From block time hoarding to implant cost blindness, there are many factors that drive the gap between a busy ASC and a profitable one, and beneath them sits a harder problem operators are only beginning to name.
An ASC can run at full capacity and still lose money. That disconnect, a packed OR schedule that doesn’t translate into margin, has become one of the most persistent frustrations administrators raise about the surgeons they partner with.
But Daniel Decker, MD, co-founder of Vitality Plus Urology Clinic in Mountain Home, Ark., told Becker’s that there’s a cost underneath the cost: asking surgeons to weigh profitability alongside clinical judgment, case after case, is starting to take a toll that looks less like inefficiency and more like injury.
Block utilization data backs this up. According to HST Pathways’ 2024 State of the Industry report, block time utilization across 590 ASCs in 47 states ranged from a high of 59.6% in gastroenterology down to just 35.1% in orthopedics and 17.7% in general surgery, meaning the majority of allocated block time in some of the highest-revenue specialties sits empty.
Layer on cost pressure. Labor costs have risen 25% to 60% in many markets, even as reimbursement holds flat or declines. A full schedule against that backdrop can still post a loss.
Elisa Auguste, administrator of East Setauket, N.Y.-based Precision Care Surgery Center and vice president of the New York State Association of ASCs, pointed to block time as one of the clearest examples of a surgeon habit that quietly caps a center’s upside.
“Holding onto block time ‘just in case’ hurts the bottom line,” she said. “If another high-volume surgeon can fill that time, let them. The center wins, and so do you as an owner.”
Implant spend is the other wedge that shows up in conversations about ASC margins, and it’s structurally harder to see coming.
Implants “often require an immediate, high-cost purchase, while payer reimbursement is delayed and frequently reduced, bundled or denied,” Peter Bravos, MD, chief medical officer of Sutter Health’s Surgery Center Division, told Becker’s.
Tammy Smittle, RN, CEO of Austin, Texas-based Stonegate Surgery Center, described the tension as one of relationships versus discipline, not clinical need versus cost-cutting.
“Many surgeons have long-standing relationships with implant reps and vendors they trust — and those relationships absolutely matter for clinical confidence, efficiency, and outcomes,” she said. “But in today’s reimbursement environment, implant costs can quickly erase ASC margins, especially in orthopedics and spine where reimbursement is often fixed while supply costs continue to rise.”
The fix, she added, comes from getting surgeons and administration to look at the same numbers.
“The most successful ASCs are not the ones that eliminate physician choice — they are the ones where surgeons and administration work together to understand the financial impact of implant selection, standardization opportunities, and pricing transparency,” she said.
Paul Lynch, MD, founder and CEO of Scottsdale, Ariz.-based US Pain Care, told Becker’s that “revenue is vanity; margin is sanity. The biggest blind spot I see with surgeons is the assumption that a busy OR is a profitable OR. It isn’t. A center can run at full capacity and still lose money if the case mix carries the wrong cost structure.”
Block time and implant spend are fixable with dashboards and standardization committees, while the moral injury that Dr. Decker described is not.
“A profitable ASC is not necessarily aligned with what is best clinically at an ASC,” he said. “The common theme across all specialties in ASCs is that case selection matters for profitability more than clinical outcomes.”
That means a surgeon’s clinical decisions often have to factor in payer contracts, vendor contracts, prior authorizations and peer review timelines.
“In an age of medicine with what seems to be an exponentially expanding range of clinical variables to balance, the added ‘profitable considerations’ could compound burnout and moral injury,” Dr. Decker said. “ASCs, which often are outlets for increased physician/surgeon autonomy, could create an opposite effect if profitable ASC concerns solely prevail.”
That distinction matters. As Jessica Jackson, PhD, a psychologist and clinical strategy manager for mental health equity at Modern Health, wrote in a Becker’s Hospital Review viewpoint, moral injury runs deeper than burnout: it’s what happens when clinicians “perpetrate, bear witness to or fail to prevent an act that transgresses” their own deeply held standards.
A study published in JAMA Network Open in March evaluated the “moral distress” of 5,741 physicians and 3,501 other U.S. healthcare workers from Oct. 19, 2023, to March 5, 2024. It found the mean moral distress score among physicians was 3.29 on a 0-to-10 scale, with 39% reporting a score higher than 4.
“Moral injury is distinct from burnout. Burnout says ‘I’m exhausted,’ while moral injury says ‘I know what this patient needs and I’m structurally prevented from providing it,'” Craig Bailey, MD, internal medicine physician with Detroit-based The Bailey Medical Group, told Becker’s. “The fix isn’t more physician resilience; physicians are already resilient, and telling them to be more so is its own small insult. What has to change is structural: Physicians need to recover the authority that matches their responsibility, which takes both sovereignty, owning the tools, data, and infrastructure that let you act on judgment without asking permission, and collective power. Those aren’t in tension; sovereignty is what makes solidarity credible, because physicians can stand together far more effectively when each of them can also stand alone.”
The workforce data suggests that conflict is already pushing physicians toward the exits. A study published May 20 in the Journal of the American College of Surgeons found that among 224,629 surgeons, 15,753 left clinical practice over a median of eight years, a cumulative attrition rate of 9.7%. Annual attrition held steady between 1.5% and 1.7% from 2013 to 2018, then rose sharply in 2020 — likely tied to a wave of pandemic-era retirements — before returning to the earlier trend.
ASCs were built, in part, as a setting where physicians could reclaim the autonomy hospitals had stripped away. Dr. Decker’s point is that the same profitability logic squeezing hospital-employed physicians can quietly reappear inside the ownership model meant to fix it, if “profitable ASC concerns solely prevail” over clinical judgment.
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.
