<PAGE>   1





================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                       -----------------------------------

                                    FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
    OF 1934
    FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
                                       OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                         COMMISSION FILE NUMBER 0-27162
                       -----------------------------------
                         NATIONAL SURGERY CENTERS, INC.
             (Exact name of Registrant as specified in its charter)

           DELAWARE                                            36-3549627
 (State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                          Identification Number)


           30 SOUTH WACKER DRIVE, SUITE 2302, CHICAGO, ILLINOIS 60606
               (Address of Principal Executive Offices)      (Zip Code)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (312) 655-1400
                       -----------------------------------

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                               TITLE OF EACH CLASS
                     COMMON STOCK, PAR VALUE $.01 PER SHARE
                NON-VOTING COMMON STOCK, PAR VALUE $.01 PER SHARE
                       -----------------------------------

     Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes       No   X 
                                              -----    -----

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [  ]

     THE AGGREGATE MARKET VALUE OF THE VOTING STOCK OF THE REGISTRANT HELD BY
STOCKHOLDERS WHO WERE NOT AFFILIATES (AS DEFINED BY REGULATIONS OF THE
SECURITIES AND EXCHANGE COMMISSION) OF THE REGISTRANT WAS APPROXIMATELY
$327,912,406 AT MARCH 13, 1997 (BASED ON THE CLOSING SALE PRICE ON THE NASDAQ
NATIONAL MARKET ON MARCH 13, 1997, AS REPORTED BY THE WALL STREET JOURNAL
(MIDWEST EDITION)). AT MARCH 13, 1997, THE REGISTRANT HAD ISSUED AND OUTSTANDING
AN AGGREGATE OF 11,952,563 SHARES OF COMMON STOCK.

                       DOCUMENTS INCORPORATED BY REFERENCE

     THOSE SECTIONS OR PORTIONS OF THE REGISTRANT'S ANNUAL REPORT TO
SHAREHOLDERS FOR THE FISCAL YEAR ENDED 1996, DESCRIBED IN PART II HEREOF, ARE
INCORPORATED BY REFERENCE IN THIS REPORT.

     THOSE SECTIONS OR PORTIONS OF THE REGISTRANT'S PROXY STATEMENT FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 21, 1997, DESCRIBED IN PART III
HEREOF, ARE INCORPORATED BY REFERENCE IN THIS REPORT. 
             
================================================================================


<PAGE>   2



                                     PART I

ITEM 1. BUSINESS

     The Company was incorporated in 1987 in the State of Illinois and was
reincorporated in the State of Delaware in 1995. The Company owns, manages and
operates ambulatory surgery centers. The Company also pursues opportunities to
develop new facilities with hospitals and physician groups.

     The Company owns and operates freestanding ambulatory surgery centers that
provide the medical and administrative support necessary for physicians to
perform non-emergency surgical procedures. The Company operates a network of 32
surgery centers in twelve states and is developing new surgery centers. The
Company provides alternate-site settings for high-quality surgical care that is
more cost effective than hospital-based surgical care and that is increasingly
preferred by physicians, payors and patients.

     The Company believes that many physicians prefer the efficiencies of
freestanding ambulatory surgery centers because they enhance physicians'
productivity by providing them with greater scheduling flexibility, more
consistent nurse staffing and faster turnaround time between cases, allowing
physicians to perform more surgeries in a defined period of time. In addition,
new technology and advances in anesthesia and the addition of overnight recovery
have significantly expanded the number and types of surgical procedures that are
being performed in ambulatory surgery centers.

     The Company's objective is to establish a nationwide organization of
freestanding ambulatory surgery centers in secondary and other selected markets
by acquiring established centers and developing new centers. The Company seeks
to provide a broad range of high-quality surgical services and to collaborate
with other participants in local health care delivery systems. The key
components of the Company's strategy are as follows:

-    Acquire established ambulatory surgery centers that are seeking affiliation
     with an experienced operator having access to capital and other resources;

-    Focus on secondary and other selected markets where the Company can
     establish a significant local presence or play an important role in the
     development of local integrated delivery systems;

-    Develop new ambulatory surgery centers in markets where attractive
     acquisitions are not available or where the opportunity exists to increase
     the Company's presence in its existing markets;

-    Develop joint ventures with hospitals and other providers to increase
     patient flow through joint marketing, access to managed care contracts and
     participation in a broader network of health care providers; and



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-    Expand the range of services offered to physicians and payors by offering
     state-of-the-art technology, administrative conveniences, flexible pricing
     alternatives and cost-effective care.

THE INDUSTRY

     The Company believes that overall health care expenditures will continue to
increase with the aging of the population and the extension of health care
coverage to previously uninsured groups. In recent years, government programs,
private insurance companies, managed care organizations and self-insured
employers have implemented various cost-containment measures to limit the growth
of health care expenditures. These cost-containment measures, together with
technological advances, have resulted in a significant shift in the delivery of
health care services away from traditional inpatient hospitals to more
cost-effective alternate sites, including ambulatory surgery centers.

     Industry sources estimate that in 1994 outpatient surgical procedures
represented approximately 64.7% of all surgical procedures performed in the
United States, compared with 31.3% in 1984, and that surgical procedures
performed in freestanding ambulatory surgery centers comprised 19.0% of total
outpatient surgery, compared with 7.9% in 1984. As of May 1996, there were
approximately 2,340 surgery centers in the U.S., of which approximately 130 were
owned by hospitals and approximately 510 were owned by corporate chains. The
remaining approximately 1,700 centers were independently owned, primarily by
physicians.

     Managed care organizations with significant numbers of covered lives are
seeking to direct large numbers of patients to high-quality, low-cost providers
and provider groups. In order to compete for the growing number of managed care
patients, hospitals, physicians and other providers, including alternate site
outpatient providers, are forming integrated delivery systems or provider joint
ventures. The Company believes that there will be opportunities for
well-positioned ambulatory surgery centers to participate in the development of
these delivery systems and joint ventures.

     The Company believes that the following factors contribute to the growth of
ambulatory surgery:

     Cost-Effective Alternative. Ambulatory surgery is generally less expensive
than hospital inpatient surgery. In addition, the Company believes that surgery
performed at a freestanding ambulatory surgery center is generally less
expensive than hospital-based ambulatory surgery for a number of reasons,
including lower facility development costs, more efficient staffing and space
utilization and a specialized operating environment focused on cost containment.

