Ep. 106: Colin Park – ASC Leader Expectations for 2025
Here’s what to expect on this week’s episode. 🎙️ New survey reveals top ASC challenges for 2025 📊 VMG Health just released its first ASC Leader Expectations for 2025 survey, gathering insights from nearly 150 ASC leaders. Colin Park, Managing Partner, shared the following six key takeaways:
✅ Physician recruitment & retention – 40% of leaders cited these as top challenges, with fewer young physicians entering the market and increased competition from hospitals, PE groups, and other ASCs.
✅ Anesthesia costs rising – Anesthesia stipends are becoming a major financial burden, especially for lower-volume centers that may struggle to stay profitable.
✅ Labor & supply costs outpacing revenue growth – Salaries and hourly rates have surged post-COVID and haven’t receded, while medical supply costs continue to climb faster than reimbursement.
✅ 84% of independent ASCs aren’t looking to sell – While most aren’t planning a sale in 2025, many are open to strategic partnerships to strengthen operations.
✅ Health systems increasing outpatient investments – More hospitals are looking to partner with ASCs to capture volume shifting away from inpatient settings.
✅ Private equity’s ASC interest is growing – PE involvement in ASCs has expanded beyond physician practice acquisitions, with more direct investments expected.
How do these findings compare to what you’re seeing in your ASC?
Episode Transcript
[00:00:00] Welcome to this week in Surgery Centers. If you are in the ASC industry, then you are in the right place every week. We’ll start the episode off by sharing an interesting conversation we had with our featured guest, and then we’ll close the episode by recapping the latest news impacting surgery centers.
We’re excited to share with you what we have, so let’s get started and see what the industry’s been up to.
Erica: Hi everyone, here’s what you can expect on today’s episode. Today we are diving into the latest insights from VMG Health’s newly released report, ASC Leader Expectations for 2025. This report is based on a survey of 137 ASC leaders, including admins, CEOs, VPs, and clinical directors from both independent and joint venture centers.
To break down the key takeaways, our host Nick Latz sat down with Colin Park, who is the Managing Director at VMG Health. Together, they explore [00:01:00] what ASC leaders are prioritizing for the year ahead and what trends Colin and his team uncovered. Our conversation with Colin, we’ll switch to our data and insights segment. HST released our annual State of the Industry report in September, which analyzed client data from 590 surgery centers. Today, we’ll spend a few minutes breaking down on time starts. We’ll look at which specialties have the longest delays, which have the shortest, and the operational impacts of starting surgeries late.
Hope everyone enjoys the episode, and here’s what’s going on This Week in Surgery Centers.
Nick: Colin, welcome to the show. Thank you. Good to be here. Colin excited to dig into the VMG 2025 ASC leader expectation survey today. Can you share, what this survey is all about? How long you guys have been doing it and what ultimately you’re trying to uncover.
Colin: Yeah. Yeah. So we’ve done a survey similar to this for [00:02:00] hospitals, health system, sub industry over the last few years.
So we thought this would be something that would be pretty interesting to do for the ASC. Market. So this was actually our first year to do this survey. We wanted to capture a broad array of individuals with which to reach out to get feedback on. So we have, we have individuals that are.
Admins at independent surgery centers. We have folks that are work in development teams, or they may be market presidents, regional vice presidents of larger management companies some folks from hospitals, health systems that have outpatient strategies, and then even some P groups that have ASE strategies.
So I think in all we had close to about 150 Total respondents geographically pretty diverse. Yeah, it was our 1st year to do this. So we were pretty excited to just get, everyone’s perspective on what the expectations are for 2025 for the ASC [00:03:00] market.
Nick: Congrats on getting the first one published.
It feels like the first one is always the hardest one. And it’s a bunch of great information as we’ll get into. So hopefully this becomes an annual trend. What’s the response been so far from the industry?
Colin: Yeah, it’s been well received. I definitely think that we will certainly do this every year going forward.
I think it provides some good insight. So we will, continue to build on it. But definitely well received. And one of our more. Downloaded items from our website
Nick: fantastic. So digging into the survey and the report at a high level. What are some of the interesting trends that popped out from the survey?
Colin: Yeah, I would say high level just on the revenue side, which, is probably the more obvious item is just, physician recruitment, retainment of top talent on the expense side. The big things that came up were just labor shortages, labor costs, supply costs. And I think there was some pretty varying in different outlooks [00:04:00] as far as transaction activity.
I think part of that was just driven by the broad array of individuals we spoke with. So I think, different outlooks on transaction activity as well as, strategic partnerships.
Nick: Great. And on the revenue side, you talked about physician recruitment, which is obviously a big driver.
