Patients in the US have been pining for greater affordability and efficiency in healthcare.[1]The ambulatory surgery center (ASC) model has become an alternative to inpatient hospitals over the last few decades because they perform surgeries where patients do not need to be admitted to the hospital. This alternative facility lowers costs, reduces the risk of infections, and allows patients to recover in the comfort of their homes. ASCs reduce surgery costs by an estimated 45%-60%, due to lower fixed costs and reduced overhead costs.[2]
During the Covid-19 Pandemic, many hospitals experienced a significant challenge due to the near-full occupancy of beds in a few severely hit areas.[3]This has further accelerated the increasing interest in ambulatory care and has made it one of the fastest-growing and highest-margin segments in the healthcare industry, according to a report from McKinsey & Company.[4]
Key Factors:
- The number of surgical procedures performed in an ASC has increased significantly over the past decade.
- In 2019, approximately 60% of outpatient surgeries were performed in ASCs versus 48% in 2010.[5]
- More patients prefer ASCs for certain surgeries due to shorter stays, advanced medical technologies, cost-effective procedures, and reduced risks of infections.
- Favorable reimbursement policies are motivating CMS to expand the list of surgical procedures allowed in ASCs.
- Commercial payers are encouraging physicians to perform various surgical procedures in ASCs.
Common Procedures:
The market is dominated by single-specialty ASCs compared to multi-specialty centers. The most common specialties offered in an ASC include pain management, orthopedics, gastroenterology, ophthalmology, urology, and dermatology.
Key players in the industry include:
- T.H. Medical
- Surgery Partners
- AMSURG
- SurgCenter
- Surgical Care Affiliates
These five companies held about one-quarter of the market share in 2020.[6] AMSURG (a KKR company) owns and operates more than 250 ASCs across the country. Other operators such as Constitution Surgery Alliance, ASD Management, and Medical Facilities Corporation also hold substantial market share.
Ownership Structure:
- Physician Only – 60%
- Hospital-Physician – 17%
- Corporate-Physician – 13%
- Corporate only – 5%
- Hospital only – 3%
- Other – 2%
ASC ownership by hospitals and health systems showcases an upward trend, with 46% having at least one ASC in 2021. Research from the Ambulatory Surgery Center Association indicated an increase in physician-hospital-owned ASCs from 24% in 2017 to 31% in 2021.[7]
Outlook
In 2020, the Global Ambulatory Surgery Centers market exceeded $75 billion and was expected to grow at a CAGR of 6.1% from 2021 to 2027.[8] According to Fortune Business Insights, the US ASC market was estimated at $36.96 billion in the year 2021 and is expected to reach $58.85 billion by 2028, growing at a CAGR of 6.9% during the timeframe of 2021-2028.[9]
More M&A Activity Expected:
- Increasing demand for lower-cost healthcare solutions in the US.
- The increasing number of patients suffering from chronic diseases requiring surgeries is propelling market growth.
- Increased government investments towards the establishment of new ASCs.
- More than 6 out of 10 hospitals intend to increase their investment in ASCs.
- Over 80% of hospitals are structuring their ASCs as joint ventures.
- 100% of hospital-owned ASCs have declined sharply.
[1] Oracle Cerner, “Ambulatory Surgery Centers,” cerner.com
[2] Dr. Clemens, “Ambulatory Surgical Centers: Market Outlook,” Anesthesia Experts, February 23, 2021, anesthesiaexperts.com
[3] Davis O’Brien R, Toy S, and Fan W, “Some hospitals in southern, western U.S. states near capacity amid coronavirus outbreaks,” Wall Street Journal, July 5, 2020, wsj.com
[4] Pooja Kumar and Ramya Parthasarathy, “Walking out of the Hospital: The continued rise of ambulatory care and how to take advantage of it.”, McKinsey & Company, September 2020, mckinsey.com
[5] Medicare Payment Advisory Commission and VMG Health; Fortunebusinessinsights.com
[6] “US Ambulatory Surgical Centers Market Size, Share & COVID-19 Impact Analysis”, Fortune Business Insights, February 2022, fortunebusinessinsights.com
[7]Avanza Healthcare Strategies, “2021-2022 Hospital Leadership – ASC Survey”, 2022, Avanzastrategies.com
[8] “Ambulatory Surgical Centers Market Size,” Global Market Insights, September 2021, gminsights.com
[9] US Ambulatory Surgical Centers Market Size, Share & COVID-19 Impact Analysis”, Fortune Business Insights, February 2022, fortunebusinessinsights.com
