Ambulatory surgical centers (ASCs) are licensed outpatient facilities that provide same-day surgical care without the need for hospital admission. ASCs offer cost-effective, high-quality services in a less stressful and more efficient environment than what many hospitals are able to provide (Ambulatory Surgery Center Association). While hospitals are often better suited for high-risk surgeries, ASCs can cost 45-60% less due to reduced overhead, lower fixed costs, and the shorter patient stays. One study revealed that surgery center performance generally exceeds that of hospital-based facilities, with the quality of surgery and postoperative care often being superior to that of a hospital (Grisel & Arjmand). The steady growth of the market for ambulatory surgical centers highlight their importance in the surgical field.
The ASC market, valued at 75.2 billion USD in 2018, is segmented into ophthalmology, orthopedics, gastroenterology, pain management, plastic surgery, and others. The number of ASC facilities has grown steadily over the years; they performed approximately 32% of all outpatient surgeries in 2005 and over 50% in 2017. Research indicates that procedures by ASCs will grow, on average, by 6-7% per year through 2021, increasing from 4-5% over the last three years (Fierce Healthcare).
The ASC market is projected to reach 120.8 billion by 2026 at a compounded annual growth rate of 27.6% (Grand View Research). It is anticipated that North America, the continent accounting for the largest share of the ASC market, will continue to dominate the landscape over the next six years (Markets and Markets). The Trump administration announced in 2019 that it planned to expand traditional Medicare coverage in ASCs for a number of procedures, including total knee replacement and several cardiac surgeries (Fierce Healthcare). However, the plastic surgery segment is expected to see the fastest growth over the next six years due to the aging population, growing focus on physical appearances, and demand for minimally-invasive cosmetic surgeries. Gastroenterology is also expected to experience significant growth due to increasing digestive disorders associated with lifestyle changes and excessive intake of high-cholesterol foods (Grand View Research).
The rising number of collaborations and acquisitions in the market for ambulatory surgical centers is another significant driver of growth. In January 2017, Surgical Care Affiliates and Optum entered into an agreement to expand capabilities in outpatient surgical procedures (Grand View Research). More recently, on November 10, 2020, Bain Capital Tech Opportunities acquired and combined HST Pathways and Casetabs, two cloud-based software companies that serve the ASC industry. Together, the two companies will offer surgery centers secure technology solutions that enhance products and services, including systems and software for office scheduling, care coordination, revenue optimization, patient communication, and health analytics (Fierce Healthcare).
“ASCs are well-positioned to continue their growth trend thanks to the quality, safety, and efficiency they offer patients and physicians,” said Darren Abrahamson, a managing director of Bain Capital Tech Opportunities told Fierce Healthcare. “HST and Casetabs are primed to fuel this progress by offering a flexible SaaS-enabled platform to help ASCs scale their businesses and deliver good patient outcomes.”
HST may pursue other tuck-in merger and acquisition targets to strengthen its product platform and maximize opportunities for growth. Additional collaborations relevant to the ASC industry are likely to emerge in the coming years, driving innovation and market growth even further.
Ambulatory Surgery Center Association and ASCA Foundation. Ambulatory Surgery Centers. Ambulatory Surgery Centers – Advancing Surgical Care.
Grand View Research. (2019). Ambulatory Surgery Center Market Size Report, 2019-2026. Grand View Research.
Landi, H. (2020). Eyeing Growth in the Ambulatory Surgery Market, Bain Capital’s Tech Fund Buys HST Pathways, Casetabs. Fierce Healthcare.
Markets and Markets Research Private Ltd. Ambulatory Surgical Centers Market. Markets and Markets.
Grisel, J & Arjmand, E. (2009). Comparing quality at an ambulatory surgery center and a hospital-based facility: Preliminary findings. Otolaryngology – Head and Neck Surgery.