5 experts analyze the latest mergers and acquisitions trends impacting the ASC sector

In the evolving landscape of the ASC industry, transaction activity is taking on a new shape, influenced by varying strategies among private equity firms, health systems, and independent operators. Five industry leaders recently shared their insights on the current trends in M&A activities that are reshaping the ASC industry.

Shakeel Ahmed, MD, CEO of Atlas Surgical Group, emphasized the significance of Surgery Partners’ decision to walk away from Bain, indicating a long-term perspective on value creation. He highlighted the industry’s early stage of maturity, pointing out the shift of complex surgeries to outpatient settings, the rise of bundled payment models, and the increasing alignment of physicians. While private equity firms may perceive limitations, operators like Surgery Partners are focusing on expanding their outpatient real estate over the next 5-7 years to maximize enterprise value. Dr. Ahmed emphasized the importance of maintaining control over ASC businesses and avoiding partnerships with non-surgeon entities.

Nicholas Aubin, Co-founder and CEO of Commons Clinic in Los Angeles, outlined two prevailing M&A strategies expected to dominate the ASC space in the coming years. Major consolidators such as SCA, USPI, and multi-market hospital systems will pursue large-scale acquisitions to expand their footprint further. Additionally, a wave of venture and private equity-backed ASC platforms will seek acquisitions or liquidity events. The other side of the coin lies in recapitalizations and turnarounds to rescue underperforming ASCs.

According to Edward Dixon, Sterile Processing Manager of Surgery Center Mountain View in California, mergers and acquisitions are set to reshape the ASC landscape over the next five years, marking a notable shift from fragmented, independent operations to integrated systems. Hospitals and health systems are increasingly forming partnerships or acquiring ASCs to enhance their outpatient services, benefiting from economies of scale and improved supply chain leverage.

Dr. Richard Evans, Vice President of Surgical Services at Bon Secours Charity Health System in Suffern, New York, discussed the potential threats to ASC success. He mentioned the impact of ownership structure, particularly comparing ASCs owned by hospital systems versus independent practitioners. Hospital-owned ASCs have seen growth opportunities due to employed physicians driving cases to these facilities.

Allyn Wilcock, CRNA, Owner of Advanced Anesthesia Services and Northwest Healing and Wellness in Snoqualmie, Washington, observed the increasing presence of private equity firms and corporate entities like Optum in the ASC landscape. He emphasized the importance for independent ASCs to maintain financial and accounting standards while enhancing their value proposition to attract patients and surgeons. Forming partnerships with outpatient-focused anesthesia groups can improve outcomes and financial viability for independent ASCs in a competitive healthcare environment.