Private equity is driving cases to ASCs — and cardiology could be primed for growth

Private equity's interest in ASCs and physicians over the last decade has helped spur a migration of procedures to the outpatient setting, and cardiology could be the next target. 

"2023 is going to be an interesting year for ASCs. On one hand, the financial climate of high interest rates can potentially limit the borrowing power of firms, which can present capital challenges," Neal Kaushal, MD, chief of gastroenterology and chair of the department of medicine at Roseville, Calif.-based Adventist Health, told Becker's. "On the other hand, private equity has gained such a strong foothold in this area that I do not see this slowing down anytime soon, despite short-term economic changes in the markets."

Private equity's footprint in healthcare is rapidly expanding — the value of healthcare private equity deals in 2021 was 378 percent higher than that of 2012.

After years of courting gastroenterology and orthopedic groups, cardiology could be the next target for private equity.

Florida-based private equity firm Viper Partners is opening a mergers and acquisitions department focused on deals in the cardiology space. Viper has completed more than $4 billion in deals outside of the cardiology space and now has several surgical cardiology and subspecialty groups under contract. 

Additionally, Houma, La.-based Cardiovascular Institute of the South partnered with private equity firm Lee Equity Partners to launch a national platform called Cardiovascular Logistics. Cardiovascular Logistics aims to build a network of cardiovascular practices across the U.S. and help the Cardiovascular Institute of the South to expand its national presence.

Cardiology is a growing platform for a variety of reasons. Viper said it plans to enter the industry due to a low concentration of private equity in cardiology, the nation's aging population and changes to Medicare and Medicaid rules.

Cardiology procedures received the highest estimated Medicare payment increases in 2021, making it the fastest growing ASC specialty, according to Avanza's "2022 Key ASC Benchmarks and Industry Figures" report. A 2020 Bain & Co. report projected that by the mid-2020s, 33 percent of cardiology procedures will be performed in ASCs, a 23 percent increase from 2018. 

As private equity continues to look to cardiology, ASCs could see growth opportunities in investing in cardiology lines. 

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