Duly Health and Care's Strategic Expansion into Ambulatory Surgery: A Catalyst for Long-Term Value Creation in Surgical Services

The healthcare landscape is undergoing a transformative shift, with ambulatory surgery centers (ASCs) emerging as a cornerstone of cost-effective, high-quality surgical care. Duly Health and Care, a physician-led health system, has positioned itself at the forefront of this evolution through a strategic, multi-pronged approach to expanding its ASC network. By leveraging partnerships, acquisitions, and technological innovation, Duly is not only addressing unmet patient needs but also capitalizing on a sector poised for robust financial growth. This analysis evaluates how Duly's initiatives align with broader industry trends and what this means for long-term value creation in surgical services.

Strategic Partnerships and Acquisitions: Building a Scalable ASC Network

Duly's recent collaboration with Surgery Partners, a national leader in surgical facility operations, underscores its commitment to scaling its outpatient surgical footprint. The partnership, announced by Duly Health and Care, includes the expansion of Duly Surgery Center Westmont, which received Certificate of Need (CON) approval to add two operating rooms and six PACU bays, enhancing capacity for orthopedic, spine, and other high-demand procedures. This expansion, slated for 2026, is part of a broader strategy to integrate Surgery Partners' operational expertise with Duly's physician-led model, ensuring efficiency and quality.

Complementing this, Duly's acquisition of a minority stake in Valley Ambulatory Surgery Center (Valley ASC) in St. Charles, Illinois, further solidifies its presence in the Chicagoland area, according to a Morningstar report. Such strategic acquisitions allow Duly to diversify its geographic reach while maintaining alignment with Surgery Partners' operational standards. These moves reflect a calculated effort to balance growth with financial prudence, a critical factor in an industry where capital efficiency is paramount.

Financial Performance and Market Trends: A Sector on the Rise

According to a HealthLeaders analysis, ASCs generated $45 billion in revenue in 2024, with projections to reach $57 billion by 2030-a 5.3% compound annual growth rate (CAGR). This growth is driven by favorable reimbursement policies, technological advancements enabling complex outpatient procedures, and demographic shifts such as an aging population.

Duly's entry into this sector aligns with these tailwinds. For instance, the Centers for Medicare & Medicaid Services (CMS) has expanded the list of procedures eligible for ASC settings, directly boosting margin potential for providers. Additionally, private equity investment in ASCs rebounded in 2024, with $19.7 billion in funding, signaling strong confidence in the sector's profitability. Duly's focus on high-margin, high-volume specialties like orthopedics and musculoskeletal care positions it to capture a significant share of this growth.

Long-Term Value Creation: Beyond Immediate Financials

Duly's strategy extends beyond short-term revenue gains. By prioritizing patient-centered care models and cost-effective delivery, the company is addressing systemic inefficiencies in surgical services. For example, Duly's Lombard ASC, one of Illinois' largest multi-specialty centers, serves over 20,000 patients annually, demonstrating the scalability of its model. Meanwhile, the Westmont facility's specialization in musculoskeletal care highlights a focus on high-need, high-growth areas.

Moreover, Duly's integration of AI-driven tools-such as Switchboard Health's predictive analytics for referral management, as described in a Morningstar report-enhances care coordination and operational efficiency. While the company's recent technology investments are not explicitly detailed, the broader sector's adoption of AI and data analytics suggests a trajectory toward value-based care, which is critical for long-term sustainability.

Conclusion: A Strategic Bet on the Future of Surgical Care

Duly Health and Care's strategic entry into ambulatory surgery is a masterclass in aligning operational excellence with market dynamics. By expanding its ASC network through partnerships, acquisitions, and technology, Duly is not only improving access to care but also positioning itself to capitalize on a sector with strong financial fundamentals. As ASCs continue to reshape the surgical landscape, Duly's physician-led, value-driven approach offers a compelling blueprint for long-term value creation. Investors seeking exposure to the next phase of healthcare innovation would do well to monitor Duly's progress-and the broader ASC sector's evolution.