United Surgical Partners International, Inc. ("USPI") was founded in February 1998 by Don Steen and the investment firm, Welsh, Carson, Anderson & Stowe, to pursue the ownership and management of ambulatory surgery centers ("ASCs") in the United States; and the ownership and operation of private surgical hospitals in Europe. USPI believes that these strategies are synergetic because they both provide primarily surgical services. Bill Wilcox and several other managers that have collectively worked together in the past joined the company later in 1998.
USPI was established on the premise that there are opportunities for an experienced management group to develop a premier international surgical services company. USPI approaches the business of health care delivery with the philosophy that success will be measured by the satisfaction of the patients as customers, and also by the physicians who practice at these facilities as partners and clients.
United Surgical Partners International, headquartered in Dallas, Texas, has ownership interests in or operates 155 surgical facilities. Of the Company’s 155 domestic facilities, 93 are jointly owned with not-for-profit healthcare systems. The company also operates three facilities in London, England.
The basic elements of USPI’s domestic strategy are:
USPI enters a targeted market by acquiring or developing surgical facilities in partnership with local physicians and, wherever possible, with a local hospital or health system. USPI approaches potential hospital partners to joint venture their outpatient surgical operations with those of USPI or to jointly develop a network of ASCs throughout the health system's service area. Many hospitals want to offer outpatient surgery in a freestanding center in order to more effectively compete in retaining or attracting surgeons and managed care contracting to their facilities. The USPI/hospital joint venture enables the parties to leverage USPI’s management strengths to improve the surgical operations both in service and economic results.
USPI has established important joint venture relationships with large healthcare systems and hospitals across the country. These joint venture relationships are described in further detail on the following page.
Most of the ASCs in which USPI has an ownership interest are held in limited partnerships or limited liability companies in which interests have been sold to local physicians who are on the medical staff of the ASC. This includes many of the facilities that are operated through the hospital joint ventures described above. USPI has management agreements with each of the ASCs which provide for day-to-day management services for the ASC for a management fee that is a percentage of the net revenues of the ASC.
In addition to acquiring and developing individual centers in partnerships with area health systems and surgeons, in selected markets USPI expects to enter more joint ventures to manage outpatient surgery with and on behalf of large hospital systems. USPI intends to duplicate the Dallas/Fort Worth joint venture with Baylor Health Care System in other large markets.
USPI sees a great deal of opportunity in the United Kingdom because Europeans are increasingly accessing private healthcare facilities. In spite of the general availability of state-provided, universal healthcare in Europe, the desire for better care, service and privacy lead a significant number of European patients to purchase private insurance or to self-pay for private healthcare services. In fact, most European countries offer free health care through a national health system while encouraging private health care for those that can afford it. The progress of the private system is often inversely related to the perceived quality of the government system. USPI believes that its management expertise will improve the quality of care and level of service provided at the acquired facilities in these areas. The installation of improved management methods, the establishment of cost controls, and insurer contracting, as well as the provision of additional services needed by each community, are some of the steps expected to increase the profitability of each facility.