Investment banking firm Goldman Sachs recently forecasts that the U.S. has a 35% chance of entering a recession in the next year, a worrisome development for ASCs nationwide.
Here are a few key ways ASC physicians, administrators and executives are doubling down on cost-cutting measures amid rising costs and growing recession fears:
Editor’s note: Responses have been lightly edited for clarity and length.
Improving efficiency
Kathleen Hickman, RN. Administrator and Clinical Director of Dutchess Ambulatory Surgical Center (Poughkeepsie, N.Y.): Improving efficiency is the biggest and most challenging strategy. Most ASCs operate in a very lean manner, so trying to find additional areas of improvement is critical in terms of decreasing costs while still providing the highest-quality care. Reviewing all contracts frequently can lead to cost savings and avoiding complacency. With staffing being one the highest expenses in an ASC, creative and flex staffing is a strategy to decrease costs in a very unsettled economy.
Heather Combs, RN. ASC Administrator at Austin (Texas) Regional Clinic: ASCs historically have always had to focus on controlling operating costs as the profit margins are significantly less than [hospital outpatient departments] and hospitals. As payer reimbursements continue to decrease year over year, and the impacts of tariffs begin to be seen, it puts more pressure on increasing operational efficiencies and pursuing strategic partnerships with health systems or [management service organizations] to benefit from economies of scale. MSOs’ value-based care models and partnerships with ]group purchasing organizations] provide higher margins. Austin Regional Clinic has provided care for over 25% of the Austin patient population for 45 years and recognized the need to provide ambulatory surgery services to their patients. ARC will add two ASCs, South Austin and Round Rock, by mid-2026.
Jeffrey Kachmann, MD. Spine Surgeon at North Texas Brain and Spine Center (Frisco): I’m taking a proactive approach to prepare my practice for a potential economic downturn by focusing on a few key areas:
Diversifying revenue streams: I’m exploring ways to offer services that align with both surgical and non-surgical treatments. For example, incorporating outpatient procedures, physical therapy or pain management services could help stabilize cash flow in the event of reduced surgical volumes.
Building strong relationships with referring physicians: Ensuring a robust referral network is essential. By staying connected with primary care physicians, orthopedists and other specialists.
Operational efficiency: I’m focused on improving the operational efficiency of my practice. This includes streamlining workflows, reducing overhead costs where possible and implementing technology to help with scheduling, billing and patient communications.
Patient communication and education: Open communication with patients about the financial aspects of care is important. I plan to help patients understand the options available to them in terms of payment plans, insurance coverage and financial assistance programs. A transparent approach helps maintain patient trust, even in uncertain times.
Maintaining high-quality care: Ultimately, the foundation of a successful practice during any economic climate is providing high-quality, compassionate care. Building a reputation for excellent outcomes and patient satisfaction.
Advocating for adjusted payment rates
Stephanie Tomlin, RN. Administrator of Rincon Surgery Center (Tucson, Ariz.): To recession-proof ASCs, focusing on staffing, price transparency, refining collection processes and advocating for better CMS reimbursements are vital strategies. Additionally, lean methods, like just-in-time replenishment, can help manage supply costs effectively. Implementing Kaizen principles for continuous improvement can drive operational excellence and cost savings.
Anders Gilberg, Senior Vice President of Government Affairs, Medical Group Management Association: MGMA urges swift passage of the Medicare Patient Access and Practice Stabilization Act of 2025. Physician practices are now a month into the new year, facing uncertainty and financial shortfalls from the congressional failure to reverse the 2025 Medicare fee schedule cuts. These cuts have negatively impacted the viability of their Medicare business, commercial contracts tied to Medicare rates, as well as Medicaid reimbursement in states that use Medicare as a benchmark. With nearly 80% of all physicians now employed by facilities and larger entities, Medicare beneficiaries in areas of the country that rely solely on community-based medical practices are especially vulnerable to access issues. Without immediate congressional action on this important legislation, more and more physician practices will be forced to close their doors, unable to keep up with rapidly rising staff salaries, rent, and administrative costs.
Monitoring cash flow
Melissa Waibel. CEO of Guam Surgicenter: Strategies to recession-proof your ASC are as follows: monitoring cash flow and having a healthy reserve, reviewing processes and looking for efficiencies to reduce time and cost, keeping tight control on matching work hours to the needs of the business, recontracting with insurance companies regularly, and building strong relationships with vendors to get the best rates possible. Overall, treat the business like a well-run OR. Don’t open it until you need it, be efficient with your time, get the best quality at the best price and constantly look for ways to improve.
Optimizing supply chain
Shakeel Ahmed, MD. CEO of St. Louis-based ASC group Atlas Surgical Group: Profit margins in our industry are already razor-thin, and I suspect we may soon reach a point where at least some smaller centers can no longer afford to care for the majority of Medicaid and Medicare patients. Small ASCs routinely operate on an EBITDA of 10% or so. And those would be the worst hit. That would be a true travesty, considering this industry was originally designed to support the healthcare economy by providing low-cost care and shifting elective procedures into a more convenient and cost-effective setting. For now, we’re focusing on being extremely savvy and strategic with supply management and cost containment. In addition, we are also working on being more efficient with turnover times and staffing, and selective in choosing the right surgical services and subspecialties for our ASCs across the board.
Peter Passias, MD. Orthopedic Spine Surgeon at NYU Langone Health (New York City): Over the past years, our supply chains have generally improved in line with our recovery globally from the pandemic. In our experience, this has not yet returned to baseline, and certain specific and notable distinctions persist. There have also been individual hurdles related to random natural disasters, such as the recent shortage in IV fluids with recent extreme weather. In preparation for the tariffs, this has been considered, along with general, inflationary-related pressures and projections for diminished reimbursements in certain scenarios. This is generally reflected in our drive for streamlining cost efficiency and OR efficiency to maximize volume. There will certainly be an anticipation of selective utilization of more cost-effective alternatives in several cases.
Robert Tatsumi, MD. President of Oregon Spine Care (Tualatin): Microeconomics shows that before a tariff is in place, consumer consumption increases due to the lower cost of goods. Our corporation has been purchasing additional electronics and furniture (consumer surplus) in anticipation of future tariffs. Tariffs create inefficiencies in the market and lead to higher supply costs regardless of where the product is manufactured (deadweight loss). We anticipate reduced consumer spending to adjust for reduced business profits. Our supply chain pressure has remained neutral for the current fiscal year due to flexibility with sourcing various suppliers.
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