Surgery Partners, Inc. (SGRY): Business Model Canvas [Dec-2025 Updated]

You're looking to understand the engine driving Surgery Partners, Inc. (SGRY) right now, and frankly, their business model is a masterclass in focused outpatient expansion. As a seasoned analyst, I see a clear strategy: partner with physicians and aggressively shift high-acuity cases, like total joints-which saw a 23% year-to-date growth in 2025-into their network of over 200 Ambulatory Surgery Centers (ASCs). This focus is translating directly to the bottom line, with the company guiding 2025 revenue between $3.275 billion and $3.3 billion, aiming for an Adjusted EBITDA between $535 million and $540 million. Dive into the canvas below to see exactly how they structure these physician partnerships, manage the cost of high-tech equipment, and capture procedure-based reimbursement from payers.

Surgery Partners, Inc. (SGRY) - Canvas Business Model: Key Partnerships

You're looking at the critical relationships that fuel Surgery Partners, Inc.'s (SGRY) growth engine as of late 2025. These aren't just names on a contract; they are the co-owners, referrers, and payers that make the outpatient surgical model work.

The core of the model relies heavily on the physician base. Surgery Partners, Inc. maintains relationships with a substantial number of practicing physicians who are vested in the success of the facilities.

• Over 4,600 affiliated physicians present opportunities for targeted engagement programs.
• The company recruited over 500 new physicians through September 30, 2025.
• New recruits in Q1 2025 generated 14% more revenue per provider compared to the prior year's cohort.

Joint ventures with health systems remain a key strategic lever, especially for higher-acuity services. This is about shared risk and shared reward in local markets. For example, in late 2025, Surgery Partners, Inc. was involved in a minority share acquisition with Duly Health and Care for the Valley ASC.

Reimbursement partnerships define the top-line reality. While Medicare volumes held up in Q3 2025, management noted softer trends in the commercial book of business. The company's exposure to the lower-paying Medicaid and exchange-based plans is kept tight.

The relationship with the major financial partner, Bain Capital, has been central, though the dynamic shifted in 2025. Bain Capital and its affiliates held approximately 39% of the common stock as of January 28, 2025, and proposed an acquisition at $25.75 per share. However, by June 17, 2025, the Special Committee concluded discussions, determining that Surgery Partners, Inc.'s prospects as an independent public company exceeded the proposal's value, though Bain Capital remains a long-term investor.

Suppliers are critical, particularly for scaling specialized procedures. The investment in advanced technology, like surgical robotics, is a clear indicator of partnership focus. Here's a snapshot of the key quantitative partnership elements as of late 2025:

The company's focus on high-acuity specialties like orthopedics is directly supported by these equipment partnerships; for instance, total joint procedures jumped 22% year-over-year in Q1 2025. To be fair, the global surgical robotics market was projected to surpass 2,100 units by 2025, showing the broader industry trend Surgery Partners, Inc. is buying into.

Surgery Partners, Inc. (SGRY) - Canvas Business Model: Key Activities

You're looking at the core engine driving Surgery Partners, Inc.'s growth as of late 2025. These are the essential things the company must do well to execute its strategy.

Operating and managing a network of over 200 surgical facilities

Surgery Partners, Inc. operates a differentiated outpatient delivery model across the country. As of the third quarter ended September 30, 2025, the company reported a total of 165 surgical facilities across 30 states. This network includes ambulatory surgery centers and surgical hospitals. The total number of affiliated physicians supporting this network stands at +5,800, with over 15,000 employees. Annually, this platform supports over 600,000 procedures.

Recruiting and integrating over 500 new physicians in 2025

Attracting physician partners is a central activity, especially those focused on higher-acuity procedures. Through September 30, 2025, Surgery Partners, Inc. recruited over 500 new physicians to its facilities. This effort included adding 150 physicians in the first quarter alone. The company added nearly 300 new physicians through the first half of 2025. New recruits from the first quarter generated 14% more revenue per provider compared to the 2024 cohort.

• Physicians expected to eventually become partners: Many.
• Focus of new recruits: Orthopedics.
• Recruits' impact: Expected to have a meaningful impact in 2025 and beyond.

Executing accretive acquisitions and de novo facility development

Growth is driven by both buying existing facilities and building new ones from scratch. Year-to-date through Q3 2025, the company deployed $71 million in capital for acquisitions. In the second quarter of 2025, eight surgical facilities were added for a deployment of $66 million. These acquisitions were executed at an effective multiple of under 8x adjusted EBITDA. Surgery Partners, Inc. also strategically divested interests in three ASCs for $50 million during the first half of the year. On the de novo front, the company had 10 new facilities under construction as of the Q2/Q1 2025 reporting periods.

