Build vs. Buy: Choosing the Right Path for ASC Growth and Long-Term Strategy
Deciding whether to build a new ASC or acquire an existing one requires looking beyond profits at governance, structure, and future exit potential to ensure long-term success.
Ambulatory surgery centers (ASCs) remain a leading source of growth and margin strength within healthcare, supported by sustained procedure migration. With more than 10,000 surgery centers now operating across the country, these facilities represent a strategic asset for independent physician groups, health systems, and investors alike. But as organizations look to enter or expand in this space, they face a fundamental question: Should we build a new ASC from the ground up or buy an existing facility?
This decision carries implications beyond immediate operational concerns. The path you choose today will shape your growth trajectory, and—critically—your options when it comes time for a transaction or exit. Here’s what to consider for each approach and how to make a decision that aligns with your long-term strategy.
The Evolution of ASC Ownership Strategy
The ASC landscape has shifted in the last five years. Many surgeons used to hop between centers pursuing better margins and distribution arrangements. When one facility offered higher returns, surgeons moved their cases there. Facility revenue was critical to offset declining professional fees.
That trend is slowing. Today’s physicians are thinking more strategically about long-term partnerships, and they’re asking about ASC ownership opportunities from the very beginning of employment discussions.
“Everyone recognizes the importance of starting a partnership from the beginning—one that can carry through to a transaction, whether the deal is coupled with a practice or serves the facility on its own.”
Ownership should be integrated into practice philosophy from day one. Organizations that treat it as an afterthought often find themselves with structures that limit future options, while the most successful groups approach these partnerships with the same discipline they bring to the OR.
Building a New ASC: Critical Planning Factors
A ground-up build lets you do it right from the start, but only if you think past opening day. The real work is planning for the ASC you’ll need years from now.
Strategic Foundations
Start by considering your exit strategy, even if a transaction seems far off. How might ownership evolve? What would make this facility attractive to potential partners or buyers down the road? These questions should inform your ownership structure, operating agreements, and partner selection from the outset.
Your surgical mix matters, too. The most profitable centers typically balance high-margin procedures, often those requiring implants with strong reimbursement, with reliable “bread and butter” cases. Think orthopedics paired with podiatry. Procedures without implants can generate revenue with lower overhead, creating a sustainable financial foundation.
Location, payer relationships, and physician alignment round out the strategic considerations. Maybe your surgeons are all part of the same practice or the same referral network community. The goal is to create a center that’s profitable today while positioned for growth tomorrow.
Avoiding Common Pitfalls
Legal and governance missteps are common pitfalls in new ASC development that can be difficult to remedy down the road. Operating agreements with overly restrictive covenants, unclear entrance and exit provisions, or misaligned ownership structures can block future transactions. Don’t wait to course-correct these structural issues later. Building them correctly from the start saves enormous headaches and preserves value when opportunity knocks.
Buying an Existing ASC: Key Considerations
Acquiring an established surgery center offers distinct advantages, starting with turnkey operations. You’re buying proven performance, established relationships with surgeons and payers, existing staff, and, in certificate-of-need (CON) states, regulatory approvals that may be difficult to obtain otherwise.
Due Diligence Priorities
The quality of your due diligence can make or break an ASC acquisition. Start with ownership structure. Is it clean and straightforward, or complex with multiple physician groups and conflicting agreements? Complex ownership creates risk and can impact valuation.
Review the operating agreements carefully. Do they allow for the kind of integration and changes you envision? Are there provisions that could block future growth or transactions? A careful review of these documents can uncover important nuances.
Dig deeper than the summary numbers to uncover the real financial story. Are the financials accurate? How’s the revenue cycle management performing? What’s the actual collection rate versus potential? Is utilization optimized, or is there untapped capacity? The cleanest-looking deal can be undone if the underlying financial story doesn’t hold up.
Don’t overlook referral patterns. Are the current surgeons aligned with your strategy? How stable is the patient flow? Misaligned referrals or unstable patient flow can quickly undermine projections, making these dynamics critical to understand.
Integration Realities
Even the best acquisition comes with integration challenges. You’re inheriting relationships, culture, and operational practices. In some cases, you’re also inheriting partners whose vision may not fully align with yours. Managing this transition requires a clear strategy.
Aligning Build vs. Buy with Your Long-Term Goals
Your decision between building and buying should flow from your broader objectives.
For Practices Planning Eventual Sale
If you anticipate selling your practice or pursuing a transaction with private equity (PE) or another strategic partner within the next several years, building offers the most control. You can keep ownership structures as clean as possible, avoiding the issues that often kill deals.
Every physician may want equity in the ASC, but each additional ownership group adds complexity. Is ownership split between three groups or five? Have you had legal conversations about unwinding this structure if needed? Buyers will price in that complexity or walk away.
In other cases, a profitable practice is ready for a transaction but is unable to include the ASC because of how ownership was structured years ago. This happens more often than you’d think, and it’s difficult to transact with a practice without the ASC. Buyers want that facility revenue.
For Hospital Systems and Joint Ventures
Health systems should view ASCs as strategic assets, not optional add-ons, as surgical care continues migrating to outpatient settings. Building allows you to design the facility around your specific organizational needs. Buying can make sense when speed to market matters or when acquiring a well-performing center strengthens your network immediately.
Joint venture structures can work for either approach, though they require careful understanding of regulatory requirements and fair market value (FMV) considerations. When hospitals partner with physician owners, regulatory scrutiny intensifies around whether physicians receive undue financial benefit, even as the government recognizes the value ASCs bring to the healthcare system through lower costs. Rigorous FMV analysis isn’t optional in these arrangements.
For PE-Backed and Growth-Focused Organizations
With a limited supply of high-performing ASCs available, acquiring existing ASC platforms or networks, like recent deals involving 40-plus surgery centers, provides immediate scale.
When those opportunities aren’t available, investors often turn to specialty groups that don’t yet have an ASC but could support one. Strategic, selective builds then fill gaps and expand reach. Orthopedics, cardiology, and ENT are a few leading targets. If a group has enough case volume, a new build becomes a natural value-creation strategy.
The economics go beyond procedures. PE firms want to capture the full patient experience: physical therapy, imaging, durable medical equipment (DME), and other ancillaries that round out the revenue model. An ASC keeps that value inside the platform rather than leaking out to hospitals or unaffiliated centers.
Where Growth Meets Strategy
ASCs have become one of the most attractive growth and margin plays in healthcare, driven by ongoing site-of-care shifts. Payers are increasingly supportive, patients prefer the convenience, and many physicians recognize the benefits of facility ownership early on. The real question isn’t whether to participate in this growth, it’s how to do so in a way that delivers both near-term performance and long-term value. It all starts with choosing the right path: build or buy.
Evaluating whether to build or buy an ASC?
