Private equity has touched nearly every corner of healthcare from cardiovascular to orthopedics, but does it have a place in gastroenterology?
Robbie Allen, CEO of One GI, recently connected with Becker's to discuss what role private equity should play in gastroenterology.
Note: This response has been lightly edited for length and clarity.
Robbie Allen: It's always a loaded question, because not all private equity is the same. Just like not all hospital systems are the same. So when somebody says, "Oh, I hate working for the hospital." It depends on the hospital system. There are plenty of providers who work for hospital systems when it's well matched that love their hospital network. Same with private equity.
Private equity certainly has made mincemeat of a few different industries and healthcare. I think they, by and large, have done a decent job in GI. They've brought focus to a really fragmented specialty. GI is historically skewed very independent, there are very few large mega groups. The money that's being focused and put in by private equity tends to drive the private equity style model of improving the industry, which is to focus on three, maybe four, things over a period of three or four years, and really drive value on those things with a very conscious effort, which tends to sharpen the tools. It can force and accelerate changes that are already happening in healthcare and I think, by and large, that's what it's done. There's no question it's here.
Historically, the doctors are the one leg of a three legged table that's been the weakest. When you think about healthcare in general and physician services, you have health systems and hospitals, insurance companies, and then you have physicians. It's not rocket science to say that the smallest weakest leg of that triad has definitely historically been the physicians. So what you're seeing with this consolidation is that the third leg is becoming a co-equal participant in the discussion. That can benefit everybody. You don't want a lopsided equation.