By Allen Passerallo
The rapid growth of ambulatory surgery centers (ASCs) represents one of the most significant shifts in U.S. healthcare delivery.
As procedures once confined to hospitals—such as total joint replacements and spine surgeries—move into outpatient settings, ASCs are becoming a cornerstone of value-based surgical care. But while the growth trajectory is undeniable, financial sustainability for ASC operators is far from guaranteed. Success requires more than capturing market share—it demands operational rigor, supply chain discipline and strategic alignment.
Market growth meets financial pressure
The ASC market is expanding at a compound annual growth rate of nearly 7%, with projected spending increases of $22 billion over the next seven years. Orthopedics is a leading driver, with procedure volumes projected to grow 24% over the next decade, according to Sg2.
Several forces are fueling this momentum: payer pressure to reduce costs, removal of inpatient-only procedures by Centers for Medicare and Medicaid Services as well as rising consumer demand for lower-cost, high-quality outpatient options.
Yet, the economics are fragile. Freestanding ASCs are reimbursed at lower rates than hospital outpatient departments. Supply and labor costs are also continuously on the rise. Physician influence on device selection in ASCs is significant, with about 70% of physicians making purchasing decisions.
Operational efficiency
While ASCs offer efficiency and cost savings to payers, providers must balance unpredictable costs, variable reimbursement and increasing competitive pressure. To thrive, ASC leaders should focus on operational discipline. For example, lean workflows, optimized scheduling and staff cross-training are essential. Every inefficiency erodes margins.
Another opportunity is clinical standardization. Reducing unnecessary variation, particularly in high-spend categories such as orthopedic implants, is critical for both quality and cost control.
Supply chain as a growth lever
Supply chain optimization is emerging as a critical success factor for ASCs managing more complex surgeries. A few key tactics stand out, such as aggregated pricing.
Pooling orthopedic implant spend across multiple ASCs, having a strong sourcing process that focuses on clinical quality, allows smaller centers to access volume-based discounts for the latest technology, ensuring consistent pricing whether a site spends $100,000 or $2 million. Suppliers benefit from predictable volume, while ASCs gain access to competitive pricing on clinically-vetted products.
These strategies not only reduce costs but also stabilize operations, giving ASCs the financial breathing room to reinvest in technology, staffing and growth initiatives.
Actionable insights for ASC leaders
To navigate this evolving landscape, ASC leaders should prioritize the following strategies:
- Medical device standardization
With orthopedics representing one of the largest and fastest-growing ASC service lines, leaders can reduce cost and maintain quality by standardizing hips, knees, spine and trauma implants to significantly reduce unnecessary variation and improve margins. - Leverage group contracting power
Smaller ASCs should tap into collective contracting opportunities to level the playing field against larger systems and ensure access to competitive pricing. - Build strong supplier partnerships
Move beyond price-focused negotiations to create risk-sharing relationships. Prioritize compliance and transparency, which benefit both providers and suppliers in the long term. Trusted supplier relationships—not just transactional purchasing—are now differentiators. - Anticipate policy and market shifts
Keep a close eye on reimbursement changes, site-neutrality policies and emerging service lines like cardiology. Early movers who adapt their ASC strategy stand to capture market share before competitors, while managing cost implications for the business.
Looking ahead
ASCs that embrace operational discipline, pursue supply chain innovation and commit to clinical standardization will be positioned to deliver on the promise of value-based care: lower costs, higher quality and better patient experiences. Those that hesitate risk falling behind in a market that’s only becoming more competitive.
Allen Passerallo is vice president of category management at Vizient, where he leads contracting and category management strategies for orthopedics and neuro-physician preference items, with a focus on cost management in ambulatory surgery centers(ASCs). He brings extensive experience in healthcare supply chain, sourcing and value analysis, with prior leadership roles at Johns Hopkins Health System and Cleveland Clinic. Allen holds an MBA from Indiana Wesleyan University and a Bachelor of Science in Sports Medicine from Mercyhurst University.
