Surgical Care Affiliates Bought by UnitedHealth

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Surgical Care Affiliates Bought by UnitedHealth

Deerfield, Ill. -based Surgical Care Affiliates is merging with Optum, a health services company and part of UnitedHealth Group.

Surgical Care will become part of UnitedHealth's Optum business division, which covers services such as pharmacy benefits management (PBM) and health care services.

Surgical Care and its affiliates operate 205 surgical facilities in more than 30 states, including ambulatory surgery centers. The number of such centers across the country grew by 80 percent between 2000 and 2014, according to the Medicare Payment Advisory Commission.

No job cuts are planned and the SCA headquarters is expected to remain in Deerfield. SCA has about 8,000 employees nationwide, including about 70 in Deerfield. The company operates in the $70 billion Ambulatory Surgery Centers (ASC) industry, which is about 14% of the total surgery market in the US ($500+ billion), and is expected to grow in high-single digits going forward. Here's what Trump's policies mean for the future of health care. It also partnered in December with Advocate as a partial owner of the Midwest Center for Day Surgery.

Surgical Care, based in Deerfield, Illinois, rose 16 percent to $56.45 at 11:38 a.m.in NY, after earlier hitting their highest-ever intraday price.

The deal, for a mixture of cash and stock, substantially expands the health-care provider footprint of UnitedHealth UNH, -0.28%, which is already the parent of the biggest USA health insurer, UnitedHealthcare.

Surgical Care Affiliates is expected to generate $1.5 billion in revenue in 2016 at a growth rate of over 20% year-over-year, per Reuters' compiled consensus estimates. UnitedHealth shares were down less than 1 percent to $161.61.

IL has 122 Medicare-certified ambulatory surgery centers, according to the Ambulatory Surgery Center Association.

When surgeries are done in a hospital, they are more expensive and health insurers see inpatient procedures as a big share of total healthcare costs that needs to be reigned in, analyst say.

Larry Renfro, vice chairman of UnitedHealth Group and Optum CEO, said in a release he looks forward to working with SCA and insurers to "implement care models that reward independent surgeons and specialists for quality and care efficiency".

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