Private equity investment has grown rapidly in 2021 with groups such as PE GI Alliance, Gastro Health and GI Alliance snapping up deals.
Four gastroenterologists told Becker's ASC Review how they predict private equity will affect the GI landscape and patient care.
Note: Responses were edited for style.
Scott Plaehn, DO. Michigan Gastroenterology Institute (East Lansing): I believe there will continue to be consolidation of the market with a focus on delivery of value-based care. As multiple offices associate, it will be easier to coordinate best practices and monitor quality metrics ultimately providing great benefit to our patients and primary care partners.
Brian Dooreck, MD. Memorial Hospital Pembroke (Pembroke Pines, Fla.): This is something that is happening and is somewhat inevitable. We have been watching it in our own backyard here for years here in South Florida. Now we can see what Gasto Health has become, and what groups like the GI Alliance are. What is clear to us now, is that we "need to be in the conversation" about private equity — as we now are actively choosing to do so — whether we go down that road or not.
Larry Schiller, MD. Digestive Health Associates of Texas (Dallas): Private equity organizations will continue to vacuum up private practices throughout the country as older gastroenterologists see the potential to cash out. The challenge for PE organizations will be to use their scale to build value, but expenses can only be cut so far without impacting the quality of services. Competition from hospital or medical school-based practice groups eventually will limit the growth of PE organizations in larger communities. Consolidation of PE organizations will be the next stage of growth for these businesses with disposition of these larger entities uncertain at present. Possible outcomes include going public with an initial public offering of shares once a critical size is reached, or sale to health care systems or private insurance companies. For gastroenterologists individually, salaries should be stable for the near term, but opportunities to profit from ancillary services may be limited.
Medhi Ferdows, MD. Pacific Gastroenterology (Vancouver, Wash.): It appears that they are acquiring more practices every day. I am concerned about medical care being provided by corporations that may look first at profitability then at the patient's quality of care.
Privately owned practices are more likely to be concerned about patient care since their reputation and livelihood depends on the quality of care that they deliver. However this is being threatened by corporations including hospitals which buy practices too and try to force practices to join them or be driven out by limiting their referral. If the choice is to join a hospital or private equity, then I prefer private equity that allows the practice owner to determine how to practice medicine rather than corporate managers.