Surgical Care Affiliates
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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 210 ambulatory surgery centers (ASCs) in 35 states performing 1 million procedures a year. Since March 2017, the company is part of Optum.
|Traded as||NASDAQ: SCAI|
S&P 600 Component
|Predecessor||Surgical Care Affiliates (1982 to 1995)|
HealthSouth Outpatient Surgery Division (1995 to 2007)
|Founded||2007 in Birmingham, Alabama|
Number of locations
|Tony Kilgore, CEO|
Mark Langston, CDO
Caitlin Zulla, CFO & CAO
Rich Sharff, General Counsel
|Products||Ambulatory Surgery Centers and Surgical Hospitals|
|Revenue||$1.3 billion USD (2016) |
Number of employees
SCA creates partnerships between health plans, physician groups, and health systems, to acquire, develop and optimize surgical facilities. 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.
In 2015, SCA was named one of Becker’s ASC Review’s “Best Places to Work in Healthcare”.
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.
Subsequent to selling General Care Corp to HCA, Gordon partnered with Andrew “Woody” Miller, an HCA executive, and Jack Massey, a co-founder of HCA and American venture capitalist, to launch SCA. 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. From 1982 to 1995, SCA grew to approximately 67 facilities, with Ken Melkus serving as the CEO for most of that time.
From 1982 to 1985, SCA grew to approximately 67 facilities with Ken Melkus serving as the CEO for most of that time. HealthSouth Corporation acquired SCA in October 1995 and soon after closed the Nashville office which had been consolidated to the company's surgery division office located at the HealthSouth Corporate Campus in Birmingham, Alabama. The acquisition, along with several previous surgery center company acquisitions, made HealthSouth the largest provider of outpatient surgery in the nation with a total of 126 surgery centers. HealthSouth acquired other surgery center companies, including ASC Network Corp and National Surgery Centers, and independent facilities during this period. In March 2007, HealthSouth announced that it would sell its surgery center division to TPG Capital (TPG), a large private equity firm.
In June 2007, TPG Capital acquired the assets of HealthSouth’s surgery division, effectively forming SCA as a new, stand-alone company. The company was named Surgical Care Affiliates, in recognition of the original SCA, and headquartered in Birmingham where the company continues to maintain its operations center and largest employee base.
Current chief executive officer, Andrew Hayek, was hired in May 2008 as president and chief executive officer. Hayek had previously been president of a division of DaVita Healthcare Partners (now Optum) and had been president and chief operating officer of Alliance Healthcare Services.
SCA has grown significantly since 2009, including:
- 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.
- Generating $2.1 billion in system wide revenue in 2016.
Texas Health ResourcesEdit
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.
SCA is partnered with Monarch HealthCare, Orange County’s largest association of physicians in private practice. In 2011, Monarch HealthCare was acquired by Optum, UnitedHealth’s health services division. 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.
Advocate Health CareEdit
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.
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. The SwiftPath platform includes patient engagement and education, patient selection criteria, and peer-reviewed surgical techniques. SCA currently has 43 outpatient facilities performing total joint replacements.
One World SurgeryEdit
SCA is the foundational corporate partner to the nonprofit One World Surgery. 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. 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.
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