     Managed Care. The Company believes managed care enrollment will continue to
increase and that managed care organizations will seek high-quality,
cost-effective health care services for their enrollees. As a result, the
Company believes that interest in ambulatory surgery will grow as capitation and
other reimbursement arrangements shift the risk for health care costs from
traditional payors to providers such as hospitals and physician groups.
"Capitation" is a reimbursement arrangement in which a health care provider
receives a fixed payment per member per month for the provision of defined
health care services to members of a managed care plan.



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<PAGE>   4



     Physician and Patient Preference. The Company believes that many physicians
prefer freestanding ambulatory surgery centers. The Company believes that such
centers enhance physicians' productivity by providing them with greater
scheduling flexibility, more consistent nurse staffing and faster turnaround
time between cases, allowing physicians to perform more surgeries in a defined
period of time. In contrast, hospitals generally serve a broader group of
physicians, including those involved with emergency procedures that must be
given priority over scheduled non-emergency procedures, resulting in postponed
or delayed surgeries. Additionally, many physicians choose to perform surgery in
an ambulatory surgery center because their patients prefer the simplified
admissions and discharge procedures and the less institutional atmosphere.

     New Technology. New technology and advances in anesthesia, which have been
increasingly accepted by physicians, have significantly expanded the types of
surgical procedures that are being performed in ambulatory surgery centers.
Lasers, enhanced endoscopic techniques and fiber optics have reduced the trauma
and recovery time of many surgical procedures. Improved anesthesia has shortened
recovery time by minimizing post-operative side effects such as nausea and
drowsiness, thereby avoiding, in some cases, overnight hospitalization.

     Extended Recovery. In recent years, some states have permitted extended
recovery in ambulatory surgery centers. While states typically restrict the time
period a patient may remain in an ambulatory surgery center after surgery, a
number of states, including seven states in which the Company operates, allow
extended recovery stays of up to 24 hours. Longer recovery stays are being
considered in some states. Extended recovery significantly increases the types
of procedures that can be performed in ambulatory surgery centers.

GROWTH STRATEGY

     The Company's objective is to establish a nationwide network of ambulatory
surgery centers in secondary and other selected markets by acquiring established
centers and developing new centers. The Company seeks to provide a broad range
of high-quality surgical services and to collaborate with other participants in
the health care delivery system. The key components of the Company's strategy
are as follows:

     Focus on Secondary and Other Selected Markets. The Company plans to focus
on those markets where, either directly or through affiliation with physicians,
payors or hospitals, it can establish a significant local presence or play an
important role in the development of local integrated delivery systems. The
Company generally views secondary markets as those metropolitan areas with fewer
than 250,000 residents and one or two hospitals. The Company believes that in
secondary markets its centers can more easily achieve the scale that allows them
to become a significant local health care provider and a more attractive partner
in such delivery systems.

     Acquire Established Ambulatory Surgery Centers. The Company plans to
continue acquiring established ambulatory surgery centers. The ambulatory
surgery center industry is highly fragmented and is consolidating due to the
increasing complexity of the regulatory and business aspects of health care, the
growing influence of managed care, the rising cost of technology and the need
for capital.


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<PAGE>   5



In addition, physician operators of surgery centers are experiencing increasing
practice demands. The Company believes that a significant opportunity exists to
acquire ambulatory surgery centers that are seeking affiliation with experienced
operators having access to capital and other resources. The Company's goal is to
acquire four to six additional ambulatory surgery centers by the end of 1997.
See "Acquisition and Development Programs."

     Develop New Ambulatory Surgery Centers. The Company plans to develop new
ambulatory surgery centers in selected markets. The Company pursues new center
development in markets where attractive acquisitions are not available or where
the opportunity exists to increase the Company's presence in its existing
markets. In the future, the Company's new center development efforts will
generally be undertaken in partnership with physicians, hospitals and other
local health care participants, including, where the opportunity presents
itself, acquisitions of centers that are currently under development. The
Company believes that such partnerships or acquisitions minimize the time
required to become an established provider. The Company's goal is to develop one
to two additional ambulatory surgery centers by the end of 1997.

     Develop Joint Ventures with Hospitals, Physicians and Other Providers. The
Company has established four joint ventures, established limited or general
partnerships in 29 of its network of 32 centers, and is exploring additional
alliances in selected markets. The Company believes that such affiliations
increase patient flow through joint marketing, access to managed care contracts
and participation in a broader network of health care providers. As part of its
joint venture strategy, the Company intends to manage the surgery centers in
which it and other health care providers have an equity interest. See
"Acquisition and Development Programs."

     Expand Range of Services. The Company plans to continue to increase the
number and types of surgeries performed at its centers. The Company is committed
to adding programs and services for physicians and payors by providing
state-of-the-art technology, administrative conveniences, flexible pricing
alternatives and cost-effective care. The Company is also committed to offering
extended recovery services wherever possible, enabling its centers to
accommodate a wider range of higher-acuity procedures.

ACQUISITION AND DEVELOPMENT PROGRAMS

Acquisition Program
     The Company typically targets for acquisition ambulatory surgery centers
that meet certain criteria, including market demographics, size, profitability,
specialty mix, prominence within the local medical community, access to payors
and opportunities for growth. The Company principally targets physician-owned
ambulatory surgery centers. The Company believes that due to the increasing
complexity of the regulatory and business aspects of health care, physicians are
increasingly seeking affiliation with experienced ambulatory surgery center
operators having access to capital and other resources. Approximately 48% of the
approximately 1,700 physician-owned ambulatory surgery centers in the United
States are smaller centers performing fewer than 1,000 cases per year and are
often single specialty centers. The Company believes that, although some of
these smaller centers represent acquisition opportunities, the remaining
approximately 880 centers represent the more likely



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<PAGE>   6



universe of acquisition candidates and that in excess of 200 of these centers
meet the Company's acquisition criteria. In addition to the acquisitions of
multi-specialty centers, the Company may take advantage of other opportunities
that present themselves. Opportunities, such as the acquisition of single
specialty centers or ambulatory centers operated by multi-market chains, may be
pursued if those opportunities fit into the Company's growth strategy and
compliment its existing base of centers. During 1996, the Company acquired 16
centers in seven separate transactions. The Company's goal is to effect four to
six acquisitions by the end of 1997 and the Company is currently in various
levels of discussion with additional centers regarding possible acquisition.
There can be no assurance that the Company will be able to acquire additional
surgery centers or, if acquired, that they can be operated profitably.

