
One of the most significant, sector-shaping trends in health care is the migration of care out of the traditional hospital and into lower-cost outpatient settings. Ambulatory surgery center (ASC) market growth reflects this idea.
In light of this overarching theme of care shifting into non-traditional settings, the ASC industry has entered into a period of rapid change and fast-paced growth that’s certain to extend into 2025.
More private equity investors will turn their attention to surgery centers, with more hospitals investing in ASCs, too. And because the U.S. health system is seeking to move care into more cost-effective models, the list of approved procedures for ASCs will likely continue to expand.
As this happens, technology will redefine what’s possible, more consumers will demand a better experience, and new payment arrangements will gain traction, especially those that fall under the broad umbrella of value-based care.
ASC News explores the trends that we believe will play key roles in the year ahead below.
ASCs will see expanded coverage for outpatient procedures
Over the past five years, many procedures have transitioned to ASCs due to advancements in medical technology, changes in reimbursement policies and a focus on cost-effective care delivery.
Total knee and hip replacements, for example, are increasingly performed in ASCs due to advancements in minimally invasive techniques and other operational advancements. More routine and diagnostic procedures for gastrointestinal conditions have jumped to ASCs, with more ophthalmology procedures moving to outpatient surgery centers as well.
This trend is already guaranteed to continue next year, as the U.S. Centers for Medicare & Medicaid Services (CMS) added nearly two dozen procedural codes to the ASC covered-procedures list in its final payment rule for 2025.
ASC News sees CMS taking a more aggressive stance on moving procedures to ASCs in 2025 rulemaking for 2026 under the Trump administration.
It is also likely that commercial payers will expand coverage of surgeries and procedures in ASCs, as insurers look to contain rising costs.
While all sorts of procedures will trickle down to ASCs, the trend will be driven by higher-acuity procedures, in particular.
Higher-acuity volumes will continue to rise, led by cardiovascular procedures
Years ago, it would have felt like a stretch to regularly perform advanced and complex procedures in the outpatient setting. But that’s exactly what’s happening with greater regularity.
Cardiovascular procedures migrating to ASCs has been a prime example of that.
“Cardiology did a phenomenal job of gathering data to prove these procedures can be safely done in an ASC setting,” Dr. Samuel Jones, a cardiologist with the Chattanooga Heart Institute, previously told ASC News.
Another example: complex spine procedures.
Regulatory changes from CMS and technology advancements, including the use of precision robotics, have fueled this trend.
“Laminectomy, for example, which involves decompressing the spinal cord or dura below the spinal cord, was typically done only in hospitals,” Michael Burdi, an orthopedic spinal surgeon with Community Orthopedic Medical Group and California Specialty Surgery Center, previously told ASC News. “Thirty years ago, nobody would have considered doing it at an outpatient center. Gradually, CMS started allowing those codes there. A few years later, instrument fusions, such as putting metal or pedicle screws into the spine, became possible.”
More ASCs have been growing their higher-acuity volumes, but there are plenty of challenges with this strategy.
Recruiting and retaining highly skilled staff – including surgeons, anesthesiologists and nursing teams – capable of handling complex surgeries can be challenging. What’s more, investing in advanced surgical equipment, such as robotics and imaging systems, and ensuring facilities are designed to accommodate higher-acuity cases is capital-intensive.
Longer operating room-turnover times and payer hurdles can also pose difficulties.
Even so, ASC News fully expects to hear about more ASCs launching specialities around cardiovascular procedures and complex spine surgeries in 2025. And plenty of ASC leaders agree.
“High-acuity cases will increasingly be performed in ASCs by 2025, as patients demand these services in a more convenient, lower-cost setting,” Dr. Shakeel Ahmed, CEO of Atlas Surgical Group, told ASC News in our recently published executive forecast. “Payers will also be incentivized and gain confidence in our setups.”
Investors will jump-start consolidation
The ASC landscape is still a fairly fragmented one. Yes, there are large players and national chains, but there’s a robust and vibrant community of independent centers as well – many of which are thriving.
