HealthEast Surgery Center - Maplewood, Maplewood, MN

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Project Snapshot

Project Type: ASC Re-Syndication and Management

Region: Central

Project Size: 12,678 SF Multi-specialty 4 ORs, 1 procedure room

Project Services:

  • Market Assessment
  • Strategic Planning
  • Feasibility Assessment
  • Re-syndication
  • Transition
  • Operations Management

HealthEast Care System is the largest healthcare provider in the Twin Cities’ East Metro area with four hospital campuses in metro St. Paul.

In 2007, HealthEast met with Health Inventures (HI) to review and plan for the system’s future ambulatory joint venture strategy. During the meetings, the group identified seven opportunities for hospital-physician collaboration. The opportunities included existing Ambulatory Surgery Centers (ASCs) and potential de novo opportunities at HealthEast sites.

HI conducted a comprehensive market assessment in 2007.  Maplewood Surgery Center, an existing, licensed ASC, was identified as the most immediate opportunity for collaboration.  Maplewood was 100% owned by HealthEast Diversified Services, Inc., a subsidiary of HealthEast. Maplewood is a four-OR, one-procedure room ASC, that was operating at 73% capacity in a 12,678 usable square foot facility. The ASC is attached to St. John’s hospital, a HealthEast affiliate. 

Fair market value was developed by a licensed valuation firm; HI conducted physician interviews and generated financial projections based on the current facility operations and physician feedback. The Department of Health re-approved the facility as an ASC at the State and Federal level in the month of July 2007.

A steering committee reviewed and approved the Operating Agreement, Private Placement Memorandum (PPM) and Subscription Agreement.

The offering closed with 14 physician investors from six medical groups. Sixty-two physician units (or 10.3%) were issued ownership.

Maplewood, LLC has entered into a long-term management services agreement with Health Inventures while payer contracting services will be purchased from HealthEast.


HI owns a minority equity interest in the ASC.

Project Accomplishments:
  • Health System Partnership
  • Speed to Market
  • Joint Venture Strategy
  • Outpatient Surgery Center

 

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