     Acquisition pricing has varied widely in recent years. In the late 1980's
and early 1990's, large amounts of capital were being directed at many new
ventures in the ambulatory surgery center industry. The Company believed that
establishing scale and credibility were primary considerations to ensure its
future access to capital. As a result, from mid-1991 through 1992, the Company
acquired ten centers. However, during this period, the purchase prices for
surgery centers escalated due to the large amounts of capital available to
acquirors, the increased number of new acquirors in the market and the
relatively low cost of capital to the publicly traded acquirors. The Company
believes that during 1993, because of problems encountered by the non-surgery
center operations of certain of its larger competitors and the uncertainty
surrounding the changes in the health care industry, the capital available to
acquirors of surgery centers began to shrink. However, sellers' expectations
remained high. In light of this, the Company's management chose to (i) impose a
stricter pricing discipline upon its proposed acquisitions and (ii) review
carefully the position in existing markets of each center that the Company
proposed to acquire to evaluate the likelihood of each center's continued growth
and viability, taking into account the likely effects of the various federal and
state health care reform efforts. Although the Company continued to make
acquisition proposals during this period, the Company consummated only two
acquisitions in 1993 and 1994.

     The Company believes that more recently, the pricing environment for
acquisitions of ambulatory surgical centers has improved and it appears that
significant government reform of the U.S. health care delivery system is
unlikely. The Company believes that the current pricing environment for
acquisitions is attractive and that acquisitions prices have declined for
several reasons, including a reduction in potential sellers' expectations and a
reduction in the potential universe of buyers as many of the early acquirors of
surgery centers have either been unable to raise additional capital or have been
acquired themselves.

Development Program
     The Company develops new centers in markets where attractive acquisitions
are not available or where the Company seeks to increase its presence in markets
in which it already operates. In its development efforts, the Company targets
markets that have attractive size and demographic characteristics and a high
level of interest on the part of local physicians, hospitals or payors.
Historically, the Company's development strategy was based on a structure
involving majority Company ownership through joint venture arrangements with
local physicians. In the future, the Company's development strategy may also
include joint venture arrangements with local hospitals,



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physicians and other providers, including the acquisition of centers that are
currently under development. In some cases, this may include instances of
minority ownership by the Company. In light of the Company's experience and the
slower than anticipated startup of the development centers opened by the Company
in 1994, the Company believes that this broadened development strategy will
provide greater access to patients and minimize the time required to become an
established provider.

OPERATION OF SURGERY CENTERS

     The Company operates a network of 32 surgery centers in twelve states and
is currently developing three new surgery centers. The Company's surgery center
network has a total of 93 operating rooms and 46 treatment rooms. The Company's
surgery centers are typically owned through limited or general partnerships in
which a wholly owned subsidiary of the Company owns a general partnership
interest and is the managing general partner of the surgery center. Local
physicians and the subsidiary generally own the limited partnership interests
and, in three instances, hospitals also own limited partnership interests.

     The Company's typical multi-specialty surgery center is a freestanding
facility with three to five fully equipped operating rooms, one or two treatment
rooms and ancillary areas for reception, pre-operative preparation, recovery and
administration. The Company's typical endoscopy center, which performs primarily
gastroenterological procedures, has two treatment rooms and ancillary areas for
reception, pre-operation preparation, recovery and administration and may also
have an operation room. The Company's surgery centers are generally located in
close proximity to physicians' offices. Each of the Company's surgery centers is
available for use only by licensed physicians who have been approved by the
center's medical credentialling committee.




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<PAGE>   8



     The following table sets forth information regarding each of the centers
operated by the Company.

<TABLE>
<CAPTION>
                           Date                              Number of     Number of     Extended
                        operations          Percentage       operating     treatment     recovery
    Location           began by NSC        ownership(1)        rooms         rooms        service
------------------     ------------        ------------        -----         -----        -------
<S>                    <C>                    <C>               <C>            <C>
Bremerton, WA          October 1991            89.0              3              1            X
Brownsville, TX        November 1991           59.0              4              1
Fayetteville, NC       November 1991           50.2              9             --            X
Norman, OK             November 1991           90.0              4              1            X
Greensboro, NC         June 1992              100.0             11              3            X
Seattle, WA            June 1992               54.0              7             --            X
Provo, UT              October 1992           100.0              5             --            X
Elizabethtown, KY      November 1992           79.5              3              1            X
Bakersfield, CA        January 1993            89.0              2              1
Somerset, KY           November 1993           87.5              2              1            X
Las Vegas, NV          August 1994             69.6              4              3            X
Santa Monica, CA       August 1994             88.9              5              3            X
Las Vegas, NV          February 1995           10.0              2              1
Oxnard, CA             August 1995             85.0              4              1
Greensboro, NC         October 1995            80.3              2             --
Chula Vista, CA        February 1996           51.0             --              2
Ft. Worth, TX          February 1996           51.0             --              2
Long Beach, CA         February 1996           50.0             --              3
Newport Beach, CA      February 1996           70.0             --              2
San Diego, CA          February 1996           58.3             --              3
Thousand Oaks, CA      February 1996           80.0             --              2
Kent, OH               April 1996              84.0              2              1
Atlanta, GA            May 1996                66.0              3             --
Billings, MT           January 1996           100.0              4             --
Cincinnati, OH         May 1996                58.0              1              1
Houston, TX            May 1996                60.8              3              1            X
Miami, FL              May 1996                60.0              4              3
Sarasota, FL           May 1996                60.0              1              2
Humble, TX             September 1996          10.0              4              2            X
Auburn, CA             November 1996           88.3              2              2
San Mateo, CA          December 1996           38.5             --              2
Port St. Lucie, FL     January 1997            80.0              2              1
</TABLE>

(1)  Includes general partnership and limited partnership units

     The Company provides services to a wide range of specialties including:
ophthalmology, orthopedic surgery, otorhinolaryngology (ear, nose and throat),
gynecology, general surgery, gastroenterology, anesthesiology, neurosurgery,
oral surgery, plastic surgery, podiatry and urology. Medicare currently approves
over 2,400 types of surgical procedures that may be performed in ambulatory
surgery centers, up from 1,500 types in 1992. Common procedures performed in the
Company's surgery centers include knee and shoulder arthroscopy, laparoscopy,
hernia repair, tubal ligations and removal of cataracts.

