Joint ventures between ASCs and hospitals or health systems are accelerating, with 59% of ASC leaders saying they would consider a strategic partnership in 2026, according to a VMG Health survey. But leaders who have been through the process caution that not every offer is what it appears to be on the surface.
Here are five red flags ASC administrators and executives say deserve close scrutiny before any agreement is signed.
1. The prospective partner has never operated an independent ASC model
Lacey Dyer, vice president of clinical operations for Surgical Investors and Advisors, said that one of the clearest warning signs is a hospital partner that claims ASC experience but operates only wholly-owned hospital outpatient departments under a fundamentally different model.
“We see a lot of benefits on the joint ventures with hospitals,” she said during an Oct. 17 panel at Becker’s 31st Annual Meeting: The Business and Operations of ASCs in Chicago. “There’s certainly pieces that they bring to the table, but some of the red flags we’ve had are when they come to the table saying, we do ASCs, but it’s a wholly-owned hospital ASC with a completely different model. The great partner that we had was one that we’ve developed multiple centers with. They sat at the table and they said, ‘We know what we do well, and we are hiring you because you have proven what you do well and [we’re] letting everybody do what they do well.'”
2. The agreement requires surrendering majority ownership
Jeffrey Flynn, administrator and COO at New York City-based Gramercy Surgery Center, said ASC leaders need to understand what a majority-stake arrangement means in practice and how it re-organizes facility control.
“A lot of [hospital systems] will walk in saying they need to be the 51% owner, and if you were looking to lose autonomy, that’s exactly what’s going to happen even if they tell you you’re going to run it,” he added.
Mr. Flynn noted that successful joint ventures in the New York metro area typically involve health system ownership stakes of 10% to 20%, with full majority control remaining with ASC owners. Michael Boblitz, CEO of Athens (Ga.) Orthopedic Clinic, drew the same distinction, noting that health systems often structure early partnership terms generously and then reduce compensation arrangements at renewal — making the initial ownership split the real long-term lever.
3. Stalling tactics or evasive communication during due diligence
A prospective partner that goes quiet, changes terms without explanation, or takes unusually long to respond during negotiations is showing you something about how they will behave after the ink is dry. Asizza Dorsey, COO at Los Angeles-based Advanced Pain Medical Group, told Becker’s that the communication patterns she sees during deal negotiations are rarely coincidental.
“In my experience [a red flag is] lack of communication,” she said. “Sometimes there’s stalling tactics that will happen, and it becomes very frustrating to figure out how they want to move forward … in my experience, it has been very challenging to move needles with uncommunicative partners, or people who maybe are not honest or genuine about why they want to partner. They may have an ulterior motive, and you need to make sure you vet that and figure that out before you sign anything.”
4. No clear exit strategy in the agreement
Partnership terms that look favorable today can become traps if physicians leave, the case mix changes, or the organizational relationship deteriorates. Eric Chappell, administrator for Orthopedic & Spine at Inverness, Colo., said the exit provisions of any agreement deserve as much scrutiny as the entry terms.
“Something to strongly consider is not only how the ASC is set up from a legal and operational standpoint, but also what the exit strategy looks like if the group or a large number of providers leave the ASC or the group,” he said. “That applies not only to a partnership with a health system but also for any ASC development company.”
Agreements that don’t define buy-sell mechanisms, valuation methodology, and triggering events with precision leave ASC owners exposed if the partnership sours or their ownership group changes composition.
5. Strategic alignment exists on paper but not in practice
Declarations of shared mission are not the same as operational alignment, Cathy Jones, CEO of Apex Spine and Neurosurgery in Suwanee, Ga., said true strategic alignment encompasses a specific set of practical factors that should be verifiable, not just stated.
“The most important aspect for a potential ASC partnership or joint venture with a hospital or health system is strategic alignment,” she told Becker’s. “Both entities need to share common goals, share patient care values and outcomes, and share long-term objectives. Strategic alignment includes everything from seamless operational integration, compliance and legal considerations, data sharing, decision-making and quality of services.”
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.