Gary W. Herschman and Anjana D. Patel, Members of the Firm in the Health Care and Life Sciences practice, in the firm’s Newark and New York offices, co-authored an article in Healio, titled “How to Look at Private Equity Investment in Physician Groups: Gastroenterology.” Investment banking analyst Abe M'Bodj of Provident Healthcare Partners also co-authored.

Following is an excerpt:

Gastroenterology represents a newer area of interest from the private equity community as the sector shares many of the same market dynamics that are driving investment activity in other physician specialties, including: favorable demographic trends, increasing outpatient procedural volumes, and market fragmentation. The first private equity transaction within gastroenterology was completed in 2016 by South Florida-based Gastro Health in its recapitalization with Audax Group.

Gastroenterology has strong macroeconomic tailwinds that will drive future growth within the sector. The population of U.S. citizens over the age of 65 is expected to more than double from 35 million in 2000 to 71.5 million by the year 2030. Per the American Cancer Society, colorectal cancer is the third most common cancer diagnosed in both sexes, with an estimated 135,430 new cases expected in 2017; it is estimated that 90% of these cases will occur in those aged 50 or older.

Additionally, the cost containment efforts by payors and hospitals have significantly driven demand for outpatient surgical care. Procedures performed in the ambulatory setting are both more cost efficient and satisfying to the patient population. Between 1993 and 2014, the ratio of outpatient to inpatient procedural volume increased from 55% to 66%, with gastrointestinal cases representing approximately a quarter of all ASC procedures performed.

Jump to Page

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.