     Twelve of the Company's multi-specialty surgery centers currently provide
for extended


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recovery stays. The Company intends to offer extended recovery services at its
multi-specialty facilities if permitted by state law. The Company's ability to
develop such recovery care facilities is dependent on state regulatory
environments. Extended recovery capability generally permits higher acuity and
higher revenue procedures to be performed, including the following:

<TABLE>
<CAPTION>
    SPECIALTY             HIGHER ACUITY PROCEDURES
    ---------             ------------------------
    <S>                   <C>
    Orthopedic surgery    Anterior cruciate ligament repair, shoulder 
                          surgery, total knee replacements, micro discectomies 
                          and laminectomies (back surgery)
    Gynecology            Laparascopically assisted vaginal hysterectomies

    General surgery       Laparascopically assisted hernia repair and 
                          laparascopic cholecystectomy
</TABLE>

     After a physician determines that surgery is necessary and can be
appropriately performed in an ambulatory surgery center, the physician and
patient schedule the surgery and, if appropriate, request extended recovery
services. The surgery center's staff subsequently contacts the patient by
telephone to obtain payor and other patient information and to ensure that the
patient has arranged to be transported home following the recovery period.
Patients generally arrive at the center approximately one hour before scheduled
surgery to allow time for admission and a review of their medical history. A
local or general anesthetic is administered and the surgery is performed. After
surgery, patients generally spend three hours in the recovery area before being
discharged by the center's anesthesiologist or being transferred to the surgery
center's extended recovery area.

     The Company's multi-specialty surgery centers generally employ a staff of
between 15 and 30 and its endoscopy centers generally employ a staff of between
five and fifteen, depending on the size of the facility and the volume of cases.
The staff includes a center administrator, a business manager, a clinical
director, registered nurses, operating room technicians and clerical workers.
The center administrator is responsible for general oversight of the center's
operations, including liaison with physicians and coordination of marketing
efforts and reports to a regional or corporate vice president. The business
manager is responsible for the center's financial records and patient billing
and collections. The clinical director is responsible for providing leadership
and coordination for the professional and support staff and ensuring efficient
scheduling and staffing for the physicians.

     The Company provides each of its surgery centers with a full range of
financial, marketing and operating services as well as data processing support
both for internal operational control and for the orderly conduct of business
office functions. This includes a financial reporting and accounting package, a
billing and accounts receivable system, inventory and accounts payable systems
and a patient record-keeping system. Corporate management also supports local
marketing activities, including the analysis of market conditions and patient
utilization patterns and the development of prices and services which are
competitive with those offered by other local health care providers. The
Company, where appropriate, executes master agreements for purchasing equipment
and supplies enabling each center to realize the economies of scale available
through volume purchases. In addition, the Company provides support for Medicare
certification, local regulatory licensure and



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accreditation efforts.

QUALITY ASSURANCE

     The Company's surgery centers implement quality assurance procedures to
ensure a high level of care provided at the surgery centers. Each center has a
medical advisory committee comprised of three to ten physicians that reviews the
professional credentials of physicians applying for medical staff privileges at
the center. In addition, each center has a medical director who supervises and
is responsible for the quality of medical care provided at the center. The
medical director, who is generally a practicing surgeon or anesthesiologist,
reports directly to the center's medical advisory committee. The center
administrator or clinical director, in conjunction with the medical director,
reviews and monitors surgical outcomes along with procedures performed and the
quality of the logistical, medical and technological support provided to the
physician. In addition, the patient is contacted by a center nurse on the day
following discharge to check on the patient's condition and to survey the
patient as to the quality of care provided. The Company believes that this
direct, systematic feedback from both physician and patient is an effective way
to monitor the level of care at each center. All of the Company's centers are
Medicare certified, which certification is required to obtain Medicare
reimbursement. Additionally, the Company's surgery centers seek approval by
either the Joint Commission for Accreditation of Health Care Organizations
("JCAHO") or the Accrediting Association of Ambulatory Health Care ("AAAHC"),
which are industry-based, self-regulatory organizations which grant
accreditation of surgery centers based on established criteria as an additional
indication of a center's quality. The Company is seeking accreditation in all of
its centers that have not been approved by either the JCAHO or the AAAHC.

MARKETING

     Marketing activities directed at physicians and other health care providers
are coordinated locally by the individual center and are supplemented by
corporate management. These activities generally emphasize advantages offered by
the Company's surgery centers, such as the proximity of surgery centers to
physicians' offices, the ability to schedule consecutive cases without
preemption by inpatient or emergency procedures, the rapid turnaround time
between cases, the high technical capability and low turnover and consistency of
nurse staffing, state-of-the-art surgical equipment and the simplified
administrative procedures. A target list of physicians is developed at each
local surgery center. Although the center administrator is the primary point of
contact, physicians who utilize the Company's surgery centers are important
sources of recommendation to other physicians regarding the benefits of using
the Company's surgery centers. The Company periodically reviews each center's
physician marketing list and its progress in contacting and successfully
attracting local physicians.

     The Company also markets its surgery centers directly to payors, including
HMOs, PPOs, other managed care organizations, employers and other payor-groups.
Payor-group marketing activities conducted by the Company's management and
center administrators emphasize the high quality of care, cost advantages and
convenience of the Company's surgery centers and are focused on making each
center an approved provider under local managed care plans. In addition, the
Company is pursuing relationships with physician groups in its markets in order
to promote jointly


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its surgery centers and the physician groups to payors. In some instances, this
may involve invoicing the centers' charges, on a case rate basis, with the
surgeon, anesthesiologist, lab, x-ray and pathology charges combined to provide
the payor with one all-inclusive bill to cover an episode of care.

COMPETITION

     In each of its markets, the Company competes principally with hospitals and
other operators of freestanding surgery centers to attract physicians and
patients to its ambulatory surgery centers and for inclusion in managed care
programs. In developing new surgery centers and acquiring existing surgery
centers the Company competes with other surgery center companies and local
hospitals. In competing for physicians and patients, important competitive
factors are convenience, cost, quality of service, physician loyalty and
reputation. Hospitals have many competitive advantages in attracting physicians
and patients, including established standing in the community, historical
physician loyalty and convenience for physicians making rounds or performing
inpatient surgery in the hospital. However, the Company believes that many
physicians prefer to utilize and affiliate with freestanding ambulatory surgery
centers due to greater scheduling flexibility, more consistent nurse staffing
and faster turnaround time between cases, thereby allowing a physician to
perform more surgeries in a defined period of time.

GOVERNMENT HEALTH CARE REGULATION

Health Care Reform

     In recent years, a variety of legislative proposals designed to change
access to and payment for health care services in the United States have been
introduced. Although no health reform proposals were passed by Congress to date,
other proposed health care reform legislation, including the regulation of
patient referral practices, reimbursement of health care providers, formation
and operation of physician joint ventures and tort reform, has been and may be
considered by Congress and the legislatures of many of the states in which the
Company operates. No predictions can be made as to whether health care reform
legislation or similar legislation will be enacted or, if enacted, its effect on
the Company. Any federal or state legislation prohibiting, among other things,
the referral to or treatment of patients at surgery centers by health care
providers with an investment interest in the surgery centers may have a material
adverse effect on the Company. In the event that Federal or state regulations
prohibit the ownership of surgery centers by physicians, the Company would seek
to purchase the interests held by its limited partner physicians. Some of the
Company's limited partnership agreements contain a provision which allows the
Company to purchase the interest of each limited partner for an amount equal to
a multiple of the partner's allocation of taxable income in the most recent
calendar year. The Company may, at its option, issue cash, notes, or stock,
including unregistered stock, to purchase such limited partners' interests. The
Company believes that it would be able to buy out all of its limited partners if
required.

