In a deal that would create the largest provider of ambulatory surgery in the United States, Tenet Healthcare and United Surgical Partners International (USPI) will combine their ambulatory and short-stay surgery centers in a deal that will give Tenet the option to buy USPI over the next 5 years.

The joint venture will have ownership interests in 244 ambulatory surgery centers, 16 short-stay surgical hospitals and 20 imaging centers in 29 states. It will maintain the USPI brand, as well as USPI's 3-way partnership model with physicians and not-for-profit health systems.

Tenet will pay $425 million to private equity firm Welsh, Carson, Anderson & Stowe and other USPI shareholders and assume $1.5 billion of USPI's debt for a 50.1% stake in the venture.

Dallas-based USPI operated 219 short-stay surgical facilities in 27 states as of the end of last year, 154 of them jointly owned with large health systems. The company had revenue of $641 million last year.

Three companies are now vying to be the biggest ASC company in the market. AmSurg has about 250 surgery centers and Surgical Care Affiliates operates 185 surgical facilities.

Dan O'Connor