But health care investors that sat on the sidelines in 2024 are desperate to get back into the game, and physician groups with ASC ties or ASCs themselves are appealing targets. That, in turn, could fuel consolidation.
Here’s what we know about private equity activity in 2024 and 2025.
In 2024, PE-led M&A activity was relatively flat because of global unrest, inflation and rising interest rates. There was also a dealmaking frenzy in 2021, which then drove up valuations and made some sales processes extremely competitive.
At least 409 health care buyout deals occurred in North America and Europe, excluding add-on deals, in 2024, according to Bain & Company. In comparison, in 2021, at least 515 were buyout deals.
In 2025, PE firms are sitting on an exorbitant amount of dry powder – cash that they need to deploy or risk returning to their individual investors. So after a modest 2022, 2023 and 2024, ASC News expects investors to swing big in 2025.
Meanwhile, as investors are becoming more eager – and likely more aggressive – to get deals done, ASCs are still facing a lot of the same headwinds. There are regulatory hurdles. There are staffing challenges. Operating costs remain high. Younger surgeons are sometimes less inclined to buy into an ASC compared to previous generations.
In short, independent ASCs could be more open to selling.
Another option, of course, is a strategic partnership or joint venture.
This prediction of more consolidation from ASC News is somewhat contrarian. Other forward-looking industry surveys actually suggest transaction activity involving independent ASCs may be minimal.
Of those surveyed as part of VMG Health’s annual leadership survey, for instance, just 6% of respondents said they anticipated engaging in independent ASC sale activity in 2025. The vast majority – 84% – said they did not plan on sale activity this year.
Still, more than half of the independent ASC respondents said they’d consider a strategic partnership in 2025. Of those, 57% said they’d prefer to work with a health system, 30% said they’d like to work with PE, and 28% said they’d like to work with a management company.
Ultimately, consolidation is happening throughout health care. It’s just a matter of time before ASC consolidation accelerates.
An improved macroeconomic and regulatory environment will fuel new developments
The timeline for developing a new ASC can vary depending on a variety of factors such as regulatory requirements, market dynamics and project complexity. A broad estimate for the timeline from market identification to opening is between 18-36 months.
Several factors have impacted new ASC development in recent years, contributing to slower timelines.
Stringent Certificate of Need (CON) requirements in some states created bottlenecks, for example, with some proposals facing extended review periods or rejections.
At the same time, the lingering effects of global supply-chain disruptions led to delays in procuring building materials and surgical equipment.
The construction industry has also faced challenges in securing skilled labor, delaying project timelines. New projects have also routinely had to navigate unexpected rising costs for materials and labor.
The high interest rates of recent years have also made securing capital for ASC projects more expensive from the start, prompting developers to delay or scale down new builds from what they originally envisioned.
ASC News foresees new developments picking up in 2025, however, with many of the aforementioned factors improving or becoming less of a barrier.
Already, the ASC industry has seen a gradual walking back of state CON laws – a trend likely to continue under a pro-business Trump administration. South Carolina, North Carolina, Tennessee and George have either changed ASC-related CON laws or plan to in the not-too-distant future.
Effective Nov. 21 of this year, there will no longer be a requirement to obtain a CON for ASCs located in counties with a population more than 125,000 people. CON laws for ASCs in Tennessee are set to sunset in December 2027.
On the capital side, lower interest rates will make new projects more affordable. If more PE players become active in the ASC space, that could jump-start new developments as well.
ASCs will be recognized for embodying health care consumerization trends
Some of the major undercurrents influencing the U.S. health care system include value-based care, moving care outside of brick-and-mortar facilities and digital-centric models. Another important trend is the consumerization of health care.
In the simplest of terms, consumers of health care services crave a better experience. They want price transparency. They want choice. They want comfort. They want patient-centered care and faster recovery times. They want a streamlined process.
ASCs check all of these boxes, and ASC News believes that centers will be increasingly recognized for that in 2025.
