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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Quarterly Insight, 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
Coronavirus Update
May 4, 2022 - Utilization Plummeted During First Year Of Pandemic
- Ambulatory surgery center utilization decreased 38% year over year in 2020, according to a March 2022 Fair Health report. Fair Health cites mandated facility closures and prospective patients' desire to avoid facilities when they were open. The decrease was not limited to ambulatory surgery centers. Utilization decreased 30% year over year in emergency rooms during 2020, 16% in urgent care centers, and 4% in retail clinics.
- The US Department of Health & Human Services (HHS) has renewed the Public Health Emergency (PHE) declaration for COVID 19 for another 90 days, beginning on April 16 (the date the PHE was previously scheduled to expire) and extending through July 15, 2022. Key regulatory flexibilities and emergency funding sources that are linked to the PHE include but are not limited to 1135 Waivers; Medicare and Medicaid rules regarding Medicare coverage of telehealth, supervision of medical residents, Medicare and Medicaid diagnostic testing, provider-based hospital departments, and the Medicare Shared Savings Program; flexibilities and funding sources established via the Families First Coronavirus Response Act and the CARES Act; and relaxation of certain federal HIPAA privacy and security rules.
- The US Supreme Court allowed a vaccine mandate to stand for medical facilities that take Medicare or Medicaid payments. "We agree with the Government that the [Health and Human Services] Secretary's rule falls within the authorities that Congress has conferred upon him," said the majority, writing that the rule "fits neatly within the language of the statute. After all, ensuring that providers take steps to avoid transmitting a dangerous virus to their patients is consistent with the fundamental principle of the medical profession: first, do no harm."
- The federal Equal Employment Opportunity Commission said that employees may be barred from the workplace if they refuse the COVID-19 vaccine. "Requiring a vaccine is a health and safety work rule, and employers can do that," said Dorit Reiss, a professor at the University of California Hastings College of Law. There are, however, some exceptions to a blanket requirement. A collective bargaining agreement may require negotiating with a union before mandating a vaccine. The Americans with Disabilities Act allows workers who don't want to be vaccinated for medical reasons to request an exemption.
- Medical experts are trying to determine when it’s safe for those who had COVID-19 to have elective surgery. Concerns about respiratory complications from anesthesia are a major factor, and covid may affect multiple organs and systems. Clinicians are still learning the implications of those issues for surgery. A recent study compared the mortality rate in the 30 days following surgery in patients who had a covid infection and in those who did not. It found that waiting to undergo surgery for at least seven weeks after a COVID-19 infection reduced the risk of death to that of people who hadn’t been infected in the first place. Patients with lingering covid symptoms should wait even longer, the study suggested.
- Pandemic-related payments to the largest hospital chains may have accelerated their acquisition plans by enabling them to purchase weakened competitors. Ascension, for example, a large faith-based system that received more than $1 billion in aid, said in March that it was investing in a partnership to buy surgery centers. The company said, however, that its investment funding in surgery centers predated the pandemic. Congress provided capital to hospitals that did not need it, according to Zack Cooper, a Yale health economist. “Regulators should really be looking at the transactions occurring.”
- The COVID-19 pandemic accelerated the move away from large traditional hospital institutions and expedited the move toward technology, telemedicine, and ambulatory surgery centers (ASCs), according to Elizabeth LaBouyer, RN, executive director of the California Ambulatory Surgery Association. The pandemic has likely accelerated even further the level of consumer acceptance for ASCs based on their desire to avoid hospital settings, she added. The ASC industry is likely to benefit from a lasting perception by both patients and physicians that ASCs don't pose the same risk of exposure to infection as a hospital setting.
- Video-based post-discharge visits were noninferior to in-hospital follow-up in terms of the proportion of patients returning for a hospital encounter within 30 days of discharge after low-risk surgery at an ambulatory surgery center, according to a study completed at Carolinas Medical Center in Charlotte, NC. Moreover, the virtual visits were typically about a half hour shorter than the usual in-person visit but still provided patients with the same amount of time actually spent with their surgeons. The improvement in successful follow-up was accompanied by significantly greater satisfaction among participating nurses and no drop in patient satisfaction.
- The Centers for Medicare and Medicaid Services (CMS) revised its guidance for allowing same-day, ambulatory surgical centers to temporarily certify as hospitals and provide inpatient care for periods longer than 24 hours before being required to transfer patients to an acute-care hospital. The update clarifies that ambulatory surgical centers need only to provide 24-hour nursing services when one or more patients are on-site instead of having nurses be present even when no patients are in the facility in order to achieve hospital certification. The actions are a response to reports from hospitals that they are running out of beds as a result of the surge in COVID-19 cases.
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