Maximizing portfolio performance and driving operating efficiencies

The focus here is on organic growth and margin improvement across the existing asset base. Same-facility revenue growth for the year-to-date 2025 period was 5.4%, which is within the company's long-term growth algorithm target of 4% to 6%. This was supported by same-facility case growth of 4.3% year-to-date. The third quarter saw same-facility revenue growth hit 6.3%. Adjusted EBITDA margin for the third quarter was 16.6%, essentially flat to the prior year, while the year-to-date margin stood at 15.2%. The company ended Q3 2025 with $203.4 million in cash and over $600 million in total available liquidity. The total net debt-to-EBITDA ratio was 4.1 times, with a long-term target of 3 times or less.

Performing high-acuity surgical procedures, especially total joint replacements

Shifting the case mix toward higher-acuity procedures, particularly orthopedics, is a key driver of revenue per case expansion. Total joint surgeries in their ambulatory surgery centers (ASCs) grew 16% in the third quarter of 2025 and 23% on a year-to-date basis. In the first quarter of 2025, orthopedic cases totaled more than 29,000, a 3.4% increase, with total joint replacements jumping 22% year-over-year. To support this, Surgery Partners, Inc. invested in 74 surgical robots as of Q3 2025. Almost half of all centers perform total joint replacements, and 80% of facilities can handle higher-acuity orthopedic cases.

• Total Joint Procedure Growth (YTD 2025): 23%.
• Surgical Robots Deployed (Q3 2025): 74.
• Orthopedic Cases (Q1 2025): >29,000.

Surgery Partners, Inc. (SGRY) - Canvas Business Model: Key Resources

You're looking at the core assets Surgery Partners, Inc. (SGRY) relies on to execute its outpatient surgery strategy. These aren't just buildings; they are the integrated platform that drives their value proposition.

The physical footprint and physician alignment form the bedrock of Surgery Partners, Inc.'s scale. As of late 2025, the network size and physician base are quantified as follows:

The proprietary operating model is evidenced by consistent organic growth metrics, showing the efficiency of their platform. For instance, same-facility case growth in the third quarter of 2025 reached 3.4%. Furthermore, high-acuity procedures are accelerating, with total joint surgeries growing 23% year-to-date 2025. Cost control is also a key resource, with supply costs at 25.4% of net revenue for Q3 2025, representing a reduction of 70 basis points from the prior year.

Surgery Partners, Inc. actively invests in technology to support clinical quality and expand service offerings. This includes specialized equipment like surgical robotics. Through the third quarter of 2025, the company had invested in 74 surgical robots.

The human capital supporting this network is substantial. As of October 2025, Surgery Partners, Inc. has approximately 10,000 employees across its operations.

Financial strength provides the flexibility to maintain and grow these resources. As of September 30, 2025, Surgery Partners, Inc. reported cash and cash equivalents of $203.4 million and had $405.9 million of borrowing capacity under its revolving credit facility, resulting in total available liquidity of over $600 million.

• Cash and Cash Equivalents (as of September 30, 2025): $203.4 million
• Revolving Credit Facility Borrowing Capacity (as of September 30, 2025): $405.9 million
• Total Available Liquidity (as of September 30, 2025): Over $600 million
• Total Net Debt to EBITDA Ratio (under credit agreement, end of Q3 2025): 4.2x

Surgery Partners, Inc. (SGRY) - Canvas Business Model: Value Propositions

You're looking at the core reasons why Surgery Partners, Inc. (SGRY) attracts both physicians and payers in late 2025. The value they offer centers on shifting complex care to a more efficient, lower-cost environment, which is a big deal for the economics of healthcare delivery.

High-quality, cost-effective surgical care in an outpatient setting

Surgery Partners, Inc. positions itself as a provider of high-quality, cost-effective solutions outside of the traditional, more expensive acute care hospital. This focus on the ambulatory surgery center (ASC) model is central to their value. For instance, in the third quarter of 2025, their Adjusted EBITDA margin reached 16.6%, showing operational leverage in this outpatient setting. The company reaffirmed its full-year 2025 revenue guidance to be between $3.275 billion and $3.30 billion, with Adjusted EBITDA guided between $535 million and $540 million. Their overall exposure to lower-reimbursing Medicaid and exchange-based plans is kept under 5%, suggesting a focus on commercially favorable payer mixes that value their efficiency.

