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Surgery Partners Buoyed by Specialty Case Growth, Physician Recruitment and ASC Additions

May 12, 2025 by Shelby Grebbin

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Gastrointestinal case growth led the way for Surgery Partners (Nasdaq: SGRY) in the first quarter of 2025, contributing to strong surgical volumes and a solid start to the year.

While a heavier GI mix placed modest pressure on average reimbursement rates, overall case growth remained strong, with orthopedic procedures and de novo expansion also fueling momentum across the platform, Surgery Partners CEO Eric Evans said during a May 12 earnings call. 

“GI case volumes are exceeding our long-term growth algorithm,” Evans said. “We really like our GI and ophthalmology business, and they continue to grow nicely.”

Overall, Surgery Partners reported $776 million in net revenue for the quarter, up 8.2% year over year. 

“We performed over 160,000 surgical cases in the quarter, up 4.5% from 2024,” Evans said. “Our orthopedic case volume grew 3.4%, and total joint procedures jumped 22% year over year.”

Nearly half of the company’s ambulatory surgery centers (ASCs) now perform total joint surgeries.

Additionally, about 80% are equipped to handle higher-acuity orthopedic procedures, Evans said. Surgery Partners deployed 68 surgical robots to support those efforts and to improve recruitment of surgeons who are high performers, he added. 

Nearly 150 new physicians joined Surgery Partners facilities during the quarter, with new recruits generating 14% more revenue per provider compared to last year’s cohort, Evans said. He also briefly addressed Bain Capital’s non-binding proposal to acquire the company, which was submitted in January.

“Bain has been a long-standing investor in Surgery Partners and a valued partner over the years, with representation on our Board,” Evans said. “As we noted in our press release on Jan. 28 and our fourth quarter earnings call, our board formed a special committee of independent directors that are not affiliated with Bain Capital to consider this proposal, with the help of leading independent financial and legal advisors.”

Surgery Partners will not be commenting further on the matter unless or until there is a material update, he added. 

Same-facility revenue increased 5.2%, driven by 6.5% case growth. But that was slightly offset by about 1% in rate pressure. The offset was due to the higher proportion of GI procedures and strong growth in newly opened de novo centers, which often carry lower average reimbursement, Evans said.

“GI case volumes are exceeding our long-term growth assumptions,” Evans said. “While they drive top-line volume, they also bring lower average rates. This is expected and in line with our internal projections.”

What’s more, Surgery Partners continues to build out its network, having opened eight de novo centers in 2024 and maintaining 10 more in development. These centers skew toward orthopedics and other higher-acuity specialties, Evans said.

In terms of M&A, the company completed five surgical facility acquisitions this year. After having spent $55 million in Q1, Surgery Partners target is targeting $200 million in M&A spending for the remainder of 2025. 

CFO Dave Dougherty said he sees a robust pipeline ahead.

“Our balance sheet is in great shape,” Dougherty said. “We’re sitting on over $600 million in liquidity and expect leverage to continue trending down toward our long-term target of 3 times or less.”

Executives also addressed investor questions about payer mix and commercial rate trends, stating that payer relationships remain strong and they haven’t seen a material change in contracting dynamics. 

“Patients prefer us because of their experience, their outcomes,” Evans said. “Doctors prefer us because of our efficiency, and they can be at the table. And of course, payers prefer us because we are the low-cost alternative. They continue to be very constructive with us. … There’s nothing that’s really changed in those negotiations.”

While regulatory uncertainty remains a key concern across the ASC sector, Surgery Partners said its exposure to Medicaid and exchange-based plans is under 5%, and the company sees no near- or mid-term supply chain risks related to global tariffs.

Evans reaffirmed the company’s original 2025 full-year guidance of $3.3 billion to $3.45 billion in revenue.

“We’re proud of the strong start to 2025,” he said. “The ASC landscape continues to shift in our direction, and we’re well positioned to capture that growth.”

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About The Author

Shelby Grebbin

Shelby's work has been featured in Skilled Nursing News, The Boston Globe, Boston Business Journal, and The New England Center for Investigative Reporting. She is passionate about covering healthcare; reporting stories ranging from health violations in the U.S. prison system to neuroscience research discoveries and more. When she's not reporting, Shelby enjoys cycling around Brooklyn, walking around her neighborhood with a slice of pizza, and going to the movies.

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