The gastroenterology industry continues to consolidate, with private equity-backed GI giants such as Miami-based Gastro Health and Southlake, Texas-based GI Alliance scooping up physicians.
The aging population and changing colorectal cancer screening guidelines will continue to drive consolidation as demand for gastroenterology services increases, according to consulting firm HealthCare Appraisers' industry outlook report, published in October.
Around 10% of gastroenterology physicians are a part of a private equity-backed platform, according to the report. There are around 2,100 gastroenterology physician practices in the country.
Many gastroenterologists are looking to affiliate with these larger groups, but others are looking to employment, following the larger trend of physicians heading to employed models.
Ray Keate, MD, assistant professor of medicine at Richmond, Va.-based VCU Health, told Becker's that young people finishing fellowships have concerns about private equity groups, as well as staying in academics, so many are seeking hospital employment.
Employment is particularly attractive to young gastroenterologists who often are facing large debts and looking for more financial stability.
"Many young gastroenterologists are running away from private practice," Adam Levy, MD, a gastroenterologist in Macon, Ga., told Becker's. "This is due to the high cost of educational loans and an environment where hospitals are offering large salaries to graduates. It is difficult for private practice to compete upfront due to declining reimbursements."
Physicians with "longer-term outlooks," however, are looking to private practice, Dr. Levy added, as ownership allows for autonomy and financial gain. Self-employed GIs earned an average of $81,460 more annually in 2022 than those with similar qualifications who are employed, according to Medscape's 2023 "Gastroenterologist Compensation Report."
While fewer physicians are heading to private practice, it is attractive for those with "a bit of an appetite for risk," Gabriel Ionescu, MD, a gastroenterologist at Wyckoff Heights Medical Center in New York City, told Becker's.
"The challenge is that each physician is trading in a comfortable [employed] position, albeit with limited autonomy, for potential financial risk," he said. "Keeping a practice open will take more effort to comply with government regulations and reporting, so reducing the burden may help. … Eventually, building and monetizing the equity of the practice should be enough to incentivize physicians to seek alternatives to employment."
But employment can offer stability for gastroenterologists looking for the reassurance of income regularity and benefits.
"Given the current landscape, employment-based opportunities are appealing for young graduates for many reasons," Eric Esrailian, MD, a gastroenterologist and a professor at Los Angeles-based UCLA, told Becker's. "Like UCLA Health, many academic health systems have also created clinician-educator career tracks that provide opportunities for growth personally and professionally while making a contribution to the community. Knowing the landscape, these attributes are exactly what I would be looking for in a position."