Physician co-ownership model for alignment and control

The structure itself is a value driver, ensuring physician alignment. Surgery Partners, Inc. operates through partnerships or limited liability companies with physicians, which is key to their model. This alignment is supported by active recruitment; they added nearly 150 new physicians in the first quarter of 2025 alone. To show the immediate impact of this partnership, new recruits in that first quarter generated 14% more revenue per provider compared to the cohort from the previous year. By the end of the third quarter of 2025, they had recruited over 500 new physicians year-to-date. As of December 31, 2024, the company held majority ownership in 83 of its 161 surgical facilities, while still partnering with physicians.

Focus on high-acuity procedures like total joints (growth of 23% YTD 2025)

The ability to handle more complex cases in the ASC setting is a major differentiator. Total joint procedures, a high-acuity service line, showed robust growth, increasing by 23% on a year-to-date basis through the third quarter of 2025. This focus is supported by technology and infrastructure investment. By the third quarter of 2025, Surgery Partners, Inc. had invested in 74 surgical robots to support these complex procedures. Furthermore, about 80% of their facilities are equipped to handle these higher-acuity orthopedic procedures.

Convenience and short-stay surgical solutions for patients

As a leading short-stay surgical facility owner and operator, convenience for the patient is inherent in the model. This is reflected in their case volume growth. For example, same-facility cases increased by 6.5% in the first quarter of 2025 year-over-year. The company is clearly executing on its strategy to capture market share through this model, as evidenced by the overall surgical case growth.

Value-based care opportunities for health plans and payers

For payers, the value proposition is rooted in cost reduction compared to acute care settings, which the company actively seeks to formalize through partnerships. They focus on reducing waste and costs to help health plans deliver superior value. This strategic positioning is supported by their operational scale and efficiency metrics. Here's a quick look at some of the key 2025 performance indicators that back up their value claims:

The shift to higher-acuity services, while driving growth, is managed carefully to maintain the cost advantage that payers seek. The company's ability to grow revenue while maintaining a disciplined leverage ratio of approximately 4.1x total net debt to EBITDA at the end of the second quarter of 2025 shows they are balancing growth investment with financial prudence.

The value proposition is reinforced by their commitment to expanding their high-acuity footprint:

• Nearly half of all ambulatory surgery centers (ASCs) now perform total joint surgeries.
• 80% of facilities are equipped for higher-acuity orthopedic procedures.
• 74 surgical robots were invested in by the third quarter of 2025.

Finance: review Q4 2025 payer mix trends against the 5% Medicaid/exchange exposure target by next Tuesday.

Surgery Partners, Inc. (SGRY) - Canvas Business Model: Customer Relationships

You're looking at how Surgery Partners, Inc. (SGRY) manages its most critical relationships, which are fundamentally built around the physicians who drive the surgical volume. This isn't a simple transactional setup; it's a high-touch, partnership-driven approach that underpins their entire outpatient delivery model.

The core of their relationship strategy is the co-management and partnership model with physicians. This structure is designed to align incentives, ensuring that the surgeons who bring the cases are also invested partners in the facility's success. This deep integration is key to their value proposition of providing high-quality, cost-effective care.

To illustrate the scale and focus of these physician relationships as of late 2025, here are some key operational metrics:

This partnership model is supported by dedicated physician recruitment and retention programs. Surgery Partners, Inc. actively invests in tools and incentives to bring in and keep top talent. For example, in the first quarter of 2025, they added nearly 150 new physicians, and the revenue generated per provider in that new cohort was 14% higher than the prior year's recruits. The focus is clearly on attracting surgeons capable of handling higher acuity work, which often commands better reimbursement and aligns with the shift in surgical trends.

The relationship extends to the financial side through contractual relationships with health plans and payers. Surgery Partners, Inc. actively seeks strategic relationships with payors to promote more affordable healthcare for their members. While they are focused on growing their high-acuity, higher-reimbursement orthopedic and GI mix, they maintain a relatively low exposure to certain government-backed plans; their exposure to Medicaid and exchange-based plans was reported as under 5% as of early 2025. The overall health plan relationship is critical, as evidenced by the Q3 2025 same-facility revenue growth of 6.3%, which was driven by a 2.8% increase in revenue per case.

The third pillar of customer relationship management is ensuring a standardized, high-quality patient care experience across their network. This consistency is what makes the platform attractive to both referring physicians and contracting payers. The company's growth in total joint surgeries at their Ambulatory Surgery Centers (ASCs) is a testament to this quality focus, with cases growing 16% in the third quarter of 2025. They manage this quality through operational excellence and technology deployment, such as having 80% of their ASCs equipped for higher-acuity orthopedic procedures.