Regulatory Environment

     The Company's surgery centers and the physicians utilizing its centers are
subject to numerous


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regulatory, accreditation and certification requirements, including requirements
related to licensure, certificate of need, reimbursement from insurance
companies and other private third-party payors, Medicare and Medicaid
participation and reimbursement, and utilization and quality review
organizations. The grant and renewal of these licenses, certifications and
accreditations are based upon governmental and private regulatory agency
inspections, surveys, audits, investigations or other reviews, including
self-reporting requirements. An adverse review or determination by any
regulatory authority could result in denial of a center's plan of development or
proposed expansion of facilities or services, the loss or restriction of
licensure by a center or one of its practitioners, or loss of center
certification or accreditation. A regulatory authority could also reduce, delay
or terminate reimbursement to a center or require repayment of reimbursement
received. The loss, denial or restriction of any such licensure, accreditation,
certification (including certificates of need or exemption therefrom) or
reimbursement through changes in the regulatory requirements, an enforcement
action, or otherwise, could have a material adverse effect on the Company.

     Federal Fraud and Abuse Statute. Under the Medicare and Medicaid programs,
the federal government enforces a federal statute (the "Fraud and Abuse
Statute") that prohibits the offer, payment, solicitation or receipt of any
remuneration, directly or indirectly, overtly or covertly, in cash or in kind to
induce or in exchange for (i) the referral of patients covered by the programs,
or (ii) the leasing, purchasing, ordering, or arranging for or recommending the
lease, purchase, or order of any item, good, facility or service covered by the
programs. The federal courts have held that an arrangement violates the Fraud
and Abuse Statute if one purpose of a transaction which results in the payment
of remuneration (including the distribution of profits) is to induce the
referral of patients covered by the Medicare and Medicaid programs, even if
another purpose of the payment is to compensate an individual for professional
services. Violations of such statute can result in criminal penalties, civil
monetary penalties and exclusion from the Medicare and Medicaid programs. In an
attempt to clarify which arrangements are exempt from program exclusion, civil
sanctions or criminal prosecution under the Fraud and Abuse Statute, the
Department of Health and Human Services published in 1991 a set of "safe harbor"
regulations outlining practices that are deemed not to violate the Fraud and
Abuse Statute. Although compliance with one of the safe harbors assures
participants that an arrangement does not violate the Fraud and Abuse Statute,
failure of an arrangement to fit within a safe harbor provision does not
necessarily mean that arrangement violates the Fraud and Abuse Statute. Although
the Company has determined that the current ownership structure of its surgery
centers does not fit within any of the safe harbors applicable to investments in
health care providers by physicians who are in a position to make or influence
referrals, it believes that its arrangements with physicians do not fall within
the activities prohibited by the Fraud and Abuse Statute. However, no assurances
can be given that regulatory authorities might not assert a contrary position or
that new laws, or the interpretation of existing laws, might not adversely
affect relationships established by the Company with physicians or other health
care providers or result in the imposition of penalties on the Company or its
facilities.

     "Stark Laws." The Company's surgery centers and their physicians, dentists
and podiatrists are also subject to the Ethics in Patient Referrals Act of 1989
(the "Stark Law"). Unless excepted, a physician, dentist or podiatrist may not
make a referral of a Medicaid or Medicare patient to any clinical laboratory
services provider with whom he or she has a financial relationship (either



                                       12

<PAGE>   13



investment or compensation) for such restricted services and any provider who
accepts such a referral may not bill for the service provided pursuant to the
referral. Sanctions for violating the Stark Law can include civil monetary
penalties and exclusion from Medicare and Medicaid. Unlike the Fraud and Abuse
Statute in which an activity may fall outside a safe harbor and still not
violate the law, a referral under the Stark Law that does not fall within an
exception is strictly prohibited. In August 1993, Congress passed legislation
("Stark II") that, effective January 1, 1995, expanded the self-referral ban to
include a number of health care services provided by entities with which the
physicians may have an ownership interest or a financial relationship, although
it does not specifically prohibit referrals by physicians with an ownership
interest in, or financial relationship with, an ambulatory surgery center,
provided that the surgery services are not provided as "outpatient hospital
services." Ambulatory surgery is not included in the list of restricted services
and the Company does not believe that ambulatory surgery is subject to the Stark
restrictions.

     AMA Restrictions. In June 1994, the American Medical Association severely
restricted the ability of physicians to refer to entities in which such
physicians have an ownership interest, except when the physician directly
provides care or services at a facility that is an extension of the physician's
practice and in very limited circumstances such as in rural areas where there is
lack of available capital from non-physician sources. If the American Medical
Association changes its ethical requirements to preclude all referrals by
physicians, physician referrals to the Company's ambulatory surgery centers
could be adversely affected. It is possible that a prohibition on physician
ownership could adversely affect the Company's future operations, although the
Company believes that the majority of physicians would continue to perform
surgery at the surgery centers even if they were no longer limited partners.

     State Anti-Referral Laws. In addition to the federal Fraud and Abuse
Statute and the Stark Laws, certain states in which the Company operates have
enacted similar patient referral legislation. The Company believes its surgery
centers' operations are consistent with applicable statutes of the states in
which they operate because either the state statute (i) excludes from the
definition of referral the recommendation by a health care provider that a
patient utilize the types of services provided at the center, (ii) exempts
health care provider investors who directly provide services at the facility and
are personally involved in the rendering of care to the referred patient, or
(iii) does not encompass the provider specialty or services rendered at the
center.

     Infectious Waste. As generators of infectious waste, the Company's surgery
centers are required to satisfy all federal, state and local waste disposal
requirements. If any regulatory agency finds a center to be in violation of
waste laws, penalties and fines may be imposed for each day of violation, and
the affected center could be forced to cease operations. The Company believes
its surgery centers dispose of such waste properly.

INSURANCE

         The Company maintains medical malpractice insurance under one insurance
policy in the amount of $1.0 million per occurrence and $3.0 million in the
aggregate, with retention limits of $100,000 per occurrence and $200,000 in the
aggregate. In addition, the Company maintains excess


                                       13

<PAGE>   14



medical malpractice and general liability insurance in the amount of $25.0
million.

