Cardiology is the fastest-growing ASC specialty and, as such, has been drawing attention from private equity groups and other consolidators, as cardiovascular procedures continue to migrate to the ASC setting.
However, many cardiology ASCs have managed to maintain their independence in the face of these market factors. One example is Richmond-based Virginia Cardiovascular Specialists.
"There aren't very many of us. We should start with that," John Onufer, MD, a cardiologist and medical director of VCS recently told Becker's. He said that while the ASC opened in January 2023, a number of insurance and other administrative requirements had to be met before the practice was fully in operation — which is why a solid managerial team is key to success in the ASC cardiology space.
Perhaps even more key in maintaining both success and independence as a cardiovascular ASC is VCS' investment structure. All VCS shareholders, including physicians, have an equal status in company decision-making.
"The initial [founding] members of the group made it pretty clear early on that the success of the group would be greatest if all shareholders have equal status," Darryn Appleton, MD, the director of VCS' cardiac catheterization lab, told Becker's. "So there's no seniority kind of situation where senior members have more say. Whenever we're coming up with new ideas to launch a venture like this, it's all based on equal votes."
This is key for physician groups like VCS. While private equity activity in healthcare slowed down in 2023, physician groups were a major target of PE investment in 2021 when buying boomed at 317 recorded acquisitions.
Private equity deals appeal often to physician groups for a number of reasons, Mitch Schwarzbach, a Denver-based healthcare consultant, told Becker's.
Practices led by older physicians often find financial comfort in the exit planning provided by PE and many physicians are relieved at the thought of being able to come to work and focus solely on patients while PE firms fund and manage the day-to-day operations.
The problem with these deals, as Mr. Schwarzbach points out, is that members of physician groups and those who carry on at the practice are left to deal with the lack of physician autonomy post-acquisition.
"[About] four or five months later, they realize that they are not what they were, and cannot be perceived how they were," Mr. Schwarzbach said. "They are just a number. And they realize that if they quit, they will just hire another urologist to come in, and that's deflating to no level, because they're the ones who built that practice. They're the ones who feel, you know, that self gratification. They're the ones who threw their heart and soul into doing this kind of stuff."
But by focusing on a more equal and collaborative style of management structure, independent cardiology practices may be able to avoid this fate.
"It's a lot of work to be all on the same page about these different things. Of course, there's going to be different opinions," Dr. Appleton said. "The active process of governing in a big, independent group like that, that's trying to do big things, means we really have to meet frequently and pay close attention to what's happening across the practice."