Private equity investment has planted roots in the healthcare space, buying private practices and growing consolidated platforms.
Reception to the trend has been mixed, with some physicians embracing the opportunities and others saying they are skeptical about leaving their practice in the hands of venture capital.
Here is what physicians in four specialties told Becker's about the trend.
"The one thing which I'm very happy about, thank God, is private equity," said Rajiv Sharma, MD, owner of Terre Haute, Ind.-based Digestive Health Associates. "Thank God. 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.
"[Private equity] lets you be a doctor and gives you the fuel, right? It's like rocket fuel for your career."
"[Something] that's interesting to watch right now is private-equity groups are starting to buy more and more practices and developing megagroups," said James Chappuis, MD, founder of Spine Center Atlanta. "I think eventually they're going to be in direct competition with hospitals because they're buying practices and surgery centers. So we're starting to see a dichotomous healthcare system developing the vertically integrated hospital-based systems and then the more private practices that are getting purchased by private equity groups and consolidating. I think we're going to see more and more of that."
"I would never sell, because nobody gets it," said Ali Sadrieh, DPM, founder and owner of Los Angeles-based Evo Advanced Foot Surgery. "I think there's a moral obligation for every doctor not to sell. I don't care what the brand is, none of these companies get it. At the end of the day, they're driven by spreadsheets. Why is it OK to treat patients with spreadsheets? This isn't a retail operation. No practice should be.
"Private equity doesn't understand excellence in quality. That's why private equity is broken.
"I'll sell my equipment to companies, but I'm not going to sell [my practice] to an institution or a brand."
"My ASC was gained at great time and cost because this is a wretched certificate of need state," said Eugene Cherny, MD, owner of Des Moines, Iowa-based Heartland Plastic Surgery. "I would certainly sell to the highest bidder. At the moment, we are keeping it in my practice because the ASC gives incredible added value to the practice. This is a time when venture capital is getting interested in aesthetic practices as well. We foresee only future growth in value of an ASC, especially in CON states."