Bob Herman Mar 23
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Health care sees dollar signs in surgery centers

Sue Ogrocki / AP

The health care deals that grab the most attention involve pharmaceuticals, insurance or hospitals. But there's quietly been massive consolidation among ambulatory surgery centers — outpatient facilities where physicians perform routine procedures, such as elbow or cataract surgeries, and get patients back home in less than a day.

Why there's been a buying spree: More care is being done in the outpatient setting, since it's less expensive than getting the same care inside a hospital. Yet, surgery centers are very lucrative because they don't handle emergency procedures. The business model resembles a high-profit assembly line: Schedule as many quick, elective surgeries as possible, mostly for people who have better-paying commercial health insurance. Here are some telling 2016 figures from the biggest surgery center chains, according to each company's latest financial filing:

  • Envision Healthcare (260 surgery centers): 31% operating margin on $1.3 billion of revenue
  • Surgical Care Affiliates (197 surgery centers): 19% margin on $1.3 billion of revenue
  • Surgery Partners (99 surgery centers): 17% operating margin on $1.1 billion of revenue

Surgery center companies often jointly own their facilities with local hospitals, but they've also become targets for big players looking to cash in on the outpatient trend. UnitedHealth Group, the parent company of the largest health insurer in the country, scooped up SCA in a $2.3 billion deal. Hospital chain Tenet Healthcare bought United Surgical Partners International in 2015, mimicking how HCA has built up its surgery center fleet. AmSurg was a large surgery center chain until it agreed to merge with Envision last year.

Expect more activity: There are 5,500 ambulatory surgery centers in the United States. Financial analysts with Barclays estimate half are not owned by a chain, leaving "ample room" for deals.

Steve LeVine 2 hours ago
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Self-driving lab head urges freeze after "nightmare" fatality

Uber self-driving car in Pittsburgh. Photo: Jeff Swensen / Getty

Carmakers and technology companies should freeze their race to field autonomous vehicles because "clearly the technology is not where it needs to be," said Raj Rajkumar, head of Carnegie Mellon University's leading self-driving laboratory.

What he said: Speaking a few hours after a self-driven vehicle ran over and killed a pedestrian in Arizona, Rajkumar said, "This isn't like a bug with your phone. People can get killed. Companies need to take a deep breath. The technology is not there yet. We need to keep people in the loop."

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Palestinian president calls U.S. ambassador "son of a dog"

Abbas speaks in Ramallah. Photo: Issam Rimawi/Anadolu Agency/Getty Images

Palestinian President Mahmoud Abbas personally attacked U.S. ambassador to Israel David Friedman today, calling him a "son of a dog" during a speech at his Fatah party meeting.

Why it matters: This is another escalation in Abbas's rhetoric against the U.S. since President Trump's Jerusalem announcement. In another speech two months ago, Abbas went on a personal attack against Trump himself and told him to "go to hell".