Ardent Executives Look Beyond Urgent Care in Outpatient Plans
After striking deals for a total of 27 urgent-care centers over the past year, the leaders of Ardent Health Partners Inc. are planning other forms of ambulatory expansion while keeping an eye out for system acquisitions.
Nashville-based Ardent, which went public last summer, earlier this month announced the acquisition of 18 urgent-care sites—six in New Mexico, a dozen in Oklahoma—from NextCare Urgent Care for an undisclosed sum. That deal came after the purchase last year of nine clinics in East Texas and Kansas that also served to expand Ardent’s network in those markets.
Speaking at the recent 43rd Annual JPMorgan Healthcare Conference, President and CEO Marty Bonick said his team wants to keep expanding in its eight mid-sized markets—where it runs 30 hospitals and more than 200 other sites of care—as well as grow into new ones. The company has about $850 million in liquidity to put to work toward that goal and ambulatory expansion is high on the priority list since it has a share of only 3 percent of ambulatory revenues in its markets versus 21 percent of hospital revenues.
“The next focus that we expect to see is around ambulatory surgery center growth,” Bonick said at the JPMorgan conference. “We know there’s opportunity for additional centers. Those are likely to be more on the de novo side […] given the current trading multiples of those assets. But we do know that we’ve got physician interest and demand as well as the patient growth to support that.”
More urgent-care growth also is in the cards and Bonick said that could come in the form of other acquisitions or de novo development. He also mentioned that freestanding imaging centers and emergency departments as well as microhospitals are avenues for network growth.
Bonick and his team will look to emulate the success of Ardent’s urgent-care push in East Texas in terms of growing its patient base. Bonick told the JPMorgan conference that 45 percent of the people in last year’s acquisition were new to Ardent. Within 30 days of the deal, he added, 15% of the patients of those clinics had scheduled follow-up care with other Ardent providers.
“We had about 150,000 admissions [last year] but treated over 1.2 million people,” Bonick said. “That’s key to our consumer strategy in terms of how do we grow the numerator […] through whatever modality works for them—whether that’s in-person care in a hospital, outpatient care in a facility or a virtual-care environment.”
Shares of Ardent (Ticker: ARDT) were changing hands at $14.06 in midday trading Jan. 21, down from their recent levels of roughly $16, the price at which they went public. Investors sold off the stock after Bonick and CFO Alfred Lumsdaine noted, among other things, in the runup to the JPMorgan gathering that physician services cost increases have persisted longer than previously expected. With the stock at roughly $14, Ardent’s market capitalization is right around $2 billion.
