Health system and hospital interest in ASCs has shifted from cautious, hospital-based outpatient strategies to a more urgent push to follow surgeons into lower-cost settings.
Hospital and health system ownership of ASCs has nearly doubled in five years, according to Avanza’s Intelligence Hospital Leadership ASC Survey. In 2024, 82% of hospitals and health systems reported owning at least one ASC, up from 41% in 2019 and 48% in 2023.
Michael Sheerin, CEO of ASC management company Nuehealth, joined Becker’s to discuss this shift.
Editor’s note: This interview was edited lightly for clarity and length.
Question: How has the interest of health systems in ASCs changed in the last five years or so?
Michael Sheerin: Hospital outpatient departments have been the pacifier that health systems have offered the market, but the cost structure for HOPDs is really based on the hospital’s contracts. So there are some very expensive HOPDs. To some extent, I think that has been a workaround. Hospitals can look payers in the eye and say, “Yeah, these are outpatient cases, and we’re doing them in our outpatient facility,” but it hasn’t always lowered the total cost of care.
More recently, I’m seeing health systems recognize they’re going to need to be part of this movement — largely because their surgeons are making this move, and they want to move along with them. So I think it’s been a pull strategy, with surgeons bringing health systems along.
We believe ultimately most, if not all, are going to have to get on this ASC train, but it’s going to take some a little longer. It’s not sustainable to stay out. It’s about choice. Health systems want to be in employers’ portfolios of providers, but employers also want cost to be a real consideration. So there’s a balance. I don’t really envy the position payers are in, either, but they need to offer choice. And I think health systems have to recognize that if they don’t give that choice, they don’t want to be on the sideline looking in.
