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Trend to Watch: Hold the Line
ASCs owned by enterprising physicians are facing increased pressure to sell.
Adam Taylor | Senior Editor
Publish Date: March 14, 2022   |  Tags:   Financial Management Industry Trends
March 22 Cover
SELF-SUSTAINING Excelsior Orthopaedics CEO David Uba, MBA, is flanked by Buffalo Surgery Center board member John Callahan, MD (left), and BSC founder James Slough, MD. The practice has expanded while resisting partnership offers from hospitals and corporate management companies.   |   Excelsior Orthopaedics

Hospital systems, ambulatory surgery center management companies and private equity firms are in full-tilt ASC acquisition mode these days. The trend is a product of health systems reading the tea leaves and seeing that government and commercial payers are steering more procedures from hospitals to ASCs, where the overhead is lower and surgeries can be done for substantially less money with positive outcomes.

Hospitals want to increase their presence in the ASC market to stop the migration of some of their most profitable surgeries from their outpatient departments to independent surgery centers. Private equity firms see the future profitability of ASCs and want a piece of the action, especially as many physician-owners are nearing retirement and looking to cash out.

These factors have resulted in physician-owned practice groups such as Excelsior Orthopaedics in Amherst, N.Y., receiving calls or emails every week from would-be investors who want to buy into the ASC market. Excelsior won’t budge. In fact, they’re engaged in a $6.2M expansion project, which includes splitting its Buffalo Surgery Center into two buildings, adding four ORs, relocating the facility’s GI suite and adding a sixth procedure room. The group’s leadership is also embarking on launching a division in the practice that would serve as a consultancy for other ASCs that share their core value of remaining independent. “Hospitals figure, ‘If you can’t beat them, join them,’” says Excelsior CEO David Uba, MBA. “But our freedom is what’s most important to us and losing it is our biggest threat. So, we’re resisting.”

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