Gastroenterology, while still largely independent, has seen an overall increase in consolidation with the rise of supergroups like Dallas-based GI Alliance.
The group already operates over 800 locations and has added at least four this year in Colorado, Illinois, Missouri and Rhode Island, more than any other single group.
In 2022, GI Alliance completed a physician-led buyout facilitated by a $785 million investment from Apollo Hybrid Value funds, a private equity group. GI Alliance is also backed by Waud Capital Partners, another PE firm. Gastroenterology is the most common specialty among ASCs, making up 32% of all cases, according to VMG Health's "Multi-Specialty ASC Benchmarking Study" for 2022.
Although the number of gastroenterology transactions saw a slight decline in 2023, GI groups are still growing. At least 108 gastroenterology practices consolidated between 2019 and 2023, and more than 12 GI companies expanded their footprint in 2023.
"Private equity certainly has made mincemeat of a few different industries and healthcare," Robbie Allen, former CEO of One GI, told Becker's. "I think they, by and large, have done a decent job in GI. They've brought focus to a really fragmented specialty. GI has historically skewed very independent; there are very few large mega groups. The money that's being focused and put in by private equity tends to drive the private equity-style model of improving the industry, which is to focus on three, maybe four, things over a period of three or four years, and really drive value on those things with a very conscious effort, which tends to sharpen the tools. It can force and accelerate changes that are already happening in healthcare and I think, by and large, that's what it's done. There's no question it's here."