When it comes to price transparency, more ASCs are experimenting with – or fully embracing – the strategy of sharing standardized costs with consumers. The Surgery Center of Oklahoma has implemented this approach with resounding success, according to co-founder Dr. Keith Smith.
“A $3,000 procedure at my facility is a $30,000 procedure in Miami, Idaho or California,” Smith previously told ASC News.
In terms of those other must-haves for consumers, they’re calling cards for ASCs. The fact that ASCs often specialize in select procedures puts them at an advantage compared to hospital-based competitors, which may have to share resources and serve different masters.
Additionally, many ASCs focus on patient education, offering clear information about procedures, risk and benefits to support informed decision-making. ASCs can often operate more like retail businesses, too, with an emphasis on efficiency, customer service and a welcoming environment.
“[Patients like that they don’t] have to park in a huge parking lot, catch a shuttle to the hospital, go through outpatient registration, and then proceed to the new hospital for surgery,” Dr. Arthur Valadie, a board-certified orthopedic surgeon and physician president for Coastal Orthopedics, previously told ASC News.
“They come back to the front door, head upstairs, check in at the surgery center for operation,” he added. “They can sleep in their own bed that night.”
In 2025, health care will be further defined by consumerization – and ASCs will lead the charge.
New payment models, revenue streams will take root
As of 2024, less than 20% of the nation’s Medicare spend was tied to value-based models, according to data from Grand View Research. CMS officials have stated they want to eventually have all Medicaid and Medicare beneficiaries in value-based payment programs.
In the commercial sector, it’s trickier to pinpoint that portion of payments allocated under value-based care models. One analysis from the Health Care Payment Learning and Action Network APM Measurement Effort found that the commercial sector has the lowest percentage of payments in any type of alternative payment model.
A 2023 report from the same organization found that 24.5% of all payments are on a two-sided risk model.
Actual health care providers will likely say value-based care progress is much lower.
In the ASC setting, some examples of value-based care include CMS bundled payment programs and private-payer bundles, where a payer might partner with ASCs for bundled pricing on procedures like cataract surgeries or colonoscopies, incentivizing cost-efficient care.
Another value-based care avenue for ASCs is the shared-savings route – collaborating with payers or health systems to reduce costs while maintaining or improving quality, keeping some savings generated if goals are met.
Based on what we’ve heard from industry insiders, ASC News expects more value-based care opportunities to arise in 2025.
“The continued shift of procedures from hospitals to ASCs – driven by advances in minimally invasive techniques, patient preference and payer incentives – will expand demand, particularly in orthopedics, cardiology and spine surgeries,” Geri Eaves, CEO and administrator of Bone and Joint Institute of Tennessee Surgery Center, told ASC News in our executive forecast. “Bundled payments and value-based arrangements with large corporations will further highlight the efficiency and quality outcomes ASCs can deliver.”
Employers will also become a bigger payer for ASCs, ASC News expects.
“We have hundreds of contracts with self-funded employers in the United States, all of whom fly their employees to Oklahoma City to have their surgery and waive all of their out-of-pocket expenses,” the Surgery Center of Oklahoma’s Smith told ASC News.
Hospital ASC investment activity will remain high
Hospitals are increasingly investing in ASCs for several strategic and financial reasons.
For starters, ASCs typically have lower overhead costs compared to hospital outpatient departments (HOPDs), resulting in reduced charges for the same procedures. Operational efficiencies for ASCs are also greater compared to HOPDs.
Hospitals also know that payers and patients both increasingly want what ASCs offer – convenient care at a lower price point. Investing in ASCs can also give hospitals new revenue streams, help them differentiate themselves in competitive markets, and attract physicians and clinical staff, among other advantages.
Avanza Healthcare Strategies explored hospital-ASC investment trends in its Annual Hospital Leadership ASC Survey. Of the health care leaders that took part in the survey, 90% of them said they planned to grow their ASC portfolios moving forward.
With all of that in mind, ASC News is confident that this trend will continue in 2025.