For-profit health systems ramp up ASC expansion to offset tax law cuts

Editor's Note

Major for-profit health systems are accelerating investments in ambulatory surgery centers (ASCs) as they brace for long-term revenue reductions under the federal “One Big Beautiful Bill” tax law. Systems including HCA Healthcare, Tenet Healthcare, Community Health Systems (CHS), and Universal Health Services (UHS) outlined aggressive ASC growth strategies during second-quarter earnings calls, even as surgery volumes declined across the board, Modern Healthcare July 30 reports.

Executives pointed to falling consumer confidence and stricter immigration policies as factors behind lower elective surgical volume. While second-quarter surgery volumes declined—by as much as 2.5% at CHS and 1.7% at Tenet—executives expect volumes to rebound and are leaning into ASC growth as both a strategic hedge and long-term investment. Tenet, through United Surgical Partners International (USPI), acquired seven ASCs and one surgical hospital last quarter—many specializing in orthopedics, neurosurgery, and ophthalmology. Tenet’s USPI unit alone operates 547 ASCs and plans to exceed its $250 million outpatient M&A target for 2025. CHS and HCA also announced plans for new ASC openings in several markets, with CHS preparing to open new ASCs in Alabama and Arizona.

The strategy comes as health systems are bracing for cuts in Medicaid provider taxes and state-directed payments starting in 2028. CHS projects a $300–$350 million earnings hit over a decade; UHS estimates up to $400 million in lost revenue by 2032 under worst-case scenarios. Leaders say expanding outpatient services is key to weathering these changes and meeting payer demands to shift care from inpatient to lower-cost settings. Meanwhile, Tenet highlighted a 28% year-over-year jump in revenue from ACA exchange plans as another key growth channel.