On this episode of The Scope With Dr. K, Dr. Kosinski sits down with Dr. James Leavitt, a founder of Gastro Health and the “father of private equity in gastroenterology,” for an update on private equity in GI.
Gastro Health started in the early 90s as a four-physician practice. Its first two decades were marked by steady organic growth and mergers. But the practice hit a tipping point in 2014: They wanted to do more, faster, and they needed to invest in the analytics and IT infrastructure to make it happen. That same year, Dr. Leavitt went to his first private equity conference and the rest is history. In just 24 months, Gastro Health took the idea from concept to implementation, becoming the first GI practice to engage with private equity.
Since then, Gastro Health has scaled nationwide and moved on to its second round of funding. Other GI practices are also following suit. Dr. Leavitt believes the GI space will likely continue to see investment activity, especially if physicians want to stay competitive in an industry of giants like Optum, CVS and Aetna.
“If we don’t consolidate, who’s going to advocate for patients better than us? Nobody,” Dr. Leavitt said. “Consolidation is what we need to do so that we can have the capabilities that will allow us to thrive, survive and lead healthcare reform.”