With nearly 2,000 ASCs under a partnership by a national operator, up from about 1,300 centers in 2011, the consolidation of ASCs has taken on a new path over the past decade and a half.
According to VMG Health’s 2025 M&A report, valuation multiples in the ASC space have stabilized around eight times operating income, signaling that the industry is maturing and building up merger and acquisition competition.
The emergence of private equity over the past few years has changed the way the ASC industry operates. While not at the 2022 peak of 424 private equity-backed healthcare deals, private equity firms were involved in nearly 300 physician medical group transactions in 2024.
As consolidation and M&A continue, smaller physician groups and facilities are likely to have a tougher time keeping up. That is something that Gregory Brennan, MD, a gastroenterologist based in Mansfield, Texas, has seen over the past few years in Texas.
“In the last one to two years in the Dallas-Fort Worth area there have been several physician transactions with both primary care and specialty groups,” Dr. Brennan told Becker’s. “I have seen both the formation of large multispecialty groups and the splinting off of others. I have definitely seen a trend in more primary care and internal medicine practices joining hospital groups or changing hands. I think in general it is harder for smaller practices to keep up with consolidation and remain independent.”
To adapt, independent ASCs are exploring strategic partnerships as opposed to a straight up sale, allowing them to retain some level of control and autonomy.
In a survey from VMG Health, 59% of independent ASCs would consider a strategic partnership. Working with a health system was significantly preferred compared to teaming up with a management company or private equity group.
The potential consequences for this increased PE activity for physicians are real, according to Marc Greenberg, MD, an orthopedic surgeon based in Baltimore.
“I think it’s probably the worst for physicians. As you lose choice, the ability of physicians to feel like they can leave and go somewhere else goes down,” Dr. Greenberg told Becker’s. “Employers take advantage of that. I think they’ll be stuck in worse jobs, and overall, pay will go down.”
