ASCs are expanding rapidly as procedural capabilities grow and health systems seek lower-cost, high-quality alternatives. At Becker’s 31st Annual Meeting: The Business & Operations of ASCs, leaders from Vizient and Sg2 shared insights on how ASCs can deliver strong clinical outcomes while managing rising costs and preparing for future reimbursement changes.
Here are five key takeaways from the discussion:
1. ASC growth is disrupting hospital outpatient volumes.
Tony Guth, senior intelligence director at Sg2, outlined how ASCs are capturing a growing share of surgical cases once performed in hospital outpatient departments. This shift is driven by CMS phasing out the inpatient-only list and expanding the ASC-covered procedures list.
“The procedural scope is growing and growing,” Mr. Guth said. “Hospitals are really good at operating hospitals, but they’re not very good at operating a freestanding ambulatory facility like an ASC. This is something I’m paying attention to as more and more new market entrants get into the ASC space — it gets more fragmented and it gets more competitive.”
As ASCs proliferate and add more complex procedures, hospitals are being forced to rethink their surgical strategies and explore joint ventures with independent physicians. Mr. Guth emphasized that many health systems are “behind the eight ball” and eager to partner with nimble, independent ASCs.
2. Partnerships with physicians are fueling ASC expansion.
Allen Passerallo, vice president of category management for orthopedics at Vizient, noted that integrated delivery networks are increasingly partnering with physicians to develop freestanding ASCs — not just new HOPDs. He highlighted a recent case in North Carolina where one IDN acquired 30 ASCs to stay competitive.
“Strategies are shifting even for the acute care hospitals, but primarily the ASCs that have been out there for a long period of time, have challenges with reimbursement and are looking for some type of relief,” Mr. Passerallo said, adding that he’s observing a growing trend of hospitals partnering with physicians to lower costs and improve quality in the ASC setting.
He also cited pressure from Medicare Advantage plans, some of which require that 20% of surgical volume be performed in ASCs rather than HOPDs, further incentivizing health systems to adapt.
3. Cost structure challenges are growing as complexity rises.
As higher-acuity cases move into ASCs — particularly in orthopedics — operational overhead is rising. Costs related to anesthesiology, sterilization and staffing continue to climb. Mr. Passerallo explained that reimbursement often does not reflect these rising costs, pointing to a total knee replacement (DRG 470) that might be reimbursed at $9,000 in a freestanding ASC compared to $13,000 in an inpatient setting.
To address this, Vizient has launched an orthopedic contracting program that aggregates ASC purchasing power. The initiative delivers between 22% to 55% savings on hip and knee implants via supplier standardization, compliance measurement and rebate structures.
4. Physician engagement drives cost-saving behavior.
Vizient’s program is built on physician decision-making, recognizing that surgeons are often majority owners of ASCs and more attuned to cost implications than their hospital-employed counterparts.
“When we surveyed surgeons, 60% said they’d switch implants if they could save 15% or more,” Mr. Passerallo said. “Coming from the acute care world, that’s a big step.”
Through detailed clinical attribution and robust evidence review, Vizient standardizes high-cost implants without compromising outcomes, offering a scalable model for other specialties beyond orthopedics.
5. Modular ASC construction offers speed and financial flexibility.
In response to rising demand, Vizient is also exploring innovative approaches to facility construction. One such solution is a modular ASC facility designed to accelerate build time and improve cash flow. The unit — complete with operating rooms, equipment and furnishings — can be built and installed in 12 months and is depreciated over seven years instead of 29, offering a potential 45% depreciation in year one.
“If you’re looking to start your ASC, it’s a great opportunity for consideration,” Mr. Passerallo said.
With reimbursement changes looming, particularly site neutrality legislation, ASCs and health systems alike must adopt sustainable strategies that balance cost control, quality care and long-term growth.
