What’s Keeping GI Centers Profitable?

The answer is refined daily workflows, an eye toward new revenue streams and relentless scrutiny of ancillary costs.

Freestanding GI centers work on tight margins, and are generally reimbursed at a lower rate compared with hospitals or hospital outpatient surgery departments. Given current market conditions combined with stagnant or decreasing insurance reimbursement, profitability is not assured.

Adding to the financial stress are day-to-day profit dings such as patients not showing up for appointments, impending cuts to provider and facility payments, and inflation that impacts operational costs.

Despite these profit-killing realities, GI volume predictions are favorable. A June 2025 market report on the endoscopy procedures industry suggests steady growth driven by trends including expansion of GI care offered in freestanding ASCs and a growing preference for sedation-free and office-based endoscopy that is strengthening the business case for high throughput. On the technology front, 2025 projections for the U.S. GI endoscopic device market are expected to almost double from 2023 to 2030, which forecasters attribute to rising procedure volumes, non-invasive test adoption and innovations toward improved infection prevention.

This big-picture view finds ASCs well-positioned to grow and capture a larger piece of the GI care market, according to therapeutic endoscopist Nalini Guda, MD, FACG, AGAF, FJGES, MASGE, president of GI Associates’ eight freestanding ASCs and multiple office locations in southeastern Wisconsin, clinical adjunct professor at University of Wisconsin School of Medicine and Public Health and board member for the American Society for Gastrointestinal Endoscopy (ASGE).

Recognize new GI revenue potential

Dr. Guda sees ASCs easily adapting to perform more procedures conventionally done in hospitals to create new, lucrative revenue streams.

One example is diagnostic endoscopic ultrasound procedures, which are routinely performed in hospitals due to reimbursement issues and not necessarily due to patient comorbidities or technical challenges. “If policies of reimbursement were to change, endoscopic ultrasound with biopsy of simple lesions and tumors can be safely performed at an ASC,” says Dr. Guda. He views freestanding GI centers as a vital piece of American healthcare infrastructure that can reduce the burden on larger institutions by caring for healthier patients.

While the outlook is favorable for freestanding GI centers, it won’t make a difference if they aren’t set up for success through diligent financial management, cautions Dr. Guda.

Keys to profitability

SET FOR SUCCESS Dr. Nalini Guda says ASCs are well-positioned to target growth opportunities and capture a larger piece of the GI market.

Many GI centers are successful and turning a profit. What’s their secret? They embody the traditional approaches to operating a successful center, such as maintaining adequate procedure volumes, focusing on efficiency and keeping operational costs low. Dr. Guda adds that centers like his make efforts to address the increasing cost of living for staff through wage adjustments. His teams keep a close eye on reigning in the increasing costs of services, disposables and facilities maintenance. Tweaks to day-to-day workflow also help, such as reducing turnover times in procedure rooms and optimizing staffing levels for maximum efficiency. Dr. Guda provides this list of operational strategies to sharpen your focus:

• Improve efficiency. There should be a daily focus on improvement to remain operationally viable at a high volume, including rapid turnover between cases. Dr. Guda says his centers plan for procedure room turnover times of seven to 10 minutes, which he says can be achieved without compromising on disinfection and patient safety.

• Consider monitored anesthesia care. Propofol decreases the time for sedation and recovery. “This allows us to discharge the patient quicker as opposed to IV conscious sedation,” says Dr. Guda. “It also requires less recovery staff and recovery space, which at times is a limiting factor to meeting our volume workflow.”

• Standardize patient readiness. A member of Dr. Guda’s nursing staff calls every patient ahead of time to obtain their health history and confirm their appropriateness for the outpatient setting. The information the nurse gathers is then reviewed by a member of the anesthesia team. “The goal is to prevent last minute cancelations or transfers to the hospitals,” says Dr. Guda.

• Explore AI and other technology training. Dr. Guda says artificial intelligence tools can enhance operational efficiencies by improving some aspects of pre-procedure registration, post-procedure care information and intraprocedural documentation. Of course, you must account for any increased capital costs and licensing fees that such technology could require. Staff training and comfort using the technology is important due to its connection to electronic health records and patient tracking.

Fill schedule gaps thoughtfully

Based on a 5% to 10% cancelation rate, one extra procedure per half-day could be added to the schedule, which might help offset some gaps. On the flip side, this add-on might cause delays and inefficiencies when everyone shows up for their procedures. To make smart choices with add-on scheduling, tailor your plan by consistently evaluating historical and current data. “It’s also important to account for costs associated with overtime work, not only financial costs but also the costs of employee and patient dissatisfaction,” says Dr. Guda.

“Endoscopic ultrasound with biopsy of simple lesions and tumors can be safely performed at an ASC.”
Nalini Guda, MD, FACG, AGAF, FJGES, MASGE

Ancillary equipment can eat into a GI center’s margins very rapidly, especially if expensive items such as balloon dilators are being used instead of rigid dilators, if equipment such as clips is being used unnecessarily, or if multiple devices are being used for a single procedure, cautions Dr. Guda. Ancillary equipment charges are often variable, as factors such as tariffs as well as supply and demand issues experienced during the COVID-19 pandemic made clear. He suggests these efforts to mitigate such losses:

• Linear integration. Where legally possible, incorporate other ancillary services such as anesthesia and pathology. This can lead to better global contracts, especially with self-employed organizations.

• Partnerships. Consider joining a larger organization or supplier and consolidating your position. This can be a game changer for achieving savings through cost negotiations.

• Smart negotiations. Lock in negotiated costs for the year ahead when possible. Also consider bundled payment or per-procedure costs irrespective of the equipment used (average costing). Buying in bulk and distributing internally is a significant way to reduce costs, especially if your practice has multiple locations.

Foster internal, external collaborations

Busy administrators should take the time to seek ideas from others. “We need to be collaborative in our approach and hopefully practices can learn from each other,” says Dr. Guda. Here are a few ways he suggests GI centers approach collaborations to glean profitability strategies:

• Seek collaborations beyond your center. Connect with organizations like ASGE to gain access to a national voice for advocacy. Dr. Guda says ASGE offers valuable practice resources and networking opportunities for members who are on the hunt for new practice strategies and input.

He also advises referring providers to ensure there is adequate volume. “Take a closer look at insurance company contracts periodically to review and renegotiate,” says Dr. Guda. ”This is easily forgotten when there are multiple insurance carriers, and often contracts are negotiated separately between ASCs in the same practice.”

• Build stronger internal alliances. Devote energy toward employee satisfaction, not only to minimize turnover and to prevent expensive new-employee training and orientation, but also to support employees in their efforts to provide better patient care and outcomes.

• Leverage technology support. Make work easier on your staff through smart additions of technology. For example, evaluate electronic tools that can make pre-registration and post-procedure follow-up care easier for staff to navigate and standardize. As AI tools flood the market, explore ways to improve intraprocedural documentation and optimize supply inventory.

Dr. Guda also advises maintaining a clear focus on revenue cycle management and purchasing any tools that can support it to reduce reimbursement delays and errors.

Bottom line on the bottom line

Dr. Guda’s overall takeaway for busy GI ASC administrators is this: Take the time to optimize your operations and current services.

Use a team approach to evaluate everything from staffing efficiency and satisfaction to contract negotiations to leveraging technology to boost efficiency. Stay informed and be prepared for the many market changes that will continue to arise as you move forward into a more prosperous future. OSM