Adam Berry, CEO of Woodbury, Minn.-based Summit Orthopedics, told Becker’s he expects 2026 to be the point where macroeconomic pressure collides with a maturing ASC market, with patient demand slowing and expense management becoming a defining competency.
Mr. Berry joined Becker’s to discuss the signs he is monitoring with respect to a demand slowdown and where ASCs should tighten costs first.
Editor’s note: This interview was edited lightly for clarity and length.
Question: You described 2025 as the point where a maturing ASC market collides with macroeconomic pressure. What signs are you watching to know if patient demand is slowing down?
Adam Berry: There are a couple of different variables we’re going to look at within our market. A couple of things we’re going to look at are: What’s the primary care referral base looking like?
Number one, is the primary care base independent or are they hospital employed? And then, even irrespective of that, just what’s happening with our trends overall with them? Are we seeing year-over-year changes with any of those particular referral sources? Because that’s going to be a leading indicator for us for where that patient demand is going to go.
Secondly, we have an occupational medicine business that gives us a good lens on what the job economy is going to look like, because our occupational medicine business does pre-employment screenings and a lot of that kind of workforce, “work athlete,” if you will. We’re able to follow the trends around what’s happening with hiring patterns and what that says about the overall state of the economy, because I think that has an influence on macroeconomics. If there’s not a lot of job hiring going on, then there’s going to be that slowdown in patient demand if they don’t have jobs or that insurance. So I think that’s another variable that we’re looking at.
And then the third one is just what’s happening with patient deductibles. One component is: what’s the size of the deductibles? But secondly, when they come in, have they already met their deductibles and therefore they’re looking for “free care,” or are they early on in the spending of their deductible, so they’re just a little bit more judicious about how they’re going to be spending their healthcare dollars?
Q: With expense management being the defining competency, as you said, what would you say are the three most important cost areas ASCs should tighten?
AB: Well, if you just kind of do the math from highest to lowest expense: First, we’re starting off with labor. For us, what we’ve tried to do is scale ourselves up in that we have five ASCs. What we do is real-time staffing: If we need to close down one facility to keep the other four open, and we only have staff for four, then we’ll try and consolidate down.
That’s really important at times when you have low physician demand. That could be big vacation seasons, whether that’s holidays, holiday weeks or otherwise. So from a labor standpoint, that’s going to be our top one.
Secondly, in the world of musculoskeletal, it’s all about the implants and the components that are going into the surgical implant conversation. So it’s making sure that you have maximized and understood what you’re doing on the actual raw cost of the product.
And then the third area I would say, which is kind of a combination of the first two, is: Where are you coming up with efficiencies and standardization? So for us, we want to standardize all of our pans. We want to standardize all of our kits and sets and everything else so that we can minimize the training and education that our staff need for all the surgical cases, for all of the workflows. That helps us with labor costs and supply costs if we can standardize as many things as possible. So that would probably be the third area — even though it’s not a line item that shows up on a profit and loss statement, it’s still a key area.
