How We Got Our Start

“Trust – a simple but an important word to the past, present and future of AMSURG. AMSURG was built on trust, succeeds because of trust and grows due to trust. Patients trust our physician partners to provide the highest quality of care, and our physician partners trust us to manage their ASC efficiently and ethically,” said Chris Holden, AMSURG president and chief executive officer and director. “The trust we all have in each other is really what makes AMSURG continue to grow as a successful company. Trust and ethics are the core values of the organization.”

In 1986, these values were the foundation for the company that would eventually become AMSURG. Co-founders David Manning, who retired from AMSURG as executive vice president and chief development officer in 2015, and Rodney Lunn, no longer with AMSURG, spent a year of Saturdays developing a business plan that centered on surgery center development. Then, with the business plan and a budget sketched out on an iced tea napkin, Lunn and Manning quit their jobs to pursue their entrepreneurship dream.

“AMSURG wouldn’t be here if my wife hadn’t trusted me when I told her I was quitting my job. It was her willingness to support my ideas that led to the development of Practice Development Associates (PDA), the company that became AMSURG. Without her, none of us would be here,” Manning said.

“We did what all the business books tell you not to do. We were fed up with our jobs, so we just left,” Manning said.

The original idea behind PDA was consulting. Manning and his partner would sell the concept of an ambulatory surgery center to a group of high-performing surgeons, and PDA would be a turn-key resource – taking the project from conception all the way through to construction, licensing and certification. In the end, the doctors would take over the surgery center and operate it while PDA moved on to the next consulting job.

“Consulting is good from the standpoint that if you get enough volume there is decent cash flow. Consulting is bad because you always have to find the next job. There is no hook; there is no equity for going forward,” Manning said.

Around the time that Manning and his partner realized the constraints of their consulting business, the duo started receiving phone calls from physicians who were previous clients. These physicians were finding it more difficult to operate their new centers and wanted PDA’s help.

“We started wondering if there was a way we could convert from strictly consultants to having an equity ownership position and providing ongoing management services,” Manning said.

In 1992, PDA looked around at different financing sources in order to grow their company. Finally settling on a group of local Nashville investors and Healthways, Inc. (at the time known as American Healthcorp), PDA began the transformation into AMSURG.

“The investors said you guys have proved you have a decent cash business, but we aren’t really interested in investing in a cash business. You need to prove to us that doctors will actually partner with you and share 51 percent of their income,” Manning said.

The investors gave Manning and his partner six months to put together five acquisitions and one development deal. If all the deals could be completed during the six month period, then the investors would fund the acquisitions – in turn funding AMSURG.

“We were about a month away from running out of time, and then some contacts in Nashville gave us a reference in Beaumont, Texas. Thankfully, Dr. Joe Holland trusted us and agreed to do the development,” Manning said.

“The investors and the initial funding were extremely important to AMSURG’s future. Our investors wanted us to succeed; therefore, they really gave us the ability to build our foundation and start growing.”

“Also, there was no precedent for company like AMSURG. If those six physician groups hadn’t trusted us with their businesses, AMSURG would have never got out of the starting block,” Manning said.

Off and running, AMSURG grew steadily over the next five years. Then in 1997, AMSURG spun-off from Healthways, Inc. as its own public company.