Becker's ASC Review

18 TRANSACTIONS Inside the ASC strategies protecting margins in 2026 By Sophie Eydis A SCs are entering 2026 with strong procedural demand and expanding clinical capabilities, but the financial picture is becoming far more complex. Rising labor and supply costs, tightening reimbursement and increasingly aggressive payer behavior are compressing margins across the outpatient landscape. Leaders say the challenge is no longer just capturing growth, but sustaining profitability in an environment where costs are rising faster than revenue. As a result, ASC operators are shiing their focus from expansion to execution, rethinking how they manage supply chains, structure partnerships, deploy capital and optimize operations. Supply chain discipline becomes a frontline margin strategy One of the most immediate areas of focus is supply chain discipline. Leaders are scrutinizing case-level costs, standardizing implants and reducing unnecessary variation in the operating room. Even small inefficiencies, such as unused supplies or inconsistent physician preferences, can quickly erode margins at scale. Improving supply utilization and preference card accuracy are among the most actionable levers for controlling costs. Capital strategy shis from expansion to reinvestment At the same time, many organizations are rethinking how they deploy capital. Rather than prioritizing facility expansion, more ASCs are shiing toward reinvestment in existing operations, technology and infrastructure. According to a VMG Health report, 31% of leaders say capital procurement will be a major strategic focus in 2026, up from 20% the year prior, while the share planning facility expansion fell from 26% to 20%. e shi signals a move toward more disciplined investment strategies aimed at improving efficiency and protecting margins. Partnerships emerge as a path to scale and stability Partnership strategy is also evolving as more independent ASCs weigh alignment to navigate financial and operational pressures. According to VMG Health, 71% of leaders say they would consider partnering with a health system, up from 57% the year prior, while 10% of independent centers anticipate selling in 2026, nearly double last year's figure. e trend signals a growing shi toward scale and collaboration as a way to stabilize margins and manage rising costs. Technology and service line expansion fuel targeted growth At the same time, ASCs are investing in technology and service line expansion to capture new outpatient volume. Leaders point to growing adoption of AI in revenue cycle operations and continued investment in robotic surgery, particularly in orthopedic and spine procedures, as key trends shaping 2026. ese shis are being reinforced by CMS policy changes, with nearly 300 procedures transitioning from the inpatient-only list to outpatient settings, a move expected to drive additional case volume and revenue growth in ASC-focused specialties. n The key to aligning with the right MSO By Francesca Mathewes P artnerships with management services organizations have become an increasingly common business strategy for physician practices struggling against a rising tide of corporate consolidation efforts and soaring operational costs. According to the American Medical Association's "Physician Practice Benchmark Report," published in May 2025, private practice now represents less than half of physicians in most medical specialties, with participation ranging from 30.7% in cardiology to 46.9% in radiology. Conversely, the share of physicians working in hospital-owned practices rose to 34.5% in 2024 — an 11-percentage point increase from 23.4% in 2012. According to the AMA, the top reasons that physicians decided to sell their practices included a lack of negotiation power over payer contracts, the cost of necessary resources and managing administrative requirements. Surinder Devgun, MD, managing partner for Rochester (N.Y.) Gastroenterology Associates, recently joined Becker's to discuss his practice's recent MSO affiliation and how it may benefit organizations similar to his. Editor's note: This response has been edited for clarity and length. Question: What would you say to a leader at a smaller, private practice evaluating an MSO affiliation for the first time? Dr. Surinder Devgun: These are very practice- and environment-dependent decisions. These are particularly effective platforms when you have smaller practices, or if you have a very fractured market where you need to align yourself somehow. And we were sort of in the latter boat. [We're in] a small town, and there's lots of players in town and, you know, just to seek some form of alignment that would give us some structure and growth over time. You have to look at your own situation. So, for example, if you have a mega group and you're a dominant player in town, this may not be the right fit for you. But you know you're seeking outside help, this is a way to transition over and transition over a lot of the liability that comes with owning a practice and finance. And personal liability, which we all sign for whenever we have any transaction worth any financial salt, we have to sign away personal guarantees and so on, so forth. Those are things that can mitigate some of that risk that you face with us with really a fixed we're dealing with a fixed-income market. There's a fixed-price market, and we don't have leverage to increase prices when delivery costs go high and the supply companies increase their pricing because of the fuel costs. n

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