You can see the direct result of these relationship efforts in their organic growth metrics:

• Same-facility revenue growth was 5.2% in Q1 2025.
• Same-facility case growth was 6.5% in Q1 2025.
• Same-facility case growth was 3.4% in Q3 2025.

Finance: draft 13-week cash view by Friday.

Surgery Partners, Inc. (SGRY) - Canvas Business Model: Channels

You're looking at how Surgery Partners, Inc. gets its services to the market as of late 2025. It's a mix of physical footprint, physician relationships, and payer negotiations.

The core channel is the physical network of facilities. As of the third quarter ended September 30, 2025, Surgery Partners, Inc. operated a portfolio of 161 surgical facilities across 31 states. This network breaks down into specific facility types, which is key to understanding their reach.

The physician network is a critical, though less tangible, channel. This is driven by bringing in new physician partners who then drive patient volume. Through September 30, 2025, Surgery Partners, Inc. recruited over 500 new physicians, many of whom are anticipated to become partners.

Contracting with payers is the revenue channel. While specific payer mix percentages aren't public for this section, the scale of operations supports direct contracting. The company's year-to-date 2025 revenue reached $2,423.7 million as of September 30, 2025, showing the scale of their contracted services.

Growth in the channel is achieved through both building new sites and buying existing ones. Here's a look at the capital deployment and transaction activity reported for 2025:

• Year-to-date 2025 capital deployed for acquisitions: $71 million.
• Year-to-date 2025 divestiture proceeds from three ASCs: $50 million.
• Near/midterm M&A pipeline under active evaluation: well over $300 million in opportunities.
• Q1 2025 acquisition activity: Added 5 surgical facilities.
• Q1 2025 acquisition multiple: Under 8x adjusted EBITDA.

The full-year 2025 revenue guidance was revised to a range of $3.275 billion to $3.30 billion, reflecting the ongoing channel management and deployment cadence.

Surgery Partners, Inc. (SGRY) - Canvas Business Model: Customer Segments

You're analyzing the core customer base for Surgery Partners, Inc. as of late 2025. Honestly, their business model is built around a few distinct, yet interconnected, groups that drive volume and revenue through their outpatient surgical facilities.

The primary volume generators are the Patients requiring short-stay surgical procedures. These are individuals seeking high-quality, cost-effective care in Ambulatory Surgery Centers (ASCs) and surgical hospitals, moving away from more expensive inpatient settings. The focus here is clearly on high-growth specialties. For instance, in the third quarter of 2025, total joint surgeries in their ASC facilities grew a strong 16% for the quarter, and were up 23% year-to-date. Overall surgical cases across consolidated facilities in Q3 2025 were over 166,000, representing a 2.1% increase year-over-year.

Next, you have the Physician groups seeking facility ownership and operational support. This is the partnership engine. Surgery Partners, Inc. attracts and retains these groups by offering operational expertise and a stake in the facility. This relationship is financially significant; in the third quarter of 2025 alone, the company distributed $52.5 million to its physician partners. Furthermore, the company is actively growing this base, having recruited over 500 new physicians through September 30, 2025, many of whom are anticipated to become partners.

The third segment involves the entities paying for the care: Commercial health plans and government payers (Medicare/Medicaid). This mix is a near-term focus area, as management noted softer-than-expected commercial volume and payer mix trends entering the fourth quarter. As of Q3 2025, the commercial payer mix accounted for 50.6% of revenues, which was a decrease of 160 basis points year-over-year, while governmental sources increased their share by 120 basis points. This shift is a key factor management cited when revising guidance.

Finally, there are the Health systems looking to shift cases to lower-cost settings. Surgery Partners, Inc. positions its ASCs as the ideal venue for shifting higher-acuity cases that benefit from the outpatient model. The company is strategically focused on expanding in these high-acuity areas, evidenced by the robust growth in orthopedic procedures. The overall operational footprint supports this, with the company operating over 200 locations across 30 states as of late 2024, with a focus on de novo facilities primarily in orthopedic-focused and higher-acuity ASCs.

Here's a quick look at the scale of the business driving these segments as of the Q3 2025 report:

The strategy involves attracting physicians with partnership equity and operational excellence, which in turn draws in patients for high-growth procedures, all while managing the reimbursement dynamics dictated by the payer segment. The company is also actively managing its portfolio, having completed the divestiture of interests in three ASCs for about $50 million year-to-date 2025, using that capital to fund acquisitions or reduce leverage.

