2021 GI Outlook (GO) Conference | November 2021-Consolidation in the Healthcare Ecosystem and How It Impacts Gastroenterology

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In this document, Scott Fraser discusses consolidation trends in the healthcare industry, specifically focusing on the gastroenterology field. He identifies various market forces driving consolidation, including payor consolidation, hospital consolidation, pharmaceutical industry consolidation, and med-tech device consolidation.<br /><br />Fraser highlights the missing providers in the healthcare ecosystem, such as financial challenges, contracting and rate cuts, administrative burdens, and recruitment and retention issues. He notes that private gastroenterology practices are facing stressors due to the entry of large institutional funds with significant capital and data resources.<br /><br />The author explains the investment thesis of private equity firms in the consolidation process, including leveraging regional density, scaling through MSOs (Management Services Organizations), and eventual exits through selling to the next private equity firm or going public.<br /><br />Fraser emphasizes the early innings of gastroenterology consolidation, supported by survey data that shows a 75% increase in gastroenterologists considering joining an MSO. He delves into the considerations for gastroenterologists when choosing an MSO, including local market conditions, pressure points, leadership, autonomy, transaction value, transparency, and data analytics.<br /><br />The author presents a case study sponsored by Frazier Healthcare, where investment in new leadership, technology, and data analytics resulted in lower operational costs and increased profitability for the practice and ambulatory surgical centers (ASCs). He emphasizes the advantages of data analytics and operational savings in MSOs.<br /><br />In conclusion, Fraser highlights the inevitability of consolidation in the gastroenterology field and quotes George R.R. Martin's phrase "Winter is coming," adapting it to say "Consolidation is coming."

Asset Subtitle

Scott Fraser MBA

Keywords

consolidation trends

gastroenterology field

market forces

payor consolidation

hospital consolidation

pharmaceutical industry consolidation

med-tech device consolidation

private equity firms

data analytics

ambulatory surgical centers