SAN FRANCISCO—Ascension’s $3.9 billion deal to acquire AmSurg and its 34-state footprint is a doorway for the massive nonprofit system to enter 25 additional markets and strike new partnerships with independent physicians and other health systems, President and CEO Eduardo Conrado said this week at the 2026 J.P. Morgan Healthcare Conference.
The newly minted top executive, speaking in a presentation to attendees and in a subsequent interview with Fierce Healthcare, affirmed that the portion of AmSurg’s 250-plus managed ambulatory surgery centers (ASCs) already in Ascension’s 10 existing markets will help the system build out its networks.
This will allow Ascension to capture and serve more patients, shift low-acuity cases out of the hospital to sites that are lower cost and often preferred by patients, and increase case mix index among hospitals where the company is spending big to update its clinical programs and equipment, he said. Ascension’s plans to build new wholly owned ASCs on its home turf also provide an opportunity to better serve the likely influx of uninsured patients on the horizon, he added.
But, in the 25 new markets, Conrado said Ascension doesn’t plan on standing up or acquiring acute care hospitals—in fact, the system has spent much of the past two years working to trim down its acute presence outside of its core regions.
Rather, the CEO expects to use these sites to make inroads with independent physicians. And, as a nonprofit organization, he expects that Ascension will be an appealing partner for local health systems to become their ASC of choice.
The result: a more diversified portfolio and clear growth trajectory for what will be the country’s seventh largest health system by hospital footprint (95 wholly owned, plus 26 joint ventures) and its third-largest ASC platform (more than 300 after the acquisition closes).
“The ambulatory space has a 10%-plus CAGR going forward, and then our acute side, [for] the markets that we’re in, 3%,” Conrado told Fierce Healthcare. “We’re still going to be big on the acute side, and now we’ve got some tailwind for growth. If you have a tight operation and then a portfolio that enables growth, we’re in a good spot. You’ve got a crazy curveball coming our way—we should be able to handle it.”
Ascension signed its definitive agreement with AmSurg last summer. The transaction is expected to close this quarter, though executives kept mum on when the deal could cross the finish line.
Strategic roadmapping aside, much of the $25 billion nonprofit’s presentation this week was a celebration of its operating turnaround, which executives noted came in the wake of massive cyberattack disruptions.
From the 2024 to 2025 fiscal years, Ascension tallied a $1.3 billion year-over-year operating margin improvement and boosted its recurring operating EBITDA from a $62 million loss to an $837 million gain. Volume, acuity and commercial mix metrics all saw marked improvements from the prior year and were accompanied by a 5.4% drop in length of stay plus a 44% decline in contract, premium and overtime labor.
More broadly, horizontal business groups like ASCs and specialty pharmacy continued to boost earnings from $276 million EBITDA in fiscal 2022 to $466 million in fiscal 2025. And, as Ascension worked to reconfigure its portfolio, 11 completed transactions from the past fiscal year collectively fueled more than $575 million in operating income, and $500 million of capital spend and helped de-leverage the balance sheet by about $1 billion.
Ascension is now targeting an operating income margin of 0.5% for the current fiscal year, a roughly 2% margin for fiscal 2027 and about 3% margin for fiscal 2028 with its current operations. Adding its planned merger and acquisition activity into the mix is expected to boost the lattermost year to a 4% margin, or roughly $1.1 billion to $1.2 billion of operating income.