As more surgeries move outside the hospital, healthcare systems use joint ventures to adapt

The shift of surgical care into outpatient settings has been underway for years. What's changed more recently is the speed of that shift, with policy, economics and patient preference all pushing in the same direction.

“It’s a confluence of a number of really powerful individual factors,” said Ky Chaffin, manager of healthcare banking for hospitals and health systems at BOK Financial®. "Taken together, it's created a tidal wave."

When surgeries move out of the hospital, revenue, physician relationships and referral patterns may move with them.

As a result, health systems are facing increasing pressure to stay connected to high-performing specialists while adapting to a different economic model, according to Chaffin.

That's one reason joint ventures between health systems and physicians, particularly in ambulatory surgical centers (ASCs), are drawing greater attention. For many organizations, they are becoming less an optional growth strategy than a practical response to the accelerating shift in care delivery, he explained.

Why the outpatient shift is accelerating

Healthcare leaders have been tracking the outpatient migration of surgical procedures for years. What feels different now is the pace.

Policy and reimbursement changes continue to push care toward lower-cost settings. The ongoing movement toward site-neutral payment-paying similar rates for the same service regardless of where it's performed-has increased pressure on traditional hospital outpatient economics. At the same time, as Medicare removes more procedures from its inpatient-only list, more surgeries can be performed-and paid for-outside the hospital.

Chaffin said those changes matter because they influence where procedures, along with the revenue tied to them, ultimately land.

Según data cited from Trilliant Health, the average payment differential between inpatient and outpatient rates across 285 removed procedures exceeds $16,000 per procedure. After knee and hip replacement procedures were removed from the inpatient-only list, inpatient volume for those procedures dropped sharply.

At the same time, it is becoming more expensive for some health systems to employ physicians directly.

Hospitals have historically relied on specialist employment arrangements to maintain alignment and protect surgical volume, but physician subsidies continue to rise while margins tighten. Kaufman Hall’s Q4 2025 Physician Flash Report found physician subsidy per provider rose to approximately $315,000 during 2025.

“Physicians are working harder, but the economics are tightening for both the provider and the health system,” Chaffin said.

Patient behavior is reinforcing the trend. "When clinical outcomes are comparable, patients increasingly favor lower-cost, more convenient settings," said Chaffin.

Growing confidence in the safety and suitability of outpatient care has helped accelerate that shift, he added. Financially, outpatient settings can also operate efficiently. Even with lower reimbursement, many established ASCs can operate profitably because they are built around a narrower, more efficient model of care. That combination-policy, economics and consumer preference-is fundamentally changing the site-of-care landscape.

Why it matters strategically

For hospitals and health systems, the issue extends beyond procedure volume.

Surgical services have long supported not only revenue, but also physician alignment, referral relationships and competitive positioning. As more procedures move into outpatient settings, preserving those relationships becomes increasingly important.

“At the center of the issue is a long-standing reality: Patients tend to follow physicians, not institutions,” Chaffin said.

If physicians shift procedures elsewhere, patient volume often follows. Over time, that can influence referral networks, market share and a hospital's role in its own market.

For finance leaders, the challenge is no longer simply protecting revenue streams. It is adapting to a lower-cost care environment while maintaining alignment with the specialists who drive procedural volume and patient relationships.

Why joint ventures are gaining attention

That dynamic is fueling growing interest in joint ventures between health systems and physicians, particularly around ambulatory surgical centers.

In a typical arrangement, a health system and physician group co-own and operate an ASC, sharing governance, decision-making, investment and returns. The structure gives physicians a stake in the setting where more care is moving while allowing health systems to remain connected to critical specialists and patient volumes.

Interest in such partnerships appears to be growing. A report citing VMG Health found 71% of leaders said they would consider partnering with a health system, up from 57% the previous year.

"There's a necessity element to this," Chaffin said. "If we want to remain financially relevant in the market, we must be aligned with the highest-performing physicians in our markets."

Still, not every joint venture succeeds. Industry leaders say successful arrangements typically require more than shared ownership. They depend on clear decision-making, shared financial expectations and experienced operators. Decisions involving staffing, scheduling, equipment and workflow all require ongoing alignment between physicians and health systems.

The day-to-day management matters just as much. "You need to run these things like a little hospital," Chaffin said.

He added that the strongest partnerships often work because each participant focuses on their area of expertise: physicians lead clinical care, experienced operators manage facility operations, and financial partners help structure ownership and long-term economics.

“You need the right expertise and specialists to help navigate these changes,” Chaffin said.

The cost of waiting

For organizations that delay developing a coherent outpatient strategy, the risks may continue growing.

Según Sg2’s 2024 Impact of Change report, ASC volume is projected to rise 21% to 44 million procedures between 2024 and 2034, while overall outpatient volume is expected to increase 17% during the same period.

The consequences can extend beyond revenue loss. Physician alignment can weaken. Referral patterns can shift. Competitive standing can erode.

In Chaffin’s words: “In a word, you risk everything by not having a coherent strategy.”