Becker's ASC Review

7 ASC MANAGEMENT Private equity turns to cardiology after courting ASCs for years By Patsy Newitt P rivate equity firms have long used ASCs as investment vehicles, and aer courting key ASC specialties like gastroenterology, orthopedics and ophthalmology, they could be looking to cardiology as a new area of growth. "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 in January. "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." It is estimated that the U.S. cardiovascular market size sits around $50 billion, according to a May 2 report from JD Supra. Additionally, Medicare is rapidly approving additional cardiac procedures at ASCs. By the mid 2020s, 30 to 35 percent of cardiology procedures are expected to occur in the ASC setting. Cardiology is in the earliest stages of consolidation, with private equity just starting to play a major role, meaning there could be a huge opportunity for growth. Earlier in 2023, Florida-based private equity firm Viper Partners opened a mergers and acquisitions department focused on deals in the cardiology space. 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. Most recently, Richmond, Va.-based James River Cardiology partnered with private equity firm RC Capital to form Aligned Cardiovascular Partners. 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. Philip Blair, CEO of Surgery Center Services of America, called outpatient cardiology a "gold rush," particularly in states like California, Ohio, New York and Pennsylvania that allow ASCs with catheterizations to be owned by a physician. As cardiology continues to evolve and the population continues to age, both ASCs and private equity could see huge growth in the cardiology sector. "e biggest opportunities for ASC growth currently are for cardiac clinics," Sandra Roush, BSN, RN, director of nursing at Salem, Ore.- based Pacific Cardiovascular Surgery Center, told Becker's. "At Pacific Cardiovascular Surgery Center, we provide surgical procedures such as cardiac catheterization, stent placements and pacemaker implants in a safe environment that is preferred by the patients to the large local hospital. Benefits of ASCs include more personalized nursing care, faster admission and discharge, timely procedures, significant cost savings and great parking." n Meet the surgeon suing North Carolina over certificate-of-need policy By Patsy Newitt O phthalmologist Jay Singleton, MD, who owns an ophthalmology practice in New Bern, N.C., is challenging the state's certificate-of-need laws in a suit that says he can't perform procedures at his ASC. Under current law, Dr. Singleton can only perform an "incidental" number of surgeries at the center. He must instead perform procedures at nearby hospital CarolinaEast, which charges substantially more per procedure for patients, according to court documents shared with Becker's. Dr. Singleton also can't begin the certificate-of-need application process because state regulations have determined that the community doesn't need another center, according to a news release from the Institute of Justice. Dr. Singleton sued North Carolina in April 2020. The North Carolina Court of Appeals unanimously dismissed a surgeon's challenge to the state's certificate of need laws but the case is now pending before the North Carolina Supreme Court, Jaimie Cavanaugh, an attorney at the Institute of Justice told Becker's. State treasurer Dale Folwell has filed a brief in support of reforming certificate-of-need laws in the state. "Certificate-of-need laws contribute to consolidated healthcare monopolies in North Carolina by distorting market power in favor of large institutional hospitals," he said in the brief. "This illegal distortion of market power then results in higher prices, lower quality, and less availability of healthcare services. In turn, large institutional hospitals create incredible excess revenue while failing to earn their tax-exempt status through the provision of charity care and engage in business practices harmful to North Carolinians." n

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