Private equity's place in gastroenterology: 3 physicians' viewpoints

The amount of private equity gastrointestinal groups grew to 68 percent last year and is projected to expand throughout 2022, according to a report jointly published by consulting firm Fraser Healthcare and pharma research firm Spherix Global Insights.

Here is what three gastroenterologists said about this trend:

Editor's note: These responses were edited lightly for clarity and brevity.

Ray Keate, MD. Assistant professor of medicine at VCU Health (Richmond, Va.): I think it's a big uncertainty. The concern is that it's a good thing if it works and provides more capital and higher reimbursement. But it's a bad thing if the sale to private equity discourages younger people from joining those same groups. There's a differential compensation or value in the people that have already sold out to private equity and the new people coming in.

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Rami Abbass, MD. Gastroenterologist at University Hospitals (Mentor, Ohio): This trend has seen growing momentum in the past five years. The field presents an attractive [private equity] target, as a significant portion of gastroenterologists remain in independent practices with ownership in ambulatory endoscopy centers. The growing regulatory environment, high cost of capital, administrative burdens and challenges of partner recruitment have made private equity attractive to some practices.

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Rajiv Sharma, MD. Owner of Digestive Health Associates (Terre Haute, Ind.): Oh my God, private equity was perfect for me. Now I have access to capital, right? One thing which always bothered me was for GIs and other practices, unlike other businesses, we really don't have very clear legacy planning. Normally you'll have a nice doctor who will come to an area, live there for 20 or 30 years, scope half the town, and then when they're done, they close up shop and they go. That's a wasted opportunity to: A, pass on a legacy; and B, cash in the equity and the goodwill of the practice. I'd be losing time and money both. I cannot do that. I want to cash in on my equity.

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