ASCs are winning the volume they lobbied for over decades, but holding onto margin is getting harder.
ASC growth is far from over, Terry Bohlke, CEO of Keystone Surgical Partners and a past president of the Ambulatory Surgery Center Association, said at an Oct. 29 panel at Becker’s 32nd Annual Business and Operations of ASCs in Chicago. He said ASC volume is expected to grow 20% over the next 10 years and revenue at least 70% to 80%, driven by rising acuity. Some analysts expect revenue to double, he added.
ASC volumes are projected to increase by 24% by 2036, according to an October report from Medicus Healthcare Solutions, with cardiovascular procedures expected to grow 29%, general surgery 17%, and orthopedics and spine 17%.
ASC volume is projected to rise 24% over the next decade, according to an October report from Medicus Healthcare Solutions citing Surgical Information Systems data. The report projects outpatient growth from 2026 to 2036 of 29% in cardiovascular, 19% in surgery (general surgery, ophthalmology, ENT and urology) and 17% in orthopedics and spine.
“The new era of ASC profitability is here, but it’s only for those prepared to embrace it and sophisticated enough to handle it,” Mr. Bohlke said.
Other panelists said cost pressure comes first. Elisa Auguste, administrator of Precision Care Surgery Center, an orthopedic ASC in Setauket, N.Y., said costs are rising faster than revenue. That leaves less room to fund growth.
“Being able to invest in new opportunities requires money,” Ms. Auguste said. Her center’s experienced operating room nurses earned about $50 an hour four to five years ago. They now average $61, and “are not going back down,” she said.
Medicare pay isn’t closing the gap. CMS cut its 2027 ASC payment update to 2.3% from the 2.4% it proposed, and the weight scalar turns even that into a pay cut for half of the 30 procedures that bring ASCs the most Medicare dollars.
Raghu Reddy, chief administrative officer of MiOrtho Surgery Center in Southfield, Mich., told Becker’s staffing, anesthesia and supply costs are rising faster than CMS’ forecast, so each “increase” is “really a margin cut.”
Nirav Shah, MD, medical director of three gastroenterology ASCs at U.S. Digestive Health, said during the panel that costs have climbed and reimbursement has fallen since the pandemic, even as more patients come through the door. His three centers perform more than 30,000 procedures a year.
“The hardest thing to contain is the labor cost because it just continues to rise,” Dr. Shah said.
Health systems in his Pennsylvania and Delaware market compete for the same staff. Dr. Shah said his group leans on culture to recruit when it can’t be the top payer.
Anesthesia has become one of the biggest constraints, Dr. Shah said. Even when physicians are available, anesthesia coverage limits how many rooms can run. He added that a partially used room no longer pays for itself.
Last-minute cancellations are also climbing. Dr. Shah said they have risen over the past two years for reasons his team can’t pin down.
“We can’t put a finger on it,” he said.
Greg DeConciliis, a 22-year ASC administrator in the Boston area, said the old playbook of filling rooms with any case no longer works. Staff and supplies cost more, so case selection matters more.
“It’s the right volume,” Mr. DeConciliis said. He urged leaders to review payer contracts, identify profitable cases and give OR time to the surgeons who bring them.
Mr. Bohlke said salaries, wages and benefits are typically the largest expense on an ASC’s income statement and also the most controllable.
“The problem is very universal, but the solutions are very ASC specific,” he said.
What leaders are doing now
Asked for one high-return step to take in the next 90 days, each panelist named a different one:
- Mr. DeConciliis: Cut waste, including inaccurate preference cards, opened-but-unused supplies and idle OR time.
- Mr. Bohlke: Adopt technology that automates paperwork and phone work.
- Ms. Auguste: Audit billing at least quarterly so documented work is fully captured.
- Dr. Shah: Hire a dedicated same-day scheduler and overbook schedules to absorb cancellations.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