EMPLOYEES

     As of December 31, 1996, the Company had 519 full-time employees, 24 of
whom were corporate personnel. The remaining full-time employees, most of whom
are nurses and office personnel, work at the surgery centers. None of the
Company's employees is covered by a collective bargaining agreement. The Company
considers relations with its employees to be good.

RECENT DEVELOPMENTS

     Effective January 1, 1997, the Company purchased an 80% interest in Day
Surgery Center located in Port St. Lucie, Florida. The acquisition was accounted
for using the purchase method of accounting.

ITEM 2. PROPERTIES

     The Company's multi-specialty surgery centers range from 4,900 to 26,000
square feet, with the typical surgery center occupying approximately 13,000
square feet, while the endoscopy centers range from 2,600 to 4,800 square feet.
The Company's surgery centers typically lease their facilities pursuant to
long-term lease agreements expiring from 1997 to 2015, most of which contain
options to extend the lease period for up to ten additional years. In certain
instances, the Company has financed the surgery center facility through
long-term mortgages or other financing arrangements in which the lender has a
secured or collateralized interest. The Company's principal executive officers
are situated in approximately 8,500 square feet located at 30 South Wacker
Drive, Suite 2302, Chicago, Illinois 60606. The Company leases this property and
the current lease expires in 2002. See "Operation of Surgery Centers" above for
a list of the Company's surgery centers.

<TABLE>
<CAPTION>
                                       EXPIRATION                   TYPE OF
           LOCATION                       DATE                    ENCUMBRANCE
           --------                       ----                    -----------
        <S>                          <C>                             <C>
        Billings, MT                 Month to Month                  Lease
        Greensboro, NC                  May 1999                     Lease
        Auburn, CA                      June 1999                    Lease
        Chula Vista, CA               January 2000                   Lease
        Bremerton, WA                  August 2000                   Lease
        Atlanta, GA                   November 2000                  Lease
        San Mateo, CA                  March 2001                    Lease
        Houston, TX                     May 2002                     Lease
        Norman, OK                      June 2002                    Lease
        Seattle, WA                   November 2002                  Lease
        San Diego, CA                 January 2003                   Lease
        Somerset, KY                    June 2003                    Lease
        Port St. Lucie, FL             August 2003                   Lease
        Greensboro, NC                January 2004                   Lease
</TABLE>


                                       14

<PAGE>   15
<TABLE>
        <S>                          <C>                             <C>
        Sarasota, FL                   March 2004                    Lease
        Newport Beach, CA              April 2004                    Lease
        Santa Monica, CA               April 2004                    Lease
        Kent, OH                        May 2004                     Lease
        Long Beach, CA                  May 2004                     Lease
        Fort Worth, TX                  June 2004                    Lease
        Cincinnati, OH                October 2004                   Lease
        Miami, FL                     December 2004                  Lease
        Thousand Oaks, CA             January 2005                   Lease
        Bakersfield, CA                 May 2008                     Lease
        Las Vegas, NV                   June 2008                    Lease
        Las Vegas, NV                   July 2009                    Lease
        Provo, UT                    September  2012                 Lease
        Fayetteville, NC                July 2015                    Lease
        Brownsville, TX               November 2001             Collateralized
        Elizabethtown, KY             February 2008                Mortgage
        Oxnard, CA                         ---                       Owned
</TABLE>

ITEM 3. LEGAL PROCEEDINGS

     The Company is party to certain claims and litigation in the ordinary
course of business. The Company is not involved in any legal proceeding that it
believes will result, individually or in the aggregate, in a material adverse
effect upon its financial condition or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to the Company's security holders during the
fourth quarter of fiscal 1996. 


                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCK HOLDER MATTERS

     The common stock of the Company has been included for quotation in the
Nasdaq National Market under the symbol "NSCI" since the Company's initial
public offering of common stock on November 10, 1995. Prior to that time, there
was no public market for the common stock. The following table sets the high and
low closing prices for the common stock for the periods indicated as reported by
the Nasdaq National Market.



                                       15

<PAGE>   16

<TABLE>
<CAPTION>
                                                     High              Low
                                                    ------            ------
     <S>                                            <C>               <C>
     Year Ended December 31, 1995                               
          Fourth Quarter (1)(2)                     $15.33            $12.17
  
     Year Ended December 31, 1996
          First Quarter(1)                          $22.00            $14.33
          Second Quarter(1)                          31.50             18.67
          Third Quarter                              30.25             22.50
          Fourth Quarter                             38.00             24.75

</TABLE>

(1) Adjusted to reflect the 3-for-2 stock split of the Company's common stock
    effected in May 1996. 
(2) Represents trading of the common stock from November 10, 1995 to 
    December 31, 1995.

     The Company has never paid cash dividends on its common stock and the Board
of Directors intends to continue a policy of retaining any earnings for use in
the Company's operations and to fund the Company's and its area developers'
expansion program. The Company does not anticipate paying any cash dividends in
the foreseeable future. In addition, the Company's loan agreement contains a
prohibition on the payment of any cash dividends. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources".

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

     The information contained in the Company's Annual Report to Shareholders
for the fiscal year ended 1996 (the "Annual Report"), under the caption
"Selected Consolidated Financial Highlights," and only such information, is
incorporated herein by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

     The information contained in the Company's Annual Report to Shareholders,
under the caption "Management's Discussion and Analysis of Financial Condition
and Results of Operations," and only such information, is incorporated herein by
reference.



                                       16

<PAGE>   17



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The information contained in the Company's Annual Report to Shareholders,
under the captions "Consolidated Balance Sheets," "Consolidated Statements of
Income," "Consolidated Statements of Shareholders' Equity," "Consolidated
Statements of Cash Flows," "Notes to Consolidated Financial Statements" and "
Report of Independent Auditors," and only such information, is incorporated
herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH THE ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

     None

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

DIRECTORS

     The information appearing under the captions "Election of Class II
Directors" and "Class I and Class III Directors" in the Company's proxy
statement for the Annual Meeting of the Stockholders scheduled for May 21, 1997
(the "Proxy Statement") is incorporated herein by reference.

