The tortoise & the hare: Why United Digestive is taking a slow and steady approach to growth

Despite growing at a slower pace than other private equity-backed gastroenterology platforms, Atlanta-based United Digestive is focused on growing its infrastructure to capitalize on future investment.

Mark Gilreath, CEO of United Digestive, and Neal C. Patel, MD, chief strategy officer of United Digestive, discussed the platform and its future prospects with Becker's ASC Review.

Note: Responses were edited for style and content.

Question: Since your December 2018 formation, what has changed at United Digestive?

Mark Gilreath: Our singular mission is to empower and support the independent gastroenterologists so they can provide world-class patient care. Over the past two years, we invested in the implementation of new technologies, enhancement of existing processes, and, most importantly, we invested in our people. Throughout all levels of our organization, we embraced a dyad leadership model in which clinical and business leaders are partnered and learning from each other. The most notable example would be with the appointments of two new physician leaders to our executive team: Dr. Neal C. Patel as chief strategy officer and John Suh, MD, as chief medical officer.

This structure and shared insight have allowed us to accomplish quite a bit in such a short time. Specifically, we have expanded our ASC and infusion service lines, leveraged best-in-class vendor pricing, improved payer relations, insourced global pathology, laid the groundwork for insourcing anesthesia, welcomed new associate physicians, and expanded through mergers and acquisitions. All of these growth initiatives have contributed to improved patient care while driving shareholder value and physician income appreciation.

Question: How does UD plan to compete with larger platforms, especially now that more are emerging around the U.S.?

Dr. Neal Patel: From the beginning, United Digestive has not been competing to be the fastest growing platform out there. Instead, our vision has been to make sound and strategic business decisions that both strengthen our organization and add long-term value for our shareholders. There are many other opportunities for growth outside of M&A. As independent groups look to join a GI management services organization, they will notice key differences with regards to decision-making, integration and physician compensation. We strongly believe that United Digestive is unique in our collaborative culture, emphasis on building efficiencies, and ability to deliver value over the long term. Overall, we applaud the growth of GI MSOs as they strive to improve the quality of healthcare delivery to patients across the country.

Q: Has staying local to the Georgia area benefited you? How so?

NP: Absolutely. By initially keeping closer to home, United Digestive has been able to stay focused on creating an integrated business with clear value propositions to the independent GI. Ultimately, this disciplined approach has led to significant organic growth, which is most accretive for both our current and future shareholders. Today, we have an integrated platform with over 140 providers on a common EHR, supported by a centralized back-office team of professionals (including IT, HR, finance and patient call center) and optimized by powerful business intelligence analytics.

This strategy has resulted in an incredible foundation for continued growth and additional physician partnerships in Georgia, the Southeast and nationwide. Currently, we are very excited about our robust pipeline of future partnerships as more and more groups see the value of our uniquely positioned platform.

Q: 2021 is looking to be a banner year for investment with heavy activity. What do you believe is in store for the year?

NP: I would propose 2019 and 2020 were also banner years of investment activity in GI, and yes, 2021 will continue with that trend at a more rapid pace. Investment strategies take many forms and M&A partnerships are just one type, albeit the most publicized. Outside of M&A, United Digestive has also invested millions into its platform to create a scalable infrastructure and generate sustainable organic growth.

Q: Three years down the road, do the platforms start to consolidate, and what form will PE-backed GI look like then?

MG: If the historical trends of most specialties hold true within the GI space, there will likely be more platforms in existence than we have today. Although the various GI platforms will have some commonalities, it will become increasingly clear that they have differing visions and growth strategies. When these foundational tenets match, it's likely there will be some consolidation among existing platforms. Regardless, private equity supported management service organizations have clearly resonated with independent gastroenterologists and will continue to expand.

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