When NueHealth wanted to build an orthopedic ASC in Chicago’s southwest suburbs designed to take on financial risk for total joint replacement, Illinois law steered it away from building one from scratch.
Illinois is one of 35 states, plus Washington, D.C., with certificate-of-need laws, and its law covers new ASCs. So NueHealth, which has managed Oswego, Ill.-based Kendall Pointe Surgery Center since November 2020, worked inside an existing building instead.
“Everybody knows the CON needs to go away, but it’s still a CON state,” Daniel Tasset, founder, CEO and executive chairman of NueHealth, told Becker’s. “So we had to buy an existing facility, and then we had to retrofit it and redesign it in a way so that it could be ready to take the downside risk on an episodic bundle of total joint replacement.”
NueHealth hopes to build that bundle into a contract with HCSC, the parent company of Blue Cross and Blue Shield of Illinois, Mr. Tasset told Becker’s.
The result is a more than $3.5 million expansion and modernization, which Kendall Pointe announced Oct. 19. The 11,000-square-foot project added a fourth operating room, converted from a former procedure room, along with 15 patient bays, expanded sterile processing, and upgraded HVAC and medical gas systems. It adds capacity for more than 1,000 additional orthopedic procedures a year.
In states without CON, NueHealth builds from the ground up. Mr. Tasset pointed to a new center in the Kansas City area designed specifically for total joint and spine cases. He said the physical plant matters if a center wants to guarantee cost and quality to payers.
The company’s facility designs keep non-revenue-producing space, such as lounges, kitchens and dining rooms, to a minimum. Mr. Tasset said the three biggest cost drivers in a surgery center are salaries, wages and benefits; supply and inventory costs; and occupancy costs.
“If we’re going to guarantee our cost and we’re going to be competitive on the cost and guarantee that product, then you have to look at what the big cost drivers are in a surgery center,” he said.
Kendall Pointe had been a multispecialty center before its physician owners shifted it toward orthopedics. Xavier Simcock, MD, an orthopedic surgeon at the center, said the change let the surgeons replace arthroscopy equipment and implant systems for total shoulder and hip cases with equipment they chose themselves.
“We’ve been able to dictate directly what we want because we think it’s the best equipment, and it’s all brand new,” he told Becker’s.
Monthly patient questionnaires shaped the layout, said Jorge Chahla, MD, an orthopedic surgeon and vice chair of the Kendall Pointe board. Patients used to move from a pre-op area to the OR and then to a separate recovery bay, which meant moving their belongings and redirecting their families. Now each patient stays in one bay before and after surgery.
“It feels more of a ‘that’s your space’ type of thing, and patients really like that type of experience,” Dr. Chahla said.
The fourth OR also changes how surgeons schedule their days. Scott Sporer, MD, an orthopedic surgeon and chair of the Kendall Pointe board, said surgeons often run two rooms and alternate cases so one room can be turned over while they operate in the other. That was hard to do with only three rooms when several surgeons wanted to operate on the same day.
Kendall Pointe’s revenue grew 35% from 2024 to 2025. The center projects 60% growth in 2027, its first full year in the expanded facility.
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.
