What ASCs are doing instead of consolidating

The healthcare industry is increasingly consolidating as operation costs soar — physicians are migrating to employed models and private practices are being bought up by larger entities. 

Despite the consolidation, the ASC industry has remained fragmented, with independent surgery centers remaining in the majority as the driver of low costs. 

Seventy percent of freestanding ASCs are independently owned and operated, according to VMG Health's "Annual Healthcare M&A Report 2022." This number has remained relatively flat even throughout the COVID-19 pandemic. Seventy-two percent of ASCs were independent from 2020 to 2021, according to prior VMG Health reports.

Additionally, it's in the best interest for payers and healthcare as a whole for ASCs to remain independent. Healthcare prices rise when ASCs and physician practices are bought by hospitals or corporate entities

Physician medical groups, on the other hand, are increasingly consolidating. There were approximately 461 deals announced in the sector in 2021, a 145 percent increase from the 2020 volume, according to the report. 

The ASC industry was shaped by a series of "mega-mergers" made between 2015 and 2018, according to VMG Health's report. These mergers, however, are less common than in other sectors of healthcare. The ASC industry is instead characterized by smaller buy-ups as ASC companies opt for smaller ASC chains to amass market share quickly. 

Additionally, hospitals see ASCs as a major opportunity for growth, but instead of investing in existing centers, they are opting to develop ASCs internally.

Many leaders predict the ASC industry will continue to consolidate to some degree. But because the industry is built on independent centers, it is unlikely that the consolidation will keep up with other sectors.

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