ASC-hospital joint ventures have become a mainstay as the ASC market matures and hospitals increasingly look to expand their outpatient surgical capacity.
Seven ASC leaders and physicians joined Becker’s to discuss the ways that ASCs can secure the most favorable outcomes for their organizations as they explore potential partnerships, joint ventures or acquisitions.
Editor’s note: Responses have been lightly edited for clarity and length.
Kristin Baird, BSN. President and CEO of Baird Group (Fort Atkinson, Wis.): When considering any joint ventures, look closely at the cultures of the two organizations. Is there an alignment of the vision and goals? What is the level of staff and physician engagement? Are mission, vision and values compatible? This will be foundational to success. Structure a clear shared governance approach that maintains a balance between hospital and physician interest with equal decision-making authority. In our consumer-driven world, it’s essential that hospitals and their affiliated ASCs present a unified brand experience. While the by-laws may structure the relationship as two separate entities, the consumer often sees them as one and the same. Therefore, the more the hospital and ASC can create a seamless consumer experience with
shared service standards, the better. Having a leader dedicated to alignment will
mitigate discord and ensure brand integrity and efficiency.
Adam Bruggeman, MD. CEO and Founder at Texas Spine Care Center (San Antonio): ASCs can benefit significantly from improved contracting in highly concentrated markets. Many independent and small ASCs struggle to obtain fair pricing from insurance companies leading to significant gaps in payment between independent vs integrated facilities. In addition, narrow networks continue to increase which can leave some ASCs facing out-of-network scenarios. Large healthcare systems also have improved group purchasing contracts to help reduce pricing and costs.
Peter Doble, MD, and Heath Vueleman, formerly of Sawtooth Surgery Center (Twin Falls, Idaho): Today, it’s important for hospitals, regardless of their size and scope, to identify physician-led enterprises which maximize reimbursement, minimize costs, mitigate risks and achieve meaningful outcomes.
The days of physicians being seen as widgets to be monetized are over, and hospitals and health systems know this. In addition, regulatory capture can no longer be relied upon to deny physicians’ participation [in] their true value-proposition.
As care becomes consumer-centric and ambulatory-centric, hospitals and health systems must become shareholders in physician-led enterprises to still maintain market share. This allows for the recruitment and retention of new physicians as well as retirement solutions for aging physicians, while still driving downstream revenue to hospitals and health systems.
However, hospitals and health systems must choose to not take a parasitic stake; and this means bringing true value to the targeted physician-led enterprise to increase revenue leveraging existing payer contracts and decrease contracts with scaled purchasing, elimination of redundancies and gain efficiencies.
Patrick McEneaney, DPM. Owner and CEO of North Illinois Foot and Ankle Specialists (Crystal Lake, Ill.): Hospital partnership can be a beneficial opportunity for ASCs. One of the benefits of a hospital partner is access to their surgeons. It is important that the hospital partner is committed to letting their employed surgeons go to the ASC. When this relationship is not established, hospital-employed physicians may be required to go to the hospital operating rooms. I have seen it where the surgeons are not able to go to the ASC or are not able to go until the hospital schedule is full. Another benefit can be access to the HMO plans. This can provide another group of patients to the ASC. It is important that these boundaries are established before any relationships are made.
Emily Shields. Chief Strategy Officer, OSF Healthcare (Peoria, Ill.): OSF HealthCare values the strong relationships we’ve built with ASCs (joint venture structures primarily) across our ministry. We recognize the increasing demand for outpatient care that allows patients to heal in the comfort of their own homes. As part of our strategy, we are actively working to streamline operations and improve efficiency across our hospitals and outpatient settings. This includes shifting appropriate surgical procedures to ASCs, freeing hospital capacity for more complex cases requiring inpatient care. Key to our success is deepening collaboration with physicians and providers who share our commitment to delivering high-quality care and an exceptional patient experience, and ASC partnerships allow us to do so. We believe we will continue to see tremendous opportunity for innovative partnership with OSF through ASCs that will benefit patients, providers, and mission partners (employees) alike.
Michael Warne. CEO of Associated Gastroenterologists of Central New York (Camillus): That’s a loaded question. I think most independent ASCs would prefer to stay independent — that’s kind of the whole point. But with flat reimbursement and rising costs across the board, it’s getting harder to make the numbers work.
In some cases, teaming up with a hospital or health system can help — mainly because they have more leverage with insurance companies and deeper pockets to cover big-ticket expenses — like anesthesia, which has become one of the most challenging and expensive line items to manage.
But from a day-to-day standpoint, I don’t think hospitals are coming in to make ASCs run better. These centers are already super efficient, run by doctors and admins who know the local market and have spent years fine-tuning operations. So no, they probably won’t improve workflow — but if they can bring better rates or support on the financial side, there’s definitely some value there.
Joe White. Founder and CEO of Send-it Healthcare (Nashville, Tenn.): To get the most out of partnerships with hospitals and health systems, ASCs should think beyond just payer negotiations. Yes, aligning with a health system can strengthen your position at the negotiation table, but one of the most underutilized benefits is access to economies of scale across labor and clinical services. By tapping into the health system’s broader workforce, ASCs can build flexible staffing models that respond to fluctuations in volume — whether that’s sharing nursing staff, tapping into anesthesia coverage, or coordinating ancillary services like pathology and radiology. These collaborative arrangements create more resilient operations, improve patient access and care continuity, and ultimately enhance margins by reducing fixed labor and service costs.
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