Of the 3,700 Medicare certified freestanding ambulatory surgical centers in the United States, 2,600 (about 70 percent) are independent, 800 are in business with ASC corporate partners, 200 are joint ventured with hospitals and 100 are three-way joint ventures between physicians, an ASC company and a hospital. We'll briefly detail these four most common ASC business models so that you can decide which is best for you.

Independent ASCs
These surgery centers are independently owned and managed by physicians. The ownership structure can be a sole proprietorship, a limited partnership or an LLC formed by a group of single or multispecialty physicians.

• controlled and managed by the physician-owners
• complete autonomy
• 100 percent of profits are shared among the physicians based on their ownership

• higher investment risk; physicians must provide all capital and guarantee all loans
• physicians must negotiate payer contracts, collect revenues and manage personnel
• no benchmarks are readily available
• average facility fee of $1,105 is lowest of the four models
• while some independent ASCs are very profitable, most are underutilized and are not as profitable as they could be

Corporate-partnered ASCs
These surgery centers have a for-profit ASC corporation as an equity partner, and the ASC corporation provides capital and management services. Typically the corporate partner invests in or purchases a minority or majority interest of from 20 to 51 percent. This model has shown remarkable growth in the last five years. There are now more than 20 ASC companies seeking to partner with independent ASCs to provide growth strategies and exit plans for physician-investors.

• reduced physician risk
• more investment security, professional management and management systems
• contracting expertise
• generally higher revenues, profits and volume
• access to capital
• relevant benchmarking
• expedited turnover times
• average facility fee of $1,406 is among the highest due to the management expertise and focus on utilization and profitability

• shared control
• loss of independence
• business-like management
• shared profits, profit orientation

Hospital partnership
These surgery centers have a hospital as an equity partner and are typically managed by the hospital. The hospital usually has a 51 to 80 percent ownership interest in the center.

• convenient location
• supply and services contracting
• access to hospital's payer contracts
• hospital provides capital
• access to a CON, if needed
• average facility fee of $1,460

• hospital usually wants majority ownership and control
• managed like a hospital
• competing uses for capital
• physicians lose leverage

Joint ventures
Physician/corporation/hospital joint ventures are typically managed by the for-profit ASC corporation. The most popular three-way model incorporates equal or near-equal ownership between the three parties, most commonly as an LLC or limited partnership. These partnerships work best if the corporate partner is brought in first to negotiate with the hospital.

• three parties to provide capital
• balanced and less adversarial
• managed like an ASC, not a hospital
• risk spread between three parties
• facility fees similar to hospital model

• profits split three ways
• physicians have less ownership
• delicate partnership structure
• hospital must bring value or ownership will be diluted without value