Issue link: https://beckershealthcare.uberflip.com/i/1199058
37 GASTROENTEROLOGY United Digestive makes 1st acquisition since formation — 3 insights By Eric Oliver Atlanta-based United Digestive partnered with Savannah, Ga.-based Center for Digestive & Liver Health. What you should know: 1. CDLH was formed more than 25 years ago. The practice has three clinics and one endoscopy center. The CDLH care team has 10 physicians and four advanced practice providers. 2. CDLH co-founder Edward Rydzak, MD, said the partnership will reduce the administrative burden placed on the practice. He said, "We are excited to be part of a quality-driven organization that brings not only great operational support and resources for our team, but also ensures its physicians maintain control of decisions related to patient care." 3. United Digestive was formed in December 2018 when private equity firm Frazier Healthcare Partners entered into a deal with Atlanta Gastroenterology Associates. This is the platform's first deal since it was formed. n Why Arizona Digestive Health joined the GI Alliance By Eric Oliver D allas-based GI Alliance, led by Presi- dent Jim Weber, MD, has aggressively expanded since first closing its deal with Waud Capital Partners, recently acquir- ing Phoenix-based Arizona Digestive Health. ADH President Paul J. Berggreen, MD, elaborated on why his practice joined the private equity-backed GI Alliance in Dallas and why he became the Alliance's chief strategy officer. Note: Responses were edited for style and content. Question: What drew ADH to part- ner with the GI Alliance? Dr. Paul Berggreen: We had been keeping a close eye on the national scene, seeing: consoli- dation among payers and hospital systems, increased regulation among the government, and hospital surgical care getting more special- ized. We were looking at this and saying, "Well, we have market strength in Phoenix, but we're probably not taking advantage of the opportu- nities that are out there." We'd been members of the national orga- nization of Digestive Health Physicians Association for years. … I knew Dr. Weber through that for a long time, and we talked about private equity. I was initially skeptical of the process, and then about two years ago I started to really look into it very carefully and attempted to understand more about it. I always thought there was a benefit to becoming bonded as a national group if certain precautions could be taken to make sure we didn't lose autonomy and didn't become part of this big corporate machine. I wanted to make sure we had the emphasis where it had to be, which was patients first and practices second. We were interested in a partner that could do that, and it took a lot of time and effort to assure that. What Jim Weber put together with the GI Al- liance was very compelling. I had him come up to Phoenix several times, and I've been out to Dallas several times. We really talked and got to know what it was he put together, and when we really got into it, it was like he checked all these boxes. He has physi- cian autonomy, he has an emphasis on the patients. He wants the practices controlled at a local level so that everything stays the same. It functions like a normal practice but with some of the benefits of a national presence. Q: What does the GI Alliance offer that other platforms didn't? PB: ere were three platforms when we started our process. ere's the Atlanta platform, the Miami platform and GIA. ere are now a couple more smaller platforms. We had looked at the structure of the others, but didn't get too far down the road with them. What I was hearing was that people kept say- ing, 'autonomy, autonomy,' but when you start- ed exploring the issue, we found people meant different things when they said autonomy. I explored the governance structure of GIA and looked at every level of decision-making and said, "Who has the control here?" When it came down to it, GIA gave the vast majority of decision-making to practicing gastroenterologists and was the only platform that's led by a practicing gastroenterologist. Q. What's the ultimate vision for the GI Alliance? With three partner- ships established to date, are more in store? PB: We have a lot of deep personal connec- tions across the entire country. We're also looking at smaller practices in metro areas or smaller towns. We're interested in groups with four, six or eight physicians too. ese people are good doctors in different markets who could benefit by being part of a larger organization. ese smaller groups are very appealing to us because they're typically composed of hardworking GI docs that want to do progressive things with their practice. Sometimes when it's just four physicians and an office manager, it's hard to talk big picture accomplishments with them. ey're busy seeing 25 to 30 patients a day. It's just not feasible, but when you have that backbone of the GIA, suddenly these things become doable. Q: Speaking to the industry in gen- eral, do you expect more PE-backed deals moving forward? How much consolidation can the industry sup- port? PB: I looked at another specialty to help answer that, ophthalmology. In 2016, there were three ophthalmology platforms; in 2019, there are 16 of them. I think there will be more of that in GI, but I think GI is a little bit different. It started off with one platform in 2016, then in 2018 there were two other platforms. ese were respected groups, but the way that Jim has put together the GI Alliance is so appealing, it went from 145 physicians initially — which was just Dr. Weber's practice, Southlake-based Texas Digestive Disease Consultants — and we're now at 277 physicians and that number is going to balloon in the next 12 months, and I do mean balloon. e reason? It's just ap- pealing. It's just downright appealing. n