Here are five key notes on the influence of private equity in gastroenterology:
1. Nearly 10% of U.S. gastroenterologists are part of PE-backed practices, according to a 2023 study published in Gastroenterology & Hepatology.
2. The decline of independent GI practices is leading to consolidation. According to the study, the number of practices with three to nine physicians decreased by 41% in the last decade, while the number of practices with more than 500 physicians increased by two-thirds.
3. The study cites Webster Equity Partners-backed One GI as a case study for PE-backed GI growth. Within two years of acquisition by Webster Equity Partners, One GI's number of physicians more than quadrupled, and its geographic footprint expanded to include practices in six different states.
4. "Early studies suggest patients will face increased costs," the study authors said, adding that "PE ownership could lead to increased costs for patients and health insurers, and increased revenues and thus profits to owners, which could imply that PE-backed practices are a net negative for society."
5. There was a decline in PE deals in 2023 — gastroenterology also saw a decrease in private equity deals, with 13 deals in 2023, compared to 26 deals in 2022, indicating a larger decline in PE healthcare deals.