Here’s what five ASC leaders have told Becker’s recently about how they are approaching joint ventures today, what pitfalls they see and where the opportunities lie.
Jennilee Caffey. Regional Administrator, Baylor Scott & White Sports Surgery Center, The Star (Frisco, Texas): Ambulatory surgery centers enter the coming year facing their most pressing challenge: a widening financial imbalance between reimbursement and operating costs.
While Medicare and commercial payers have provided only modest reimbursement increases—and in some cases actual reductions and bundling—the cost of operating a center continues to climb. Staffing and anesthesia remain particularly difficult, with wage competition driving up expenses and many centers now paying stipends to secure anesthesia coverage. Rising supply and equipment expenses, fueled by inflation, further tighten margins that are already narrow.
Independent centers feel this pressure most acutely, lacking the economies of scale available to joint venture facilities. Inflation-driven cost increases, operational inefficiencies, credentialing delays, and prior authorization hurdles compound the challenge, eroding both efficiency and financial stability. For many centers, partnering with a proven industry leader such as USPI can provide the scale, resources, and operational expertise needed to weather these headwinds and sustain growth.
Trina Cole. Administrator of St. Luke’s Surgicenter Lee’s Summit (Mo.): If your payers are willing to consider carveouts for procedures that can easily be performed in the ASC setting, that is something to consider. Our ASC is a joint venture between a host hospital, physician investors and a management company. Our contracts are negotiated by the hospital system. This is a wonderful benefit for us. However, I have found that on occasion, it is beneficial for us to request additional review on procedures that are being performed at other ASCs that have not been included in our contracted coverage. I would say our success rate with this is roughly 50%.
Mark Langston. Chief Development Officer at Compass Surgical Partners (Raleigh, N.C.): One of the biggest red flags [in a joint venture] is health systems who see viability as “a foot in two canoes” — wanting a great ASC strategy but not fully committing to the strategy for various reasons.. This requires an all-in strategy with a single partner across a defined geography.
It doesn’t mean pulling every case from hospitals into ASCs, but it does mean sitting down to decide what needs to move, because health plans are requiring it. Otherwise, revenue in HOPDs will be impaired. Site neutrality is here, every health plan is moving in that direction and it is the reason our inbound outreach from health systems is up 500% over the last 12 months.
Green flags: systems with strategy, clarity and readiness. There are five or six “signs of readiness” we look for before launch, like managed care strategy, physician engagement and clear decision-making. If those are in place, execution is much more successful.
Time kills deals, so we align our process with health systems’ processes to run simultaneously. Clear decision-makers are critical. Without them, deals lose momentum and die.
Shobhit Minhas, MD. Orthopedic Surgeon, Fox Valley Orthopedics (Geneva, Ill.): The biggest headwind ASCs will face in the year ahead is preserving healthy financial margins in the face of rising operational costs. Expenses such as staff wages, supply chain disruptions, equipment pricing, and overall overhead continue to increase. Meanwhile, CMS reimbursement for ASC procedures has experienced only modest growth and remains insufficient to keep pace with inflation and escalating costs. Addressing these challenges will require a strong focus on improving operational efficiency, maintaining exceptional standards of care, and using clinical outcomes and cost-efficiency data to demonstrate value to payers. Exploring strategic partnerships or joint ventures with third-party entities may also play a key role in strengthening financial sustainability. Despite these pressures, ASCs remain essential providers of high-quality, cost-effective surgical care, and I believe they are well-positioned to become the “crown jewels” of surgical healthcare delivery in the years ahead.
Travis Messina. CEO of Regent Surgical (Nashville, Tenn.): Many people avoid asking the critical questions. When we meet a potential partner, they often ask, “Why should we pick you?” We pause and ask what they want to accomplish. Before selling a solution to a problem they may not have, we want to understand their goals. We’ll be very straightforward about whether we’re the right partner.
That upfront transparency helps align goals. If you don’t define or measure success, you can’t improve. So, we create long-term strategic plans right at the outset. Each year we update, but before any partnership, we need to know their enterprise objectives and whether we can advance them. You can have the greatest ASC, but if it doesn’t fit their ecosystem, it won’t work.