EXECUTIVE OFFICERS

<TABLE>
<CAPTION>
                                                                                     Officer
Executive Officer's Name      Age                     Position(s)                     Since
------------------------      ---                     -----------                    -------
<S>                           <C>      <C>                                            <C>
E. Timothy Geary              46       Chairman of the Board of Directors, Chief      1987
                                       Executive Officer and President
John G. Rex-Waller            44       Executive Vice President,                      1991
                                       Secretary and Treasurer
Bryan S. Fisher               38       Vice President and Chief Financial Officer     1993
Dennis D. Solheim             45       Vice President of Development                  1991
Richard D. Pence              42       Vice President of Operations                   1991
Dennis J. Zamojski            39       Vice President of Operations                   1992
</TABLE>

     Mr. Geary, has served as the Company's Chief Executive Officer, President
and Chairman of the Board since its founding in 1987. Mr. Geary served as a Vice
President of Operations and Development, respectively, with Medical Care
International, Inc. ("Medical Care"), a large owner and operator of freestanding
ambulatory surgery centers, from 1983 to 1987. Mr. Geary is a graduate of the
College at the University of Chicago and the University of Chicago Graduate
School of Business. Mr. Geary serves on the Board of the Federated Ambulatory
Surgery Association ("FASA"), an industry association.


                                       17

<PAGE>   18



     Mr. Rex-Waller has served as a director, Secretary and Treasurer, since
1991; as its Chief Financial Officer from 1991 to 1995; and as its Executive
Vice President since 1996. Mr. Rex-Waller was a Senior Vice President-Corporate
Finance with Dean Witter Reynolds Inc. from 1984 to 1991. Mr. Rex-Waller is a
graduate of the University of Chicago Graduate School of Business, attended
Hertford College, Oxford as a Rhodes Scholar and has an undergraduate degree in
Civil Engineering from the University of Cape Town.

     Mr. Fisher joined the Company in 1991 as Controller, has served as a Vice
President of the Company since 1993, and as the Company's Chief Financial
Officer since 1996. Mr. Fisher was an Accounting Manager and Assistant
Controller for Medical Care and, prior to that, an auditor for KPMG Peat Marwick
from 1984 to 1989. Mr. Fisher is a graduate of Brigham Young University and is a
certified public accountant.

     Mr. Solheim joined the Company as Project Manager in 1988 and has served as
a Vice President of the Company since 1991. Mr. Solheim was a Regional Director
for Medical Care from 1983 to 1988. Mr. Solheim is a graduate of Iowa State
University.

     Mr. Pence joined the Company as a Vice President in 1991. Mr. Pence was a
Vice President and, previously Controller, for Medical Care from 1982 to 1991.
Mr. Pence is a graduate of the University of Alabama and the Masters of Business
Administration program of Southern Methodist University.

     Mr. Zamojski joined the Company as a Vice President in 1992. Mr. Zamojski
was a Vice President with Medical Care from 1983 to 1992. Mr. Zamojski is a
graduate of the nursing program of Erie Community College, the State University
of New York and the Masters of Health Care Administration program of the Medical
College of Virginia/Virginia Commonwealth University.

ITEM 11. EXECUTIVE COMPENSATION.

     The information appearing under the caption "Executive Compensation" in the
Proxy Statement is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The information appearing under the caption "Principal Stockholders and
Securities Ownership of Management" in the Proxy Statement is incorporated
herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     The information appearing under the captions "Compensation of Directors"
and "Compensation Committee Interlocks and Insider Participation" in the Proxy
Statement are incorporated herein by reference.


                                       18

<PAGE>   19



                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K.

(A)(1) FINANCIAL STATEMENTS

     Reference is made to the information set forth in Part II, Item 8 of this
Report, which information is incorporated herein by reference.

(A)(2) FINANCIAL STATEMENT SCHEDULES

        (i)  Schedule II -- Valuation of Qualifying Accounts          S-1
       (ii)  Report of Independent Auditors on Schedules        See Exhibit 23.1

     All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission have been
omitted because the required information is not significant or is included in
the financial statements or the notes thereto, or is not applicable.

 (A)(3) EXHIBITS

     The exhibits to this report are listed in the Exhibit Index included
elsewhere herein. Included in the exhibits listed therein are the following
exhibits which constitute management contracts or compensatory plans or
arrangements:

<TABLE>
    <S>     <C>
    10.1    Amended and Restated 1992 Stock Option Plan of the Company 
    10.2    Employee Stock Purchase Plan of the Company 
    10.9    Form of Employment Agreement between the Company and E. Timothy Geary 
    10.10   Form Employment Agreement between the Company and John G. Rex-Waller 
    10.11   Form of Employment Agreement between the Company and Dennis D. Solheim
    10.12   Form of Employment Agreement between the Company and Richard D. Pence 
    10.13   Form of Employment Agreement between the Company and Dennis J. Zamojski 
    10.14   Management Agreement dated November 22, 1991 among Physicians Ambulatory
            Management Corp., NSC Fayetteville, Inc. and Fayetteville Ambulatory Surgery
            Center Limited Partnership
    10.27   1997 Non-Employee Directors Stock Option Plan
</TABLE>


(B) REPORTS ON FORM 8-K

     The Company did not file any reports on Form 8-K during the fourth quarter
of 1996.



                                       19

<PAGE>   20



(C) EXHIBITS

<TABLE>
<CAPTION>
     Exhibit
     Number      Description of Exhibit                                       Page +
     -------     ----------------------                                       ------
      <S>        <C>                                                          <C>
       3.1*      Certificate of Incorporation of the Company
       3.2       Bylaws of the Company
       4.1*      Specimen certificate representing shares of Common Stock
       4.2*      Debenture and Warrant Purchase Agreement dated June 22,
                 1992 between the Company and WCAS Capital Partners II, L.P.
                 ("WCAS II")
       4.3*      10 1/2% Subordinated Redeemable Debenture Due June 22,
                 2002 dated June 22, 1992 issued by the Company to WCAS II
       4.4*      10 1/2% Subordinated Redeemable Debenture Due October 27,
                 2002 dated October 27, 1992 issued by the Company to WCAS
                 II
      10.1       Amended and Restated 1992 Stock Option Plan of the Company
      10.2**     Employee Stock Purchase Plan of the Company
      10.3*      Lease dated December 22, 1988 between Surgical Center Investors,
                 Ltd.  ("SCI") and Surgical Center of Greensboro, Inc. ("SCE")
      10.4*      Agreement dated June 23, 1992 among SCI, Surgical Care and SCE
      10.5*      Second Amendment to Lease dated September 24, 1992 between SCI
                 and NSC Greensboro, Inc.
      10.6*      Common Stock Purchase Agreement dated August 18, 1994 between
                 the Company and J.P.  Morgan Capital Corporation ("JPMCC")
      10.7*      Amended and Restated Credit Agreement dated August 18, 1994
                 between the Company and Continental Bank
      10.8*      Supplemental Agreement No.  3 dated March 31, 1995 between the
                 Company and Bank of America Illinois (formerly known as
                 Continental Bank)
      10.9*      Form of Employment Agreement between the Company and
                 E. Timothy Geary ("ETG")
      10.10*     Form Employment Agreement between the Company and John G.
                 Rex-Waller ("JRW")
      10.11*     Form of Employment Agreement between the Company and
                 Dennis D. Solheim
      10.12*     Form of Employment Agreement between the Company and
                 Richard D. Pence
      10.13*     Form of Employment Agreement between the Company and
                 Dennis J. Zamojski
      10.14*     Management Agreement dated November 22, 1991 among
                 Physicians Ambulatory Management Corp. ("PAM"), NSC
                 Fayetteville, Inc. and Fayetteville Ambulatory Surgery Center
                 Limited Partnership
      10.15*     Amended and Restated Registration Rights Agreement dated
                 August 18, 1994 among the Company, Welsh, Carson, Anderson
</TABLE>


