By Erik Kraemer, Chief Development Officer
Ambulatory surgery centers (ASCs) have moved from optional to essential in today’s healthcare landscape. Driven by regulatory change, payer pressure, physician dynamics, and patient expectations, ASCs are now a core component of how health systems improve care, compete, manage capacity, and sustain financial performance. With roughly 50% of ASC-eligible procedures still performed in hospitals and outpatient surgical volume projected to grow by 20% over the next decade, the shift toward ambulatory settings is far from complete. Coupled with regulatory and payer changes hitting the market, now is the ideal moment for health systems to reevaluate and/or catalyze their ASC strategy.
CMS Regulations and Payer Pressure
Procedures performed in an ASC cost Medicare approximately half as much as when performed in a hospital setting. Effective in 2026, the Centers for Medicare & Medicaid Services (CMS) loosened regulations on ASCs by expanding Medicare payment rates, broadening the range of services ASCs can provide, and removing 285 procedures from the Inpatient-Only list (IPO). CMS is also tying rates to the hospital market basket index to ensure ASC reimbursements keep pace with inflation and rising operational costs.
Together, these regulatory shifts make ASCs a more attractive strategic asset for health systems: They support cost-effective surgical care, higher procedural volumes outside of expensive inpatient settings, and alignment with value-based payment priorities.
In some markets, commercial payers are following suit, restricting authorization for certain outpatient procedures, such as cataract surgery or colonoscopies, in a hospital setting. At the same time, patients are incentivized to choose ambulatory settings by lower costs.
Physician Alignment
Ambulatory surgery centers began as a vehicle for physician independence, offering equity ownership and an ancillary income stream. Early ASC growth was fueled by hospitals and physicians shifting cases to this mutually beneficial care setting and forming joint ventures to own ASCs. But the market has shifted. Independent physician practices are shrinking as health systems and private equity groups consume them, reshaping referral patterns and physician influence.
At the same time, CMS regulatory tailwinds, payer pressure, patient demand for lower-cost outpatient care, and strong quality outcomes have accelerated the migration of surgical volume to ASCs—well beyond the original independent-physician ownership model. Physicians are also facing declining reimbursement and rising administrative and operating costs, making ASC participation an increasingly important part of their economic stability and preferred work environment.
The result? For health systems, physician alignment has become a strategic imperative. Health systems are rethinking ASC ownership—especially joint‑venture and shared‑governance models—to maintain engagement, loyalty, and long‑term retention.
A thoughtful ASC strategy allows health systems to offer physicians an alternative to the hospital setting for their cases, reduce the total cost of care, improve patient access and experience, and align physician incentives with organizational goals. Surgeons benefit as well from more reliable block time and less schedule volatility—key drivers of engagement and retention.
In today’s environment, ASCs are no longer just real estate or capacity plays. They are a core component of physician alignment and portfolio strategy.
Patient Access and Experience
Beyond economics, ASCs directly address growing access challenges. Many academic and tertiary hospitals face significant capacity constraints, with long wait times for elective procedures that can delay care and increase patient no-shows or cancellations. ASCs provide a lower-cost, more predictable environment for elective surgery—free from emergency disruptions that routinely affect hospital operating rooms—and meet rising patient expectations for convenience, speed, and ease of navigation.
For health systems, this shift creates meaningful operational benefits. Moving lower-acuity cases out of the hospital frees inpatient beds and operating room capacity for higher-acuity, higher-margin care. It also improves patient experience by offering faster scheduling, easier navigation, and fewer day-of-surgery delays.
At Regent, we report a +93 NPS and top box scores that exceed industry benchmarks. In an environment where surgery remains a primary driver of hospital revenue, protecting access and throughput is foundational to success.
The Financial Picture
The urgency of an ASC strategy varies by market, but the underlying pressures are consistent. In some areas, health systems are responding to direct payer demands to move procedures out of the hospital. In others, they’re trying to keep pace with competitors who already have established ASC networks.
At the same time, expanding hospital capacity has become increasingly expensive and difficult, while ASCs offer a faster, more affordable way to grow—often through joint‑venture models that require less upfront capital. In many markets, payers are no longer simply encouraging site‑of‑service shifts; they are requiring them through prior‑authorization restrictions, differential copays, and aggressive steerage toward lower‑cost ASC settings.
What’s increasingly common is that payers are forcing health systems to consider how an ASC strategy can protect margins, retain surgical volume, and create both clinical and financial advantages in a rapidly shifting environment.
Turning Strategy into Action
The shift toward ASCs is no longer a distant trend, but a present‑day reality shaping how health systems must operate to remain competitive. Changes in regulation, growing payer pressure, shifts in how physicians practice, and what patients expect from care have all come together to make ASCs a practical necessity for health systems, not a nice-to-have. The systems that are pulling ahead are the ones that see ASCs as part of the bigger picture: a way to expand access, stay aligned with physicians, control costs, and support long-term financial health.
Health systems that act now, grounding their ASC strategy in market intelligence, operational readiness, and thoughtful physician partnership, will be positioned to capture surgical volume, protect revenues, and meet patients where they increasingly prefer to receive care. Those that delay risk falling behind competitors, payers, and independent platforms that are already changing how and where surgery gets done.
The ASC migration is underway. The opportunity is clear. The question for health system leaders is no longer if they need an ASC strategy—but how quickly they can build one that supports their broader mission, market position, and future growth.