You touched on retention too, and I saw a stat in your survey that said, 40 percent of respondents listed both the recruitment side. And the retention side is something that would be a challenge going into 2025. Did you see any color or do you guys have any hypotheses around the retention side of physicians and what kind of the struggles and challenges are potentially there?
Colin: Yeah, I think they quasi go hand in hand. On one, one component is just aging physician base. So you don’t have as many younger physicians coming into the market as you do. Retiring and [00:05:00] leaving the market. So you’ve got that. I think there’s just a lot of competing opportunities for physicians. I think you’ve got competing ASCs one, you’ve got competing practices, you’ve got private equity is now becoming pretty heavily involved.
And so they’re trying to roll up physician practices under their umbrella and, plug them into their surgery centers, and then you’ve got hospitals and health systems that are. In the last few years, pretty active and employing specialized physicians. And so you’ve just got a lot of competing interests for physicians that I think they have a lot of different opportunities to choose from.
So I think that’s leading to Difficulty with recruiting new physicians and keeping those really really good physicians in their centers.
Nick: Certainly and he touched on transaction activity to one of the stats you had. I thought was super interesting. I haven’t seen a stat like this yet is I think it was 84 percent of [00:06:00] independent A.
- C. S. We’re not planning a sale activity, at least in, in 2025. Yeah, I think that’s an interesting dynamic when you’ve got groups, whether it’s management companies or private equity or health systems that have a strategy of rolling up independence and are planning on doing it in 25. And so I think that’s an interesting dynamic.
I think that’ll be one, it’ll be super fascinating to see if that’s consistent from year to year, as you guys continue to do this. Yeah,
Colin: no, I agreed that statistic was interesting to see because it was there was another one that talked about strategic partnerships that almost was against that statistic.
It seemed like independent centers weren’t. Interested in, completely selling their business or selling a large chunk of ownership, but they were interested in maybe bringing on a strategic partner.
Nick: Yep, yep.
Colin: Yep.
Nick: Great. Drilling in on financial challenges. [00:07:00] How about the financial challenges?
What did ASC say that they’re struggling with right now? Is there at least the financial challenges?
Colin: Yeah, I think most all that was brought up was on the expense side. Or largely on the expense side of the equation. So I think the biggest, one of the biggest ones is anesthesia. Years ago, anesthesia is something that In the ASC space, we really never discussed, I did, I do valuations, fair market value opinions for surgery centers.
And that was a line item that I just never saw in the ASC financials. And then, a couple of years ago, it started to be seen in different markets and whatnot. Now you go to any surgery center conference and it’s one of the best things there. And so I would say anesthesia stipends are hitting.
Centers pretty hard and the unfortunate part of it, I would say, is that those centers that historically, 5 years ago, they may have been profitable, but lowly profitable. So maybe. A hundred, a few hundred K of EBITDA a [00:08:00] year consistent, but not just, knocking out of the park. Those seem to be the centers that are getting hit the hardest and most consistently with these anesthesia stipends.
And it’s a function of just not having the volume or the case mix to prevent having to pay that stipend to the anesthesiologist. And anesthesia groups. So I’d say that’s number one. Number two, drugs and medical supplies, I would say, the growth in those costs over the last year, they’ve just consistently outpaced reimbursement growth.
And drugs and medical supplies continue to rise, but I think the other big expense would be on the labor side. Yep. Everyone saw. COVID timeframe, like contract labor just went through the roof. I’d say we’re starting to see that tail off market dependent. Most markets that we’re seeing a decrease in contract labor, but what you also saw through COVID was just salaries and hourly rates just went really high and they went through that hadn’t receded.
And so it’s climbed steadily. It jumped up [00:09:00] sharply and it’s continued to climb. It hasn’t receded. And so if you look at a center today versus a couple of years ago, your labor costs as a percentage of revenues is, significantly higher than it was. And it hadn’t come down. And I think Don’t anticipate it.
It’ll come back down anytime soon. And then I think lastly, just capital investment for a aging facilities that are needing to make significant capital investment in their facility, construction costs and whatnot. It’s not cheap now. And major capital items are. Pretty expensive currently expected to continue to be
Nick: sure.
Okay. Kelly, I wanted, I want to circle back to one of the points that you made around, Hey, ASCs aren’t looking to sell their business out rates, but are open to strategic partnerships. And I think you guys asked a question specifically around that in terms of, Hey what kinds of partnerships or partners would you consider?
What did the data show there?
Colin: Yeah, I think and [00:10:00] it depends upon what they want out of a partnership. And so do they need help with reimbursement? Do they need help with recruiting? And so what we typically see is a management type entity that has some ownership, but takes an active role in management.
