The Business Corner is a bimonthly column by Shakeel Ahmed, MD, CEO of St. Louis-based Atlas Surgical Group. This is the third installment.
Intestinal arteriovenous malformation are blood vessels that can cause a slow bleed. Not enough to be noticeable, but enough to inflict long-lasting damage.
I was a little melodramatic in my previous column, painting a grim picture of the ASC landscape. We are all aware of the big elephants in the room — rising labor costs, anesthesia shortages, and reimbursements that seem to be running opposite to inflation. All that is the “what” of our current predicament. Now let’s talk about the “who.” Specifically, the surgeons that walk through our doors every morning.
For half a century, the ASC model was built on a simple bedrock: efficiency. We told our surgeons they could do more cases in less time, with better equipment and fewer bureaucratic headaches than at the local hospital. That promise held up for a long time. But, and I speak from experience, the profit margins have tightened from the 30% range to razor-thin single digits, and efficiency alone is not enough to keep the fires burning. And that is where I’m starting to see a glaring disconnect, a widening gap, between the mindset of the “user” of an ASC and the “owners” of an ASC.
This discordance follows the standard principles of economics. When a surgeon, any surgeon but specially the non-owner, views the ASC merely as a high-end workshop, he will focus on his block time and his specific tray preferences. He will not see the $400 implant that could’ve been a $200 equivalent with no change in value of service to the patient. He will not notice the three-person nursing overlap caused by a late start. When the going was good, we, the facility, could absorb these small leakages. Today, these leakages are the difference between a distribution and a capital call.
I warn all the ASC owners. The third pillar of survival in the current economy is not just being savvy about your nursing pay or negotiating better contracts; you will have to keep the surgeon’s brain engaged as a team member if you want to be profitable in this dangerous market.
I have been part of countless discussions, both in private and in boardrooms, with surgeons complaining about the lack of distributions while simultaneously insisting on using a proprietary suture that costs four times the market average because “that is what I am comfortable with.” But what they don’t realize is that, in an ASC, that’s coming directly out of their own pocket. We will have to stop shielding our partners from the “ugly” side of profit and loss.
At our Atlas franchise, I have found that transparency is the best medicine for entitlement. When surgeons see the line-item costs of their specific cases compared to their peers, the competitive nature that got them through med school kicks in. Suddenly, they are looking at the waste bin more than looking at the clock. Suddenly, their comfort level with the new suture increases.
Times have changed. We have entered an era where clinical excellence remains the baseline, but fiscal stewardship is the requirement for success. If you want to keep your independence, and avoid the “hospital takeover” I warned about previously, you will have to move past the era of the surgeon as the guest. More importantly, the surgeon will have to move past that era. It’s time to remind them that they’re not just a talent anymore; they are the ones paying for the stage. Take heed, the most profitable ASCs of 2026 won’t necessarily be the ones with the most cases. It will be the ones where the surgeon treats every pack of 4×4 gauze like it’s his own money. Because quite frankly, it is.
Those intestinal AVMs are sneaky beasts. You won’t notice the loss until it’s too late.
