For years, consolidation in the ASC space meant private equity or health systems buying up facilities and squeezing out physician autonomy in the process. But something has shifted, according to Benjamin Stein, MD, orthopedic surgeon and co-founder and chairman of Bethesda, Md.-based Capital Surgical Solutions.
Dr. Stein watched the M&A landscape evolve from the outside. As an independent who never pursued the consolidation path, he has a particular vantage point on what has changed, what is coming and why the next wave of growth in the ASC space may look less like a takeover and more like a partnership.
Editor’s note: This interview has been edited lightly for clarity and length.
Question: As an independent who chose not to be part of consolidation in the traditional sense, what’s a recent M&A trend in the ASC space that has surprised you?
Dr. Benjamin Stein: You’re seeing behaviors on the M&A side — whether it’s insurance carriers that own ASCs, health systems, or VC/PE — all of them are looking at how to thread the needle with the right physicians for these facilities in a manner that keeps it a healthy system and keeps surgeons engaged.
What surprises me is that, compared to five years ago, consolidation hasn’t gone away — it’s just being done in a much more thoughtful manner that still maintains autonomy for the surgeons. I hope that trend continues. I think that is the healthiest sweet spot. There’s obviously economic context that has influenced things in recent history, but overall, that trend is really positive — and it has surprised me somewhat, just how quickly I was seeing it in the marketplace.
Q: Any predictions for the next five years with that shift?
BS: A lot of this flows down from Medicare. As regulatory changes happen, there’s a downstream effect, and the massive thing starting this year — the IPO list, which will be fully unlocked for musculoskeletal by 2027 — is driving continued focus and growth in the ASC landscape. Health systems are pivoting their strategies accordingly, and independent physicians and surgeons are making sure they’re well -positioned.
By proxy of all that, you’re just going to see continued growth and continued broadening of procedures done in these settings. It will look very different in five years. You’ll look back and see not just total knee replacements, but revision total knee replacements. Not just traditional cervical spinal fusions, but lumbar ones. Obviously, very complex cases will remain hospital based, but the ones that are more routine will just be done in ambulatory surgery centers — whether they’re physician-owned, JV or health system.
Beyond musculoskeletal, I think the five- to 10-year wave is cardiac. That’ll take longer; there’s the upfront cost, the acuity, the fact that patients and cardiologists have a different comfort threshold. But similar to what we’ve seen before, as these things are unlocked from a regulatory perspective, different forms of care and supporting technologies will develop. Costs will reset to accommodate that venue, and you’ll get cardiologists and patients increasingly comfortable. That’s what will ultimately drive that migration. It has to be the people doing the procedures really feeling comfortable, and that’s why it’ll take a bit longer.
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