Many ASC leaders say the industry’s biggest financial mistake is chasing volume at the expense of margin, and the data is proving them right.
“The biggest mistake ASCs are making right now is aversion to higher-acuity cases,” James Mitchell, MD, hip and knee replacement specialist at Oklahoma City-based Total Joint Solutions, told Becker’s. “Total joint replacement, spine surgery and cardiology procedures such as angioplasty, pacemaker placement, etc., can be done in the ASC setting. In fact, most elective surgery for healthy patients is going to transition to the ASC over the next five to 10 years.”
The warning is well-timed. Operating costs, including labor, implants and anesthesia, are rising faster than reimbursement, and payers are tightening requirements across the board. For ASCs still operating on a volume-first model, the math is getting harder to ignore, industry leaders say.
“One of the most significant challenges facing ASCs today is the continued reliance on a volume-driven operating model, rather than adapting to what has evolved into a highly precise, revenue-cycle-focused environment,” Judith Gary, executive director of Algonquin Road Surgery Center in Lake in the Hills, Ill., told Becker’s, “Denial rates are increasing, largely driven by deficiencies in coding accuracy and clinical documentation. At the same time, growing prior authorization complexity is delaying reimbursement and, in some cases, preventing procedures from occurring altogether. Compounding these pressures, operating costs — including labor, implants and anesthesia — are rising at a pace that outstrips reimbursement rates.”
Ms. Gary added that the reliance on volume-based decision-making over margin optimization is widespread.
“Many centers prioritize surgeon preference, historical case mix and full OR schedules, instead of focusing on which cases, payers and physicians contribute most effectively to financial performance,” she said. “Success is no longer determined by efficiency alone, but by ensuring the right procedures are performed at the right reimbursement levels. Top-performing centers demonstrate selectivity in case mix, discipline in payer relationships, and a consistent emphasis on margin optimization.”
The problem, several leaders say, is that volume can mask financial deterioration until it’s too late.
“When an ASC hits 80% utilization, leadership tends to celebrate, yet margins may be flat or compressing,” said Peter Bravos, MD, chief medical officer of Sacramento, Calif.-based Sutter Health Surgery Center Division. “The mistake is optimizing for volume instead of value capture. Case mix drift toward lower-margin work crowds out spine, total joint and complex ophthalmology, leaving real margin on the table.”
According to Scott Kulstad, CEO of St. Paul, Minn.-based St. Paul Eye Clinic, ASCs are “busy chasing volume but financially blind — doing more cases, adding higher-acuity procedures, or accepting more payer mix shifts without knowing true cost-per-case and net reimbursement-per-case after denials, carve-outs, implants and stipends.”
For Jack Dillon, CEO of Grand Rapids, Mich.-based Anesthesia Practice Consultants, the core problem is strategic, not operational.
“Many centers are focused on filling operating rooms, but in today’s environment — where labor, anesthesia and supply costs are rising faster than reimbursement — more cases do not necessarily mean better margins,” he said. “The critical question is no longer ‘How do we stay full?’ but rather, ‘Do we have the right cases and the right surgeons in our market to achieve our financial and operational goals?'”
The countermodel is already playing out at some of the largest ASC operators in the country, and it’s generating results that are hard to dispute.
At Tenet’s United Surgical Partners International, same-facility surgical cases were down by 0.3% in the first quarter of 2026, yet same-facility net revenue per case rose by 5.6%, driven by higher acuity and favorable service mix, resulting in same-facility revenue growth of 5.3%. Overall, USPI generated $484 million in adjusted EBITDA, representing 6% growth over Q1 2025. The pattern has held for several consecutive quarters: fewer cases, more revenue.
At Brentwood, Tenn.-based Surgery Partners, same-facility revenue increased by 6.3% in the third quarter of 2025, driven primarily by higher revenue per case, while surgical volumes grew only in the low single digits. Over the past several years, Surgery Partners has made orthopedics and total joints a centerpiece of its long-term strategy.
Mick Perez-Cruet, MD, professor and director of Oakland University William Beaumont School of Medicine’s Department of Minimally Invasive Spine Surgery and Spine Program, told Becker’s that the biggest financial mistake ASCs are making is taking on low-paying cases, such as general surgery or eye surgery, that do not adequately cover costs.
Leaders say the prescription is to build financial discipline at the case level, not the enterprise level.
Mr. Kulstad recommends running the center “like a portfolio of micro-businesses across service lines, not a single enterprise-wide profit-and-loss,” with a case-level contribution margin model built and updated monthly. He also urges leaders to treat payer contracting as a core competency — “not an annual event” — and to hire talent that protects it.
Dr. Bravos echoed the sentiment: “Volume fills rooms, but margin builds value.”
Michael Sheerin, CEO of Leawood, Kan.-based NueHealth, warned that growth initiatives frequently outrun financial discipline.
“ASCs sometimes add new service lines without fully understanding reimbursement, cost structure, denial risk or payer requirements — resulting in increased volume but declining profitability,” he said. “Successful expansion requires clear visibility into true margins, payer alignment before launch, controlled pilots and operational readiness. Without this rigor, growth can quickly become a financial liability rather than an asset.”
According to Mr. Sheerin, the most successful ASCs are “shifting from a volume-first mindset to one grounded in market discipline and case-level economics,” because “volume without alignment is no longer a viable strategy.”
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.