Ambulatory Surgery Centers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 4,500 ambulatory surgery center (ASC) firms in the US provide facilities and services to physicians to perform medical procedures that do not require an extended patient recovery period. Common services include eye procedures, endoscopies, biopsies, pain management treatments, and orthopedic procedures. Physicians have some type of ownership interest in about 93% of ASCs. Through joint ventures, hospitals have ownership interest in at least 28%.

Dependence upon Insurers

ASCs derive the majority of their revenue from third-party payers, including private insurers, managed care systems, and government sources, such as Medicare and Medicaid.

Legislation Targets Physician-Owned Centers

Amendments to Stark laws, which prohibit self-referrals for Medicare and Medicaid beneficiaries, limit growth opportunities and could significantly change ownership structures for ASCs.

Industry size & Structure

A typical ASC operates out of a single location, employs 35 workers, and generates $7 million in annual revenue.

    • The ASC industry consists of about 4,500 companies which employ 161,500 workers and generate $33 billion annually.
    • There are about 7,600 freestanding ASCs in the US. Of these, around 72% are Medicare-certified facilities.
    • Physicians have some type of ownership interest in about 93% of ASCs. Through joint ventures, hospitals have ownership interest in 28%. Only 3% of ASCs are owned entirely by hospitals.
    • About 25-30% of ASCs are owned by multiple facility chains.
    • Large companies include Amsurg, United Surgical Partners, Surgical Care Affiliates, HCA, NueHealth, and Surgery Partners.
                              Industry Forecast
                              Ambulatory Surgery Centers Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Mar 1, 2023 - President Biden Plans To End The Covid Public Health Emergency
                              • Pandemic-related waivers allowing acute care patients to be housed in non-hospital facilities including ambulatory surgery centers will end at midnight on May 11 if the federal Public Health Emergency for COVID-19 (PHE) expires as expected. The PHE also required Medicare Advantage plans to bill enrollees affected by the emergency and receiving care at out-of-network facilities the same as if they were at in-network facilities. This will also end once the public health emergency expires. Biden administration officials said that they plan to end in May all PHEs tied to the coronavirus pandemic. The PHEs were first implemented on January 27, 2020.
                              • Ambulatory Surgery Centers (ASCs) evaluating robotics programs face several implementation hurdles. The large fixed cost must be overcome before ASCs start making profit, so a minimum volume and payment per case is needed, according to Ronney Abaza, MD, FACS, Robotic Urologic Surgeon. Facility size factors including ceiling height and overhead clearance must be considered. CO2 must be supplied to the robots, and small tanks that can be placed inside a facility if there is no way to access larger external tanks must be changed more frequently. Hospital-based ASCs may have an advantage in the robotics space due to higher procedure volumes and ownership of facilities that can house robots more easily.
                              • Medical device companies are increasingly catering to ambulatory surgery centers (ASCs). They offer financing plans for equipment and even teams to help construct and design surgical centers. Medical device companies have also started offering per-procedure prices, leases, and payment plans for larger, pricier devices, such as surgical robots. Many hospitals have well-established budgets for purchasing capital equipment, but ASCs may look for more flexible financing options, according to Zimmer Biomet Chief Operating Officer Ivan Tornos. “Many look for cashless options to obtain capital equipment and services along with implant and disposable purchases to offset extensive costs required for future new builds, resulting in improved operational cash flow/preserved lines of credit as they ramp procedures,” Tornos said.
                              • Ambulatory surgery centers cost significantly less than hospitals while meeting the same level of care quality for patients who don't require hospitalization before or after surgery, according to the US Centers for Disease Control and Prevention. “It’s not that we don’t need hospitals in the world, we certainly do; it’s just a higher cost area to provide the same care you can provide in an ambulatory surgery center for the same quality, the same set safety profile and a lower cost to the patient,” said Dr. John Womack, an orthopedic surgeon. Dr. Womack estimates that a procedure done in an ASC can cost 30% to 40% than the same procedure done at a hospital-based setting. ASCs also allow for more specialized care and higher patient satisfaction rates because of smaller and more personalized teams, according to the American Academy of Orthopedic Surgeons. Ambulatory surgery centers (ASCs) perform over half of all US outpatient surgical procedures. They can expect to see greater volumes as the number of outpatient procedures increase an estimated 15% by 2028, according to Fortune Business Insights. Surgeries are projected to increase 25% at ASCs and 18% at both hospital outpatient departments and physician offices through 2032, according to healthcare consultancy firm Sg2.
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