You should keep an eye on the M&A pipeline, which remains robust with well over $300 million in opportunities under active evaluation, as this directly feeds the growth from the physician segment.

Finance: draft 13-week cash view by Friday.

Surgery Partners, Inc. (SGRY) - Canvas Business Model: Cost Structure

You're looking at the core expenses that drive Surgery Partners, Inc.'s operations, which is key to understanding their margin profile. The cost structure is heavily weighted toward the direct costs of running surgical centers.

High variable cost of revenues is a defining feature. For the full year 2024, the Cost of Revenue hit $2,368.7 million. This figure directly scales with the volume of procedures performed, covering supplies and direct clinical labor.

Clinical and administrative staffing represents a significant labor cost. While specific labor-only figures aren't broken out separately from all operating expenses, the Sales, General and Administrative expenses for the full year 2024 were $118,700 thousand, or $118.7 million. You should note that operating expenses, including salaries and benefits, increased in 2024, contributing to the net loss that year.

The company carries substantial debt, which translates directly into high fixed financing costs. As of the end of the third quarter of 2025, Surgery Partners, Inc.'s ratio of total net debt to EBITDA, as calculated under the credit agreement, was approximately 4.2x. The full year 2024 Interest Expense, net, was reported as $201.7 million.

Here's a quick look at the debt and interest expense context:

Growth requires capital, leading to capital expenditures for new facilities (de novo) and equipment. In 2024, Surgery Partners, Inc. opened eight de novo facilities. Furthermore, the company deployed nearly $400 million on accretive acquisitions during 2024, with cash consideration for acquiring a controlling interest in eight surgical facilities and several physician practices totaling $378.8 million for the year.

Finally, the pursuit of scale brings costs associated with M&A and integration activities. These are non-recurring but significant drains on short-term cash flow. You can see the impact:

• Transaction and integration costs for the full year 2024 were $100.1 million.
• For the six months ended June 30, 2025, M&A costs totaled $30.9 million.
• For the six months ended June 30, 2024, M&A costs were $16.2 million.

Cash flows from operating activities in Q2 2025 were slightly lower than Q2 2024, partly due to an increase in cash interest payments.

Surgery Partners, Inc. (SGRY) - Canvas Business Model: Revenue Streams

The revenue streams for Surgery Partners, Inc. are fundamentally tied to the volume and complexity of surgical procedures performed across its network of ambulatory surgery centers (ASCs) and surgical hospitals. The core of the income generation is procedure-based reimbursement, which comes from both commercial payers and government programs like Medicare and Medicaid. You see this dependency reflected in the payer mix, which, based on recent filings, shows private insurance accounting for approximately 53.5% of revenue, while government payers account for about 41.1%.

The company generates revenue through two primary components for each surgical case. The first is the facility fee, which covers the charges for utilizing the operating room, recovery areas, necessary equipment, and nursing staff. The second component involves professional service fees, which are billed separately by the physician partners for their services. The overall financial outlook for the year reflects the current operational performance and capital deployment timing.

For the full-year 2025, Surgery Partners, Inc. has provided a revised revenue guidance in the range of $3.275 billion to $3.3 billion. This is coupled with a revised Adjusted EBITDA guidance for 2025 set between $535 million to $540 million.

A key driver for revenue quality is the strategic shift toward higher-acuity specialties, which generally command better reimbursement rates, helping to offset any rate pressure from lower-acuity cases like GI procedures. This focus supports revenue per case growth. For instance, year-to-date 2025, same-facility revenue per case growth was reported at 1.1%, though the third quarter alone saw same-facility revenue per case increase by 2.8%.

The success in shifting case mix is evident in the volume growth of these complex procedures. Here's a look at the performance in higher-acuity areas:

• Total joint procedures grew 22% year-to-date in Q1 2025.
• Total joint surgeries grew 16% in the third quarter of 2025.
• Orthopedic case volume grew 3.4% in Q1 2025.
• Approximately 80% of Surgery Partners, Inc.'s facilities are equipped for higher-acuity orthopedic procedures.

To put the key financial targets and performance indicators side-by-side, here is a quick summary of the latest guidance and recent performance metrics:

The reimbursement structure is also influenced by the site of service, as Surgery Partners, Inc. receives payment from Medicare based on three different systems depending on whether the service is outpatient (generally in ASCs), hospital outpatient, or hospital inpatient. The company's exposure to Medicare is noted as limited, at roughly 5% of total revenue.