So they’re able to help on both the revenue and. So they’re able to help with managed care negotiations and helping with getting better contracts, able to streamline on the expense side whether it’s through helping with like billing and collections and contract expenses and whatnot. And so I think that’s primarily what, they were looking at from the perspective of the strategic partner.
Nick: Got it. It looks like there’s a couple other groups there listed to in terms of. Health systems and private equity. Would you assume on the health system side, it’s largely around physician recruitment and access to physicians [00:11:00] and case referrals.
Colin: Yeah. Yeah. I think on the health system side, a lot of health systems are starting to see the writing on the wall. So they’re seeing that you’re going to start to have volume decant from the hospital. And so it’s, if they’re going to lose some of this volume, that’s historically been done in the hospital.
Why not try and capture that? And so for those health systems that historically may not have had an outpatient strategy, they’re starting to really think about what they can do to have that. And on one hand, hospital or health system can start from scratch or they can go and look at a established.
ASC in the market, and so they can hit the ground running effectively also, health systems, hospitals that may have historically had a HOPD or hospital outpatient department can think that, or they may want to strategically align with physicians in the market. So it could be a matter of converting that HOPD to a freestanding facility.
And by doing so, they’re allowing them to bring in physicians and invest in [00:12:00] that center so they’re able to syndicate with physicians, which helps with that alignment with that group. And so that’s what I see a lot on the hospital side. And then with private equity, at the very beginning of private equity involvement, we really didn’t see much direct investment from pe.
In the surgery centers is more on the clinical side. Probably may align with the GI practice that also has an ASC. And so we’ll become heavily involved in the practice side and then maybe tangentially have some ownership in the ASC, but I would say over the last few years, we’re seeing much more.
Investment and directly through different platforms. And I think that’s just going to continue to grow. And I think that just speaks to the ASC. And that it’s highly regarded amongst private equity groups that, that they want to become involved. And so we’re probably going to see that to continue to grow.
Nick: Okay. Wanting to circle back as well [00:13:00] to anesthesia, which you talked about in terms of, key trends of challenges and struggles What models, I know you guys asked the question about what models are most prevalent from an anesthesia perspective. What did the data show there?
Colin: Yeah, so we see some employment type arrangements where you may have a center that employs the CRNAs and anesthesiologists.
Don’t see that too frequently, but certainly do see it in some markets. I would say By far, clearing away the biggest that we see is just, contracted with the independent group and 2 different structures, for some centers and a larger market that has either a really good case mix or a really good pair mix there, it’s.
fantastic center, anesthesiologists want to work for that center. They want to provide coverage for that center. Conversely, if you have a center that isn’t necessarily able to fill the block time, they’re, they’re [00:14:00] not able to set case on case or they have a not desirable That’s where you get into the territory of that group requiring like a stipend or a minimum that they must meet.
And so that those 2, the similar structure is just a function of, does the center have to pay a stipend or not? So that’s by far in a way what we see the most. And I would say 1, Something that’s a little bit newer. I’m hearing more about. I haven’t seen it personally too much, but I think it’s going to become a little bit more prevalent would be our in conscious sedation type programs.
That’s obviously going to be dependent upon the types of cases. You’re not going to necessarily be doing that for very high acuity. Type procedures, but maybe more on like the ophthalmology type. While I don’t think it’s super prevalent now, I think it’s something that may be explored more and more as anesthesia, CNR, CRNA labor costs.
Are continuing to climb. So it’s [00:15:00] getting more and more expensive. So I think, alternatives like our unconscious station programs are going to be explored more and more.
Nick: Yeah. Yeah. And not surprising to see the yeah, I think if we trended this survey, we’d see that the stipends.
Or on the rise, either supply and demand dynamics. And I think to your earlier point that really hurts the lower volume centers that, you know, that to your point or break even or profitable, but not highly profitable yet because they haven’t scaled case volume and those lower levels of volume that the stipends can really eat into that.
Profitability.
Colin: Yeah, absolutely. And I think that’s where we see a lot of those centers of the centers that are looking for a strategic partner. They’re in a way, looking for a lifeline because they see the writing on the wall that. While 5 years ago, they may have been consistently profitable, you get hit with an anesthesia stipend, your labor costs are going up, you ultimately see where that’s going to lead, and that’s where the strategic [00:16:00] partner is able to come in and they’re able to, potentially help provide some lift on the revenue side, or they can help with bringing in new physicians or help on the Expense side with being able to leverage negotiations with suppliers and whatnot.
