Becker's ASC Review

37 TRANSACTIONS Trump's competition order rollback could speed physician, ASC consolidation By Patsy Newitt P resident Donald Trump's Aug. 13 decision to revoke Executive Order 14036, a Biden-era directive to scrutinize consolidation across industries, including healthcare, could have a ripple effect across physician practices, ASC and hospital systems. The repeal removes a layer of scrutiny over healthcare mergers and acquisitions, though existing antitrust laws remain in effect. While large health systems may gain more flexibility to pursue mergers and affiliations, physicians and ASC leaders are weighing what it could mean for independence, negotiating leverage and future partnerships. Jason Sansone, MD, president of Orthopedic & Spine Centers of Wisconsin in Madison, told Becker's the shift could accelerate consolidation among orthopedic and spine practices. "The revocation of Executive Order 14036 is expected to ease regulatory oversight of mergers and partnerships, creating a more favorable environment for consolidation," Dr. Sansone told Becker's. "For spine and orthopedic groups, such as OSCW, this will likely accelerate activity as practices pursue opportunities to grow, align with hospitals or health systems and strengthen their negotiating position with insurers and suppliers." For independent practices and ASCs, more consolidation could cut both ways. On one hand, groups may benefit from stronger alignment with health systems, improved referral pipelines and greater leverage with payers. ASCs are already of keen interest to health systems. According to a survey from L.E.K. Consulting, in 2011, 35% of ASCs were partially or fully owned by corporations, management organizations or hospitals, and health systems. By 2021, corporate, hospital and health system ownership of ASCs jumped to 48%. Dallas-based Tenet Healthcare, the parent company of ASC giant United Surgical Partners International, continues to view ASCs as pivotal to company growth. Tenet is planning to invest at least $250 million annually in M&A in the ambulatory space while operating more than 445 ASCs and 24 surgical hospitals, according to its first- quarter earnings report. President Trump's order could also allow larger hospital systems to squeeze margins and reduce competition, particularly in markets already dominated by a few players. Among physician practices, the market is already being squeezed. Around 108,700 physicians left private practice for employment between 2019 and 2021, according to a 2024 Avalere report. And in 2022, just 44% of physicians owned their practice, compared with 76% in the early 1980s, according to a report from the American Medical Association. Many employed physicians believe corporate ownership lessens their clinical autonomy. Around 61% of employed physicians said they have moderate or no autonomy to make referrals outside of their practice or ownership system, while 47% said they adjust patient treatment options to reduce costs based on practice policies or incentives, according to a 2023 NORC survey from the University of Chicago. "This one factor makes physicians vulnerable to the whims of large corporations," Loay Kabbani, MD, a vascular surgery specialist at Detroit-based Henry Ford Health, told Becker's. "As physicians become more and more employed, we lose control of our practice and our patient- physician relationships." Hospital executives have expressed optimism that the repeal could allow for more flexible, locally driven transactions. Some, like AtlantiCare CEO Michael Charlton, see the move as creating an "open environment for transactions" that allow hospitals to optimize resources, he told Becker's. Dr. Sansone said his group expects to see significant orthopedic and spine consolidation in the next three to four years. "At Orthopedic & Spine Centers of Wisconsin, we anticipate a continued wave of consolidation across the specialty in the coming years," he said. "For our group, this environment presents opportunities to strategically expand and partner in ways that enhance patient access, strengthen care coordination and ensure long-term sustainability." n "For spine and orthopedic groups … this will likely accelerate activity as practices pursue opportunities to grow, align with hospitals or health systems and strengthen their negotiating position with insurers and suppliers." — Dr. Jason Sansone

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