Deal activity in the Outpatient Surgery Center market has slowed sharply in 2025 due to a number of headwinds that have extended timelines and reduced transaction momentum. The sector, encompassing ambulatory surgery centers (ASCs), offers 30-50% cost savings on common procedures like colonoscopies and orthopedics compared to inpatient settings. These translate to higher EBITDA margins for operators and favorable reimbursement under value-based care models, yet these advantages have not spurred robust deal flow amid broader headwinds.
Year-to-date (YTD) through October 27, 2025, 29 deals have been announced, compared to 57 in fiscal 2024, 38 in 2023 and 45 in 2022. At this point, with nearly two months left in 2025, there is little chance that deal totals will catch up to previous year totals.
Despite the decline in overall deal totals, private equity participation in the Outpatient Surgery Center market has increased slightly to 21% of deals (six of 29) from 18% in 2024. Health systems and operators account for the majority of these transactions, targeting add-ons in specialties such as orthopedics and gastroenterology to build scale.
The largest transaction announced so far this year is Ascension‘s $3.9 billion acquisition of AmSurg, announced June 17 and pending closure by year-end or early 2026. The deal adds 250 outpatient surgery centers across 34 states, supporting Ascension’s push to expand its ambulatory footprint and adapt to the shift from inpatient to outpatient care. AmSurg’s primary focus on gastroenterology, ophthalmology and orthopedics aligns with Ascension’s referral networks.
Most deals announced in the Outpatient Surgery Center sector this year have not disclosed prices, underscoring the private nature of many tuck-ins and strategic add-ons. With more than 10,000 outpatient surgery centers in operation, according to Definitive Healthcare, the market remains highly fragmented. While the sector remains attractive for its cost efficiencies and procedure migration from hospitals, several interconnected headwinds are constraining deal flow.
Why Deals Are Down: Key Headwinds in 2025
Several interconnected factors have fostered a more cautious environment for buyers and sellers in the Outpatient Surgery Center market. These pressures prolong due diligence and negotiation periods while dampening appetite for larger platform acquisitions.
High borrowing costs remain a primary barrier. The Federal Reserve’s benchmark rate stands at 4.00-4.25% as of late October 2025, following a 25-basis point cut in September amid ongoing inflation monitoring. This environment squeezes leveraged buyout structures favored by private equity firms and raises the cost of capital for ASC operators and health systems.
Reimbursement dynamics add another layer of uncertainty, especially since Outpatient Surgery Centers are reliant on procedure-based volumes. The Centers for Medicare & Medicaid Services proposed site-neutral payment adjustments in its 2026 Physician Fee Schedule, released on July 14, 2025. These reforms aim to equalize Medicare payments for procedures in ASCs and hospital outpatient departments. The recent changes have buyers double-checking numbers before pulling the trigger. This is especially in Medicare-heavy spots like Texas, which tops the list for deal volume with eight announced so far this year, versus six announced throughout all of 2024.
Labor challenges, exacerbated by clinician shortages, have extended timelines in ways that disproportionately affect ambulatory settings. Medical group practice operating expenses rose about 11% year-to-date through mid-2025 compared to 2024, per MGMA data driven by demand for specialized roles in anesthesiology and surgical tech. These shortages inflate operational expenses and complicate post-merger integrations. Health systems, which dominate buyer activity, are particularly sensitive as they balance inpatient staffing mandates with ambulatory expansions.
Heightened regulatory oversight at state and federal levels creates added hurdles, given the Outpatient Surgery Center market’s fragmentation and the resulting antitrust concerns. The Federal Trade Commission enforces antitrust laws in health care markets, scrutinizing consolidations for potential anticompetitive effects in specialties like gastroenterology. In parallel, states vary in certificate-of-need (CON) requirements. Some states, like Texas, have no approvals needed for ASCs to boost capacity.
Meanwhile, Georgia, the second most active state for M&A in the sector with four deals announced YTD, is easing CON requirements in high-population counties. Others like New York and Illinois maintain rigorous standards for facility expansions and physician ownership transfers. This mixed regulatory landscape has contributed to extended review periods for deals.
Collectively, these headwinds foster a bifurcated market. The Outpatient Surgery Center M&A market remains resilient for strategic add-ons in high-growth specialties but challenging for transformative mergers. As 2025 draws to a close, stakeholders eye potential rate cuts and clearer reimbursement guidance as catalysts for renewed momentum. We’ll have to wait and see if these shifts spark a broader uptick in deal flow within the sector.
