The ASC industry is historically fragmented, but slowly consolidating as practice costs soar.
Nearly 2,000 ASCs are now partnered with a national operator — indicative of a shifting ownership landscape in the outpatient space.
Benjamin Stein, MD, an independent orthopedic surgeon who co-founded and is now chairman of ASC development group Capital Surgical Solutions, joined Becker's to discuss the pros and cons of ASC consolidation.
Editor's note: This response was edited lightly for clarity and length.
Question: Could you walk me through the pros and cons of consolidation of the ASC industry?
Dr. Benjamin Stein: I'm coming at this at a very specific lens — my focus is really independence and restoring balance toward surgeon leadership and control for facilities.
When you look at the pros and cons of consolidation, the theoretical pros are improvements in leverage because of size. There are operational improvements that come with size, especially regarding group negotiation and economies of scale. I think that’s the primary theoretical upside of consolidation throughout healthcare, whether it’s ASCs, physician practices or any other ancillary services.
But I don’t know how much this translates directly into value-based care outcomes. The downside, in my opinion, comes from the experience of care providers — whether you’re talking about physicians, nurses or business office staff. There’s a loss of that tight-knit, local, regional management and a real team feeling when you scale to these corporate, large aggregate models.
I’ve seen this firsthand in facilities that went from independent to being acquired by large consolidators. There was a noticeable shift in the culture among the staff and the surgeons, and that spills over into the patient experience. So, in my view, one of the biggest cons is the dilution of the core team environment in these formerly independent facilities.
Another con is whether these large aggregators are truly able to run these enterprises better, even from an economic perspective. Many examples show they don’t, because these facilities are regional and rely on local resourcing. When you’re too large, it becomes hard to be malleable and adapt to local needs.