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

                              Nov 1, 2022 - Industry Leverages Cost Advantages
                              • Ambulatory surgery centers (ASCs) 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.
                              • Private insurers have taken their lead from Medicare and are now pushing more and more joint replacements into ambulatory surgery centers (ASCs), according to Matthew Bates, managing director at health-care advisory firm Kaufman Hall. “It’s a convergence of market forces,” Bates said. “We can do it safely. We can do it cheaper. Patients have a better experience. Doctors, surgeons tend to prefer it. Insurers are encouraging it.” Rick Gundling, senior vice president for health-care financial practices at the Healthcare Financial Management Association trade group cited “improved anesthesia, more effective pain control, less invasive surgical techniques, and better post-operative care management” as key drivers of Medicare's decision to remove these procedures from a list of surgeries that the giant government health insurer for older Americans would only pay for if they are done in a hospital.
                              • Ambulatory surgery centers (ASCs) perform more than half of all US outpatient surgical procedures, and 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.
                              • 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 October 13 (the date the PHE was previously scheduled to expire) and extending through January 11, 2023. 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. HHS will provide states with 60 days notice prior to the termination of the PHE.
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