More than half of all total joint replacements in the U.S. could move out of the hospital by 2030 (ORTHOWORLD 2024 Annual Report, p. 91). The shift is already well underway: the share of Medicare joint replacements performed in outpatient settings — hospital outpatient departments and ambulatory surgery centers — climbed from roughly 14% to roughly 69% between 2018 and 2022, a move the source describes flatly as “dramatic” (Orthopedic Network News / Curvo Labs, 2023, p. 2). On average, the big recon companies now pull about 15% of their knee sales through ASCs and are seeing double-digit growth in that setting, with Zimmer Biomet projecting that 40–60% of joint replacement cases will happen in ASCs within five years (ORTHOWORLD 2024, p. 42).
For a founder building an orthopedic, spine, or biologics company, that migration reads like a tailwind. It is. But the mistake I see most often is treating the ASC as a smaller, friendlier hospital — same sale, fewer committees. It isn’t. The ASC is a different economic machine, and it punishes the operational slack that a hospital quietly absorbs.
If you design the company for that machine from day one — the product, the back office, and the channel — the migration works for you. If you bolt an ASC strategy onto a hospital-shaped company, you inherit the cost structure of the place everyone is trying to leave.
Tiger Buford made the bull case for this directly in OrthoStreams: an “ASC-only” strategy can work for an ortho startup, provided it’s built that way from day one, and he laid out an eight-step playbook for pulling it off — from ASC-centric product design to single-use kits to targeting surgeon-owned facilities (Buford, “The ‘ASC only’ customer strategy for startups will work,” OrthoStreams, 2026). His playbook is the what. What follows is the how — the operating model underneath those moves, and why the economics of the ASC make each one non-optional rather than nice-to-have.
The short version
The ASC is not a smaller hospital. It’s a different economic machine, and it rewards a company built for it across five decisions:
- The economics invert what you optimize for. Surgery centers accept far lower reimbursement on purpose. There’s no hospital-sized margin to hide operational slack in, so every inefficiency lands directly on the cost of the case.
- Your back office is part of cost per case. High case volume at thin margins multiplies the transaction load. If reading, chasing, and typing every order takes a person, your cost per case climbs with volume instead of falling.
- Your SKU list is a product-strategy decision. Reverse logistics and shrinkage quietly eat margin. Sterile-packed kits and fewer SKUs turn the incumbents’ complexity into your advantage.
- Pick the channel for the surgeons it already touches. Deal velocity comes from distributors already calling on your target surgeons with adjacent products — and you keep that channel by being the easiest manufacturer to do business with.
- Sell to the economic owner. In a surgeon-owned ASC, the clinical buyer and the margin owner are the same person — which makes the financial case the close, not the follow-up.
None of these stand alone. They compound, and that compounding is why a focused startup can take share from companies with far more resources.
Why the ASC changes the math
Start with reimbursement, because everything else follows from it. Insurers pay a facility fee to move a case out of the hospital precisely because it costs them less. An SVP of operations who runs seven ASCs described the mechanism plainly in a Tegus expert interview: insurers “are actually paying a facility fee for the surgery to be done in an outpatient center versus the hospital… they’re giving you an incentive to bring it to an ASC where their overall cost is going to be less.” Asked how big the cost gap is, he put it at “50% is a good number to take in industry-wide.”
That number is one operator’s estimate, not a published figure — but the direction is the whole point. The surgery center accepted a structurally lower rate on purpose, and it makes the model work on volume and thin margins. There is no rich hospital reimbursement sitting on top of the case to hide inefficiency in.
So the cost of running your operation stops being overhead and starts being cost per case. Every purchase order someone retypes into the ERP, every charge sheet that sits for three days before it gets submitted, every invoice that goes out late and ages in AR — in a hospital, that disappears into volume and higher rates. In an ASC, it lands directly on the margin of the case. The same operator was candid that his inventory management was “pretty routine, pretty immature,” running POs through a basic system with “no predictability.” That slack survives in a hospital. It compounds in an ASC.
This is the lens for everything that follows. Three decisions determine whether you are built for the ASC or just selling into it: how you run the back office, how you design the product, and how you pick the channel.
1. The back office is part of cost per case
A device company’s instinct is to treat order entry, PO matching, and invoicing as administrative cost — necessary, unglamorous, and someone else’s problem. In the ASC model, that work is part of the unit economics of every case.