                                       20

<PAGE>   21
<TABLE>
<CAPTION>
      <S>        <C>                                                          <C>
                 & Stowe V, L.P. ("WCAS V"), WCA Management Corp., Camp
                 Hill Associates II, WILBLAIRCO Associates, ETG, JRW and
                 JPMCC
      10.16*     Convertible Subordinated Note dated December 16, 1994,
                 for $1,750,000 of the Company made payable to Village
                 Ambulatory Surgery Associates, Inc. ("VASA")
      10.17*     Subordinated Note dated December 16, 1994, for $350,000, of
                 the Company made payable to VASA
      10.18*     Convertible Subordinated Note dated December 16, 1994, for
                 $780,000, of the Company made payable to  VASA
      10.19*     Convertible Subordinated Note dated December 16, 1994, for
                 for $275,000, of the Company made payable to PAM
      10.20*     Convertible Subordinated Note dated December 16, 1994, for
                 for $68,752, of the Company made payable to John T. Henley, Jr.
      10.21*     Warrant Purchase Agreement dated June 24, 1992 between the
                 Company and WCAS V
      10.22*     Stock Subscription Warrant dated June 24, 1992 issued by the
                 Company to WCAS V
      10.23*     Warrant Amendment dated August 18, 1994 between the Company
                 and WCAS II
      10.25*     Second Amendment to Warrant dated August 18, 1994 between the
                 Company and WCAS II
      10.26*     Second Amendment to Warrant dated December 31, 1994 between
                 the Company and WCAS II
      10.27      1997 Non-Employee Directors Stock Option Plan
      11.1       Computation of Income Per Common Share
      13.1       Registrant's Annual Report to Shareholders for the fiscal year
                 ended 1996 (for the information of the Commission and not
                 deemed "filed" with the Commission, except for the
                 portions expressly incorporated by reference in this
                 report).
      21.1       Subsidiaries of the Company
      23.1       Consent of Ernst & Young LLP
      27.1       Financial Data Schedule
</TABLE>

*Incorporated by reference to the corresponding exhibit to the Company's
registration statement on Form S-1 Registration No. 33-96996

**Incorporated by reference to the corresponding exhibit to the Company's
registration statement on Form S-1 Registration No. 333-12927.

+This information appears only in the manually signed copy of this Registration
Statement.


                                       21

<PAGE>   22



                                   SIGNATURES


     Pursuant to the requirements of Section 13 or 15(d) of the Securities Act
of 1934, the registrant has duly caused this to be signed on its behalf by the
undersigned, thereunto duly authorized.

                              NATIONAL SURGERY CENTERS, INC.
 
                             By:    /s/  E. Timothy Geary
                                     -----------------------------------------
                                     E. Timothy Geary
                                     Chairman of the Board of Directors, Chief
                                     Executive Officer and President

                              Date:  March 24, 1997
                                     ------------------------------------------

     Pursuant to the requirements of the Securities Act of 1934, this report has
been signed below by the following persons on behalf of the registrant in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
               SIGNATURE                                TITLE
               ---------                                -----
     <S>                               <C>       
      PRINCIPAL EXECUTIVE OFFICER:

          /s/ E. Timothy Geary          Chairman of the Board of Directors,
      ----------------------------     Chief Executive Officer and President
            E. Timothy Geary           

             March 24, 1997
      ----------------------------        
                  Date

    PRINCIPAL FINANCIAL OFFICER AND
      PRINCIPAL ACCOUNTING OFFICER:

           /s/ Bryan S. Fisher        Vice President and Chief Financial Officer
      ----------------------------
             Bryan S. Fisher

             March 24, 1997
      ----------------------------
                  Date
</TABLE>

                                       22

<PAGE>   23


<TABLE>
<CAPTION>
     <S>                                             <C>       
                  Directors:

        /s/ John G. Rex-Waller                       Director
      ----------------------------
           John G. Rex-Waller

             March 24, 1997
      ----------------------------
                  Date



           /s/ John K. Carlyle                       Director
      ----------------------------
            John K. Carlyle

            March 24, 1997
      ----------------------------
                  Date


          /s/ Russell L. Carson                      Director
      ----------------------------
            Russell L. Carson

            March 24, 1997
      ----------------------------
                  Date


      /s/ John T. Henley, Jr., M.D.                  Director
      ----------------------------
        John T. Henley, Jr., M.D.

            March 24, 1997
      ----------------------------
                  Date


       /s/ Donald E. Linder, M.D.                    Director
      ----------------------------
         Donald E. Linder, M.D.

            March 24, 1997
      ----------------------------
                  Date


         /s/ Rocco A. Ortenzio                       Director
      ----------------------------
            Rocco A. Ortenzio

            March 24, 1997
      ----------------------------
                   Date

</TABLE>

                                       23

<PAGE>   24



Schedule II - Valuation of Qualifying Accounts
(in thousands)

<TABLE>
<CAPTION>
                                        Charge to                       Charged to
                                        Beginning      Costs and           Other                         Ending
                                         Balance       Expenses         Accounts(1)   Deductions(2)      Balance
                                        ---------      ---------        -----------   -------------      -------
<S>                                        <C>           <C>              <C>            <C>             <C>
Allowance for Uncollectible Accounts Receivable

Year ended December 31, 1994               $ 768         $1,067           $   -          $  737            $1,098

Year ended December 31, 1995               1,098          1,166              46           1,143             1,167

Year ended December 31, 1996               1,167          2,674              94           2,212             1,723
</TABLE>

--------

     1    Represents allowances for uncollectible accounts of acquired centers
          net of centers divested.

     2    Represents charges off of accounts receivable net of recoveries.



                                       24