So I think that’s where we see a lot of the strategic discussions coming in and bringing in a strategic partner for those centers that maybe on the verge of really starting to struggle.
Nick: Colin, final question for you. We do this each week with our guests. What’s one thing our listeners can do this week to improve their surgery centers?
Colin: Yeah. Myself, I’m not involved on the operational side of ASCs, but more on the transactional side. So I’ll say this, I’ll speak more to kind of those centers that I was just talking about that, the centers that may be in the market that are independent, that may be looking at a strategic partner or potentially selling some ownership.
I would say first, decide what you want out of a partnership. Do you want help? Is your center currently being [00:17:00] managed by physicians and those physicians just want to be physicians and they don’t want to manage the business anymore? So do you want a strategic partner to help with managing the day to day operations?
Do you want help with managed care contracting? Do you want help with staffing or billing and collection? So I would say first and foremost, it’s Decide what you want to get out of a partnership before you, start going down the path of getting a partner. Now, secondly, I would say, most important, you get your house in order.
So get your financials cleaned up, get a really good grasp on the economics of the center. Look at your cap table. Does your cap table need to be cleaned up? Do you have a bunch of, positions that have ownership that have retired or have relocated or maybe violating 1 3rd from a violation perspective, clean up your cap table, basically get all your financials together and really be able to tell your story or the story of your center to potential suitors.
And so I think those are the 2 biggest things is just. First decide what you [00:18:00] want from a potential partner and then just having everything in order and ready to go to where once you start moving towards potential, she’s your partnership. Everything’s ready to go.
Nick: Fantastic. Colin, thanks so much for joining us today.
Colin: Yeah, absolutely. I appreciate
Nick: it.
Erica: HST Pathways released an updated version of our State of the Industry report in September, highlighting best practices, key process steps, and KPIs for every step of the patient journey and for nearly every recurring administrative duty. Most importantly, using our own unique data set from our clients, we were able to extract data points so that anyone in the industry could benchmark themselves against their peers.
Two disclaimers, we only pulled data from clients who gave us permission and we omitted any extreme outliers. So today, we’re going to take a look at on time starts. On average, surgeries are delayed 15. 4 minutes. We broke this metric down by specialty, and here are a few callouts. [00:19:00] Performing the worst was general surgeries.
So that had an average of a 27. 2 minute delay. And then performing the best was ENT with an average delay of only 8. 1 minutes. And in the middle, just to call out a few of the most popular specialties, GI averaged 15. 7 minutes. Ophthalmology averaged 15. 1. And orthopedics averaged 13 minutes. But overall, let’s focus on the average of all specialties, which again, was a 15.
4 minute delay. While this might not feel significant, delays can cause chaos in an ASC. When surgeries are delayed, it can compound over the course of the day, which can decrease OR utilization, have a negative impact on patient satisfaction, and rack up overtime costs for staff. And obviously there are a ton of factors that go into getting a case to start on time.
This could be the patient’s doing or the surgery center’s doing, but [00:20:00] let’s just focus on what the center can do to improve the first. Consider creating an incentive program for punctuality. Whether it’s tied to bonuses, recognition programs, or even awarding departments for the most on-time starts incentivizing the team can create a culture of accountability.
The second, streamline your pre op process as much as possible. Delays often originate from inefficiency. So this can be caused by incomplete patient prep, missing documentation, or equipment not being ready. You can also focus on automating parts of the pre op workflow, such as patient clearance and documentation checks, which can help minimize manual errors that will slow down the start of surgery.
The third, monitor on time start metrics as closely as you can. Tracking these metrics is critical for identifying patterns in delays, which will then help you identify solutions. So whether it’s specific surgeons, procedures, or time slots that constantly run [00:21:00] late, having that information will
And then one thing that has been extremely effective in terms of mitigating damage done by delays Think about implementing a first case on time start policy if you have not already. The first surgery of the day sets the tone. So if the first case starts late, it creates a ripple effect of delays for the entire schedule.
I’ve also heard from facilities who will not perform the first procedure of the day if it’s starting more than 15 minutes late, just because that ripple effect can be so harmful. Just make sure you hold all team members accountable from the OR staff to the surgeons for being ready on time, and get everybody involved to come up with ideas and get involved in the process of trying to, improve this metric.
If you do want to see the average on time starts for all 12 specialties, or if you’re interested in more data points and use cases, head to our website to check out the full state of the industry report to get your hands on even more data. [00:22:00] And that officially wraps up this week’s podcast. Thank you as always for spending a few minutes of your week with us.
Make sure to subscribe or leave a review on whichever platform you’re listening from. I hope you have a great day and we will see you again next week.