The volume cuts both ways. The same shift that makes ASCs attractive — high case throughput at modest margins — multiplies the transaction load. More cases means more charge sheets, more POs, more invoices, more reconciliation. If each of those touches a person who reads it, chases what’s missing, and types it into a system, your cost per case scales with your volume instead of falling with it. The Salesforce State of Sales report (cross-industry, not medtech-specific) found reps spending 60% of their time on non-selling work, including 11% on manually entering data (Salesforce, 2026, p. 8). In a high-velocity ASC model, that fraction is not a productivity footnote. It is margin.
This is the part we focused on for a company we work with that sells exclusively into surgery centers. They had already done the hard work on inventory and case workflows. The next lever was the back office — automating the order entry, the PO matching, and the invoicing that the high-velocity model generates. The reps kept sending what they always sent: an email, a photo of the charge sheet, a text. The system read it, extracted the data, matched it, and pushed it into the ERP. The team stopped retyping and started handling only the cases that actually needed a decision. Cost per case came down because the transaction stopped consuming a person.
The honest version of this is not “no humans.” It’s that your team should be spending its time on the cases that need judgment, not on the 80% that follow the same five patterns and could be handled automatically. The work your systems can’t do for themselves is exactly the work that quietly sets your cost per case — and in the ASC, that number is the business.
2. Product strategy is reverse logistics and SKU restraint
Ask anyone in a sterile processing department what they hate most and you’ll get the same answer. A chief commercial officer at a surgical-inventory company told Tegus: “if you walked into any sterile processing department in the world and said, what’s your number one frustration, they would say loaner trays.”
Loaner trays are the physical form of reverse logistics, and reverse logistics is one of the most expensive and least visible costs in the model. Every tray you ship in for a case and ship back out carries cost on both legs: picking, freight, reprocessing, reconciliation, and the shrinkage when something gets lost, damaged, or expires in transit. Peer-reviewed work on consignment in medical supplies notes that practitioner estimates put consignment items at 12–15% more on average, with some estimates north of 25% (Wiley, Consignment Inventory Shrinkage in Medical Supplies, 2023, p. 3). The study’s own finding is sharper still: consignment, the default model in this industry, tends to increase shrinkage and total spend, because nobody has clean visibility into inventory that sits in one place but belongs to someone else.
There are two product-design responses, and they map directly onto what’s working in the ASC.
The first is sterile-packed, ready-to-use kits instead of full instrument trays moving back and forth. This is the “rep-light,” single-use kit model Buford puts near the center of his playbook — fewer things to ship, sterilize, return, and reconcile. It trades a higher per-unit cost for a dramatically lower coordination cost, which is the right trade in a setting where the coordination is the expensive part.
The second is harder, because it cuts against every commercial instinct: fewer SKUs. The reflex is to give every surgeon every option, every size, every variant — to win the account by never being the reason a case can’t proceed. But choice is not free. The same SVP running seven ASCs estimated that simply streamlining the packs his centers order could save “$200,000, $300,000 a year.” He also noted there was about “$1 million of inventory sitting in all these ASCs at any given time.” Every extra variant is more inventory, more storage in a space-constrained center, more to reconcile, and more to write off when it expires on a shelf. McKinsey estimates medtechs can reduce inventory by up to 30% with better management — and points out that medtech companies already hold “as much as three times more inventory than companies in sectors such as consumer packaged goods and electronics” (McKinsey, Medtech Value via Inventory Optimization, 2025, p. 1).
There is a strategic reason this matters beyond cost. The four companies that dominate joint replacement compete on robotic ecosystems that, in ORTHOWORLD’s words, lock “hospitals and surgeons into implants from the same company” — a closed model that “handcuffs hospitals and could stifle innovation” (ORTHOWORLD 2024, p. 47). A startup cannot out-ecosystem a Mako. But it can win the opposite contest. Where the giants bring complexity, navigation systems, and full trays, a focused company can be the simplest, lightest, most predictable thing in the room. SKU restraint isn’t just margin discipline. It’s how a small company turns the incumbents’ complexity into its own differentiator. Buford points to NANISX as the proof case — a spine company built entirely around ASCs from day one, deliberately skipping the hospital-oriented robotics and navigation and optimizing for the outpatient workflow. That’s exactly this play.
