April 4, 2022 – Raleigh, NC 
Compass Surgical Partners has appointed Robert Carrera to serve as its next Chief Operating Officer. As the nation’s high-performance joint and spine Ambulatory Surgery Center developer/manager, Compass tapped Carrera to deliver industry-leading performance and to continue to execute its mission to cultivate high-value partnerships that deliver exceptional surgical services to local communities.

Carrera brings over 30 years of healthcare experience and leadership, with the last 20+ focused exclusively on the ASC industry. In 2020 he concluded 15 years as President and CEO of Pinnacle III where he had oversite of the development and management of 40+ surgery centers primarily in the musculoskeletal (MSK) arena.

Raleigh, NC - March 11, 2022 // Compass Surgical Partners (Compass), a full service, independent
developer and manager of ambulatory surgery centers (ASCs) announced a minority investment by Health Velocity Capital, a growth equity firm that invests exclusively in innovative healthcare services and software businesses. Concurrent with the financing, Marty Felsenthal, Health Velocity Capital Partner, joined Compass’ Board of Directors.

Ambulatory surgery centers (“ASCs”) are freestanding surgical facilities that serve as a convenient, low-cost, same-day-surgery surgery option for patients. Buoyed by clinical advancements allowing most surgeries to be provided safely in ASCs, the majority of surgeries have migrated into these centers.

Over the past few years, this trend has accelerated even faster with new technology, the adoption of safer and more effective techniques in anesthesia, and surgeons’ increased experience in non-hospital settings. COVID-19 both re-affirmed and accelerated the shift as ASCs become important tools to help alleviate hospital capacity. “Given the tailwinds in the market, we saw a window to further catalyze opportunities to develop high-quality ambulatory surgery centers with trusted partners,” said DJ Hill, CEO of Compass. “Our team has developed and managed more than 250 ambulatory surgery centers over the course of our careers, and we have high conviction that the outpatient migration is accelerating and that providers deserve dedicated, independent partners to deliver superior clinical and financial results. Partnering with Health Velocity Capital will benefit our joint ventures, as the firm has deep expertise in rapid innovation deployment and shares our belief in the importance of high-quality ASCs.”

Insights from an ASC Expert, by Scott Bacon & Chris Stai

This month’s "Insights from an ASC Expert" column is co-authored with Chris Stai, Managing Director of HREA | Healthcare Real Estate Advisors, a leading national healthcare real estate advisory group.  As a former Director for a publicly traded healthcare REIT, Chris has immense expertise in healthcare real estate and unique insights for navigating complex transactions. 

How do I maximize the value of the ASC real estate? 

Or rather, how do you maximize not only an investment in an ASC, but also the underlying real estate? The value of the ASC real estate can create significant investment returns for the physicians, but only if the lease terms are structured properly. It’s a balancing act to ensure both investments, the ASC operating entity and the real estate holding company, are successful.  With current real estate valuations for ASCs ranging from a 5% - 6% cap rate, which is the equivalent of a 16.5x – 20x multiple, it is important to consider and plan around a couple strategic variables in order to maximize value. 

Charles Dickens’ famous quote would aptly describe the past two years: “These are the best of times and the worst of times.”

These past two years have been the best of times because the industry is booming, with outpatient migration accelerating. Patients don’t want to go to hospitals and have recognized ASCs as a high quality, low cost, safe option for surgery.

Volumes are up across the industry, most notably in complex cases like total joint replacements. We had a record number of new projects (~250) announced in ‘21.

And it was the worst of times, given the fine people we lost along the way (like dear ASC friend Jon Trujillo) and the pervasively disruptive impact of COVID in all areas of our lives.  

Supply chain disruptions, staffing shortages, wage inflation, rising construction costs, changing regulations and more have all added complexity to our world.

Predictions

Attempting to predict the future is a fool’s errand. Indeed, I’m reminded of Plato’s famous quote from The Republic: “I am the wisest man alive, for I know one thing, and that is that I know nothing.”   

Despite that, a few trends are worth calling out: