with SCA Twin Cities Orthopedics (TCO), one of the largest orthopedic physician practices in the Midwest, announced a partnership with SCA to develop a new orthopedic surgery center in Edina, Minn. The new center will open in late 2010 and will be located at 4010 65th Street West Edina, Minnesota. In addition to assisting in designing the surgery center, SCA will provide management services to the facility.
August 18, 2009 SCA and Hawaii Pacific Health Partners, Inc. Complete Joint Venture SCA announced the completion of a joint venture transaction with Hawaii Pacific Health Partners, Inc. (HPHPI) to construct and operate a new outpatient surgery center in downtown Honolulu, Hawaii. Under the terms of the agreement, SCA and HPHPI are joint owners of ASC Pacific Ventures, LLC, which now has a majority ownership interest in the existing Surgicare of Hawaii located at 550 South Beretania Street. The joint venture will relocate the surgery center to a new facility to be built in the Waterfront Plaza development on Ala Moana Boulevard. The surgery center plans to offer an array of surgical services, including orthopedics, pain management, ophthalmology, general surgery, otolaryngology, urology, obstetrics/gynecology, plastics and podiatry. SCA will provide day to day management services to the center.
September 1, 2009 Surgical Hospital of Oklahoma to Partner with Surgical Care Affiliates Surgical Hospital of Oklahoma, located in Oklahoma City, announced that it has partnered with SCA. Surgical Hospital of Oklahoma is a state of the art hospital providing surgical services and inpatient acute care in a number of specialties including pain management, podiatry and orthopedics. SCA and a number of physician partners will own the facility and SCA will provide management services.

External links

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