3. Pick the channel for the surgeons it already touches
Here is a detail worth sitting with: Stryker’s sports medicine business — not its implants — is part of what’s helping it win ASC deals it would previously have lost. ORTHOWORLD notes that “a strong sports medicine portfolio is helping Stryker win ASC deals that it would have previously lost,” and that those wins matter precisely “as total joint procedures shift to the ASC setting” (ORTHOWORLD 2024, p. 91).
That’s the channel lesson, and most founders run it backwards. They sign whatever distributors are available, then hope the surgeon relationships follow. The faster path runs the other direction: find the distributors who already carry adjacent products and already call on the surgeons you’re targeting.
The logic is concrete, not abstract. A spine implant and a biologic move through the same warehouse, in the same rep’s trunk, to the same surgeon, in the same case. A distributor already in that room doesn’t need to build a new relationship to add your line — they need a reason to. Deal velocity comes from the relationship that already exists, not the one you’re trying to manufacture. In an ASC channel that’s forming in real time — recon companies already moving ~15% of knee volume through ASCs and growing double digits — the reps with the existing surgeon relationships are the ones who decide how fast you get in.
But adjacency comes with a catch that loops straight back to the first two points. The moment you sign a distributor who carries five or ten other lines, you are competing for their attention every single morning. These are independent economic actors, not your employees, and they optimize for their own throughput. The manufacturer they put in the bag is the one that’s easiest to do business with — whose POs process without a follow-up call, whose cases get confirmed in hours, whose commission gets paid without a week of waiting. A clean back office isn’t just internal hygiene. In a 1099-style channel, it’s the thing that earns rep preference and keeps your line moving. The product gets you considered. The operations get you carried.
The buyer in the ASC is the economic owner
One more shift the hospital playbook gets wrong. In a hospital, the clinical buyer and the economic owner are different people, separated by a value-analysis committee. In a surgeon-owned ASC, they are frequently the same person. The surgeon who chooses your implant also owns a piece of the facility’s margin. As the operator put it, surgeons increasingly want their case in an ASC because of “compensation-based RVUs” and their own “investment paycheck in the ASC.”
That collapses the sale. You are no longer making a clinical case to a doctor and a separate financial case to a committee — you are making both to the same person, and the financial case is no longer secondary. Two of Buford’s eight steps point straight here — target surgeon-owned ASCs, and lead with the data on cost savings. The structural reason both work is the same: in a surgeon-owned center, the person choosing your implant also owns a slice of the margin it affects. The BMMG MedTech Commercialization Flagship Report (Feb 2026) found that clinical superiority alone is rarely sufficient to drive adoption, and that decision-makers are increasingly evaluating technologies through a financial lens alongside the clinical one (pp. 7, 12). In the ASC, that’s not a trend — it’s the structure of the room. Lead with the economics: cost per case, OR time, the math on switching. The clinical story earns you the meeting; the financial story closes it.
And one practical consequence of selling into surgeon-owned centers: they don’t run on hospital infrastructure. They run on practice-management and surgical platforms, and most of them don’t support structured EDI any more than a small manufacturer does. The order doesn’t arrive as a clean electronic transaction. It arrives as an email, a PDF, a photo, a text. A go-to-market built on the assumption that data will arrive structured will spend its margin re-creating it by hand. The companies that win here are the ones that can take whatever the center sends and turn it into structured data on the other side — without asking the surgeon or the rep to change how they work.
The thesis underneath all of it
The ASC rewards a specific kind of company: one that has stripped the operational slack out of every layer of how it goes to market. Lean SKUs so there’s less to ship, return, and reconcile. Sterile-packed kits so reverse logistics stops eating margin. A back office that turns the field’s emails and photos into structured data automatically, so cost per case falls as volume rises instead of climbing with it. A channel chosen for the surgeons it already touches, and kept loyal by being the easiest manufacturer to do business with.
None of these are independent decisions. They compound. The same discipline that keeps your SKU count low keeps your inventory visible. The same automation that drops your cost per case is what makes a distributor want to carry you. Built together, from the start, they’re why a focused startup can take share in a market dominated by four companies with vastly more resources — because those four are optimized for the hospital, and the cases are leaving the hospital.
If you’re building for the ASC, the question isn’t whether the volume is coming. It is. The question is whether your company is shaped for the economics of the place it’s going — or for the place it’s leaving.