Surgical Care Affiliates

Surgical Care Affiliates, Inc.

Traded as	NASDAQ: SCAI S&P 600 Component
Industry	Healthcare
Predecessor	Surgical Care Affiliates (1982 to 1995) HealthSouth Outpatient Surgery Division (1995 to 2007)
Founded	2007
Headquarters	Deerfield, Illinois,[1]
Number of locations	205
Key people	Andrew Hayek, Chief Executive Officer Brian Mathis, Chief Development Officer Cory Roberts, Chief Financial Officer Rich Sharff, General Counsel Caitlin Zulla, Chief Administrative Officer
Products	Ambulatory Surgery Centers and Surgical Hospitals
Revenue	$2.1+ billion USD (2016) [2]
Number of employees	8,000 (2016) [3]
Website	www.scasurgery.com

Surgical Care Affiliates, Inc. (SCA), is one of the largest providers of Outpatient Surgery in the United States. Based in Deerfield, Illinois, the company has a network of more than 200 ambulatory surgery centers (ASCs) located in 35 states performing 1 million procedures a year.^[4] In March 2017, SCA joined the OptumCare division of Optum (part of UnitedHealth Group).^[5]

SCA creates partnerships between health plans, physician groups, and health systems, to acquire, develop and optimize surgical facilities.^[6] SCA's affiliated physicians provide a range of surgical services, including orthopedics, ophthalmology, gastroenterology, pain management, otolaryngology (ear, nose and throat, or ENT), urology, spine, cardiology, and gynecology, as well as other general surgery procedures.^[7]

SCA’s partners include large surgeon groups (e.g., OrthoCarolina, Illinois Bone and Joint, Jewett Orthopedics); large multi-speciality groups (e.g., Monarch Healthcare, DaVita Healthcare Partners, Austin Regional Clinic); and large health systems (e.g, Advocate Healthcare, Texas Health Resources, Memorial Care Health System).

SCA is a publicly traded company and its shares are listed on the NASDAQ Global Select Market under the symbol "SCAI".^[8]

On January 9, 2017, SCA and Optum (part of UnitedHealth Group) (NYSE: UNH) announced the two companies would combine.^[9] The agreement called for the acquisition of SCA’s outstanding common stock for $57.00 per share. In this agreement, SCA became part of the OptumCare platform, with Hayek and the SCA leadership team continuing forward as part of SCA and the larger OptumCare platform. The transaction closed in March 2017.^[10]

History

Origins
Surgical Care Affiliates was founded in 1982 by Joel Gordon in Nashville, Tennessee. Gordon had previously founded General Care Corp (NYSE: GCE) in 1969, a hospital company that was sold to Hospital Corporation of America (“HCA”) in 1980.^[11]
Subsequent to selling General Care Corp to HCA, Gordon partnered with Andrew “Woody” Miller, an HCA executive,^[12] and Jack Massey, a co-founder of HCA and American venture capitalist, to launch SCA.^[13] SCA raised capital by listing shares on the New York Stock Exchange and used the proceeds to acquire existing surgery centers and build new surgery centers, mostly in the southeast.^[14] From 1982 to 1995, SCA grew to approximately 67 facilities, with Ken Melkus serving as the CEO for most of that time.^[15]

Early Growth
From 1982 to 1985, SCA grew to approximately 67 facilities with Ken Melkus serving as the CEO for most of that time. HealthSouth acquired SCA in October 1995.^[16] The acquisition made HealthSouth the largest provider of outpatient surgery in the nation with a total of 126 surgery centers.^[17] HealthSouth acquired other surgery center companies, including ASC Network Corp and National Surgery Centers, and independent facilities during this period.^[18] In March 2007, HealthSouth announced that it would sell its surgery center division to TPG Capital (TPG), a large private equity firm.^[19]

SCA Today

In June 2007, TPG Capital acquired the assets of HealthSouth’s surgery division, effectively forming SCA as a new, stand-alone company.^[20] The company was named Surgical Care Affiliates, in recognition of the original SCA.^[21]
Current chief executive officer, Andrew Hayek, was hired in May 2008 as president and chief executive officer.^[22] Hayek had previously been president of a division of DaVita Healthcare Partners and had been president and chief operating officer of Alliance Healthcare Services.^[23]

SCA has grown significantly since 2009, including:^[24]

• Growing its portfolio to 205 facilities as of December 31, 2016
• Achieving a 13% compound annual growth rate (CAGR) in EBITDA-NCI (“Earnings Before Interest Taxes Depreciation and Amortization less Non-Controlling Interests”, a common industry profit metric) growth from 2014 through 2016.^[25]
• Generating $2.1 billion in system wide revenue in 2016.

Partnerships

Texas Health Resources
In October 2012, SCA partnered with Texas Health Resources leadership to design and execute on a surgical strategy in the Dallas / Fort Worth market. Together with community surgeons, the partnership has grown from two facilities to 15 facilities.^[26]

Monarch Healthcare
SCA is partnered with Monarch HealthCare, Orange County’s largest association of physicians in private practice.^[27] In 2011, Monarch HealthCare was acquired by Optum, UnitedHealth’s health services division.^[28] In February 2013, SCA entered into a joint venture partnership with MemorialCare Medical Foundation and Monarch HealthCare to optimize surgery in Southern California; the partnership now has 9 ASCs.^[29]

Advocate Health Care
In 2015, Advocate Health Care and SCA entered a joint venture to acquire and develop a surgery center network. Advocate Health Care was the largest fully integrated health care delivery system in the state of Illinois; the partnership currently has a total portfolio of 15 surgery centers, with more in development.^[30]

SwiftPath
In May 2016, SCA made an investment in SwiftPath, LLC, which develops evidence-based, rapid recovery protocols that enable surgeons to perform hip and knee replacements in an outpatient setting.^[31] The SwiftPath platform includes patient engagement and education, patient selection criteria, and peer-reviewed surgical techniques.^[32] SCA currently has 43 outpatient facilities performing total joint replacements.^[33]

Recognition

In 2015, SCA was named one of Becker’s ASC Review’s “Best Places to Work in Healthcare”http://www.beckershospitalreview.com/150-great-places-to-work-in-healthcare-2015/surgical-care-affiliates-15.html .

One World Surgery

SCA is the foundational corporate partner to the nonprofit One World Surgery.^[34] One World Surgery funds and operates an ambulatory surgery center located near Tegucigalpa, Honduras, on the grounds of a 2,000 acre orphanage (part of the Nuestros Pequeños Hermanos network) with more than 500 children.^[35] During week-long surgical medical mission trips to Honduras, US-based physicians, nurses, clinical and non-clinical personnel provide free surgical care to people who cannot afford or access care. The program partnered with the Holy Family Surgery Center.

References

External links

• Surgical Care Affiliates official website