Even as most ASCs remain independent, consolidation is picking up speed, fueled by health systems, payers and private equity firms seeking scale, steadier earnings and tighter alignment with physician practices.
The ASC market has become a magnet for health systems, payers and private equity. Ascension, Optum, Tenet and others are aggressively acquiring centers, and valuation multiples have stabilized at around eight times operating income, according to VMG Health’s 2025 M&A report.
Adam Berry, CEO of Woodbury, Minn.-based Summit Orthopedics, told Becker’s that while consolidation is increasing at the macro level, some markets are seeing a pendulum swing back toward independence.
“If you look at the broad brush, you’re going to see more consolidation,” Mr. Berry said. “But there’s so much geographic individualization that’s happening, because there are certain markets where we’re seeing people leaving the health systems and going to an independent market, or leaving the health system ASC and coming to an independent ASC.”
Summit Orthopedics, which has five centers in its portfolio, has opted to manage its ASCs in-house — a decision Mr. Berry said is possible because the organization is large enough to invest in the administrative expertise, data analytics and infrastructure needed to operate at scale.
“We don’t have to rely on consolidation to give us the scale — we can instead do it ourselves,” he said. “We have a very high level of sophistication to do it, but many other small and medium-sized orthopedic groups don’t yet have the ability to make that level of investment. So that’s what’s driving some of this consolidation — those physician groups that are in the solo-doctor up to maybe 30-doctor range. That’s kind of the sweet spot where there’s going to be a lot of consolidation.”
Jim Freund, managing partner at Physician Transaction Advisors, agreed the ASC industry will “continue to see consolidation,” though he said it will take multiple forms.
Some consolidation is happening within the ASC sector itself, he said, pointing to moves such as Ascension’s purchase of AmSurg and Tenet’s U.S. surgery center platform, United Surgical Partners International. Private equity firms, he added, “may not be the best operators out there — but are certainly amongst the smartest business people.”
Private equity’s strategy is also shifting. Instead of building standalone ASC platforms, firms are increasingly integrating ASCs into physician practice networks to capture more of the continuum of care. Minority stakes and add-on acquisitions are becoming more common.
“The devil’s in the details with private equity deals. There are significant trade-offs between liquidity, growth, capital and long-term autonomy when evaluating a buyout,” Tan Chen, MD, orthopedic surgeon from Danville, Pa.-based Geisinger Musculoskeletal Institute, told Becker’s. “Liquidity is often attractive, providing immediate capital that can ease financial pressures and facilitate investments in technology or practice expansion. However, accepting PE funding often comes with pressures for rapid growth and profitability, which can shift focus away from patient care toward meeting short-term financial goals.”
For some ASCs, private equity partnerships can bring scale, access to capital and help with physician recruitment.
“If they can combine that knowledge from a business perspective, but do it in a practical, common-sense way with people who truly understand how to run surgery centers, then you’ve got a recipe for a successful organization in this space,” Dr. Chen said.
