Like most successful health systems, you are likely going all in on expanding your acute footprint through mergers, acquisitions, and new facility development to meet inpatient demand. But while inpatient care remains essential, outpatient services are on an accelerated growth trajectory that your health system shouldn’t miss out on.

Investing in high-performing ambulatory surgery centers (ASCs) is the cornerstone of a strong outpatient growth strategy for your health system.

Inpatient Volumes Are Growing Slowly

During 2024, several health systems added inpatient facilities through mergers or acquisitions, with transactions involving Jefferson Health, Lehigh Valley Health Network, Orlando Health, and others making headlines.

Inpatient facility transactions take years to prepare and complete, significantly reducing health system capacity in the process. They also face intensive regulatory scrutiny and demand long time horizons before delivering a return on investment.

Moreover, inpatient service lines are growing more slowly than outpatient service lines. Despite a growing, aging population nationwide, overall inpatient volumes will increase only 3% over the next 10 years, Sg2 forecasts.

Outpatient Surgery Service Lines Are Growing

Meanwhile, technical advancements mean that more and more surgeries can happen optimally in outpatient settings, which providers and patients overwhelmingly prefer.

Much of this outpatient surgical growth is happening in ASCs. Over the next 10 years, hospital outpatient volume will grow 17% to 5.82 billion, while ASC volume will go up 21% to 44 million Sg2 predicts. As these numbers suggest, there is ample opportunity for health systems to embrace strategies that grow both HOPD and ASC volumes.  

ASC Financial Margins Average 25 – 30%

Health system operating margins averaged 4.6% in November 2024, a pattern typical of the year overall, according to Kaufman Hall’s National Hospital Flash Report. While health system margins were healthier last year than during prior years, they are significantly less than attainable ASC margins — 25-30%.

Overall, outpatient surgery has higher margin growth potential compared to inpatient surgery, according to HFMA. In November 2024, for example, “outpatient revenue per calendar day increased 7% month over month and 13% over the same period in 2023, outpacing inpatient revenue's bump of 1% and 6%, respectively,” according to Kaufman Hall.

What this means: Investing in both inpatient and outpatient service line expansion is the best path to health system growth and development during the short term and the long term.

ASC Market Will Grow 50% over the Next 6 Years

The ambulatory surgery center market will grow from $50B today to $75B by 2030, The Health Management Academy (THMA) forecasts in an October 2024 report. Driving this growth are increasingly relaxed CON laws in many states (particularly in the Southeast), steerage, and the expansion of the Covered Procedures List, according to THMA.

Opportunities abound not only in relatively new, fast-growing specialties like cardiovascular, spine, and total joint replacement, but also in longstanding, ‘bread-and-butter’ ASC specialties like ophthalmology and gastroenterology. By 2033, for example, outpatient upper GI endoscopy procedures will increase 21%.

“The stakes are rising for systems without sufficient ASC presence,” THMA notes. Slow-to-market systems will lose out.

ASCs Are a High Priority for Health System Leaders

In a THMA survey published last year, 86% of chief strategy officers said that ASCs are a high priority for their health systems.  

With so many health system leaders planning to expand their footprints by developing surgery center networks, ASC-focused expertise and speed to market are crucial.

Whether you are planning HOPD-to-ASC conversions, de novo ASCs, or acquisitions, Compass Surgical Partners can help. Contact us to explore ways your health system can stay ahead of the curve.