A new world awaits us all


July is typically the month when new students/physicians arrive at academic medical centers, schools, and hospitals to begin the next phase of training. July also marks the beginning of practice for graduating fellows. In the post-COVID world, these settings will have changed dramatically from the past.

Dr. John I. Allen, professor of medicine, department of gastroenterology and hepatology, University of Michigan, Ann Arbor, and Editor in Chief of GI & Hepatology News

Dr. John I. Allen

Community practices are consolidating rapidly, with many being acquired by private equity firms, hospitals, and health systems. Private equity made its first investment in GI in 2016, when Audax acquired Miami-based Gastro Health. It was announced this past May that Audax sold Gastro Health to Omers (a larger, Canadian PE firm), marking the first PE sale of a practice (second bite) (Newitt P. “Gastro Health sold to private equity company.” Becker’s GI & Endoscopy. 2021 May 19). The financial success of this model has not been lost on any community practice, so expect more such transactions.

Health systems are bouncing back from 2020, with balance sheets that are recovering quickly. But operating margins are still narrow so physician productivity is being pushed and burnout is a hot-button issue. Older workers are retiring at increasing rates, and low-wage workers are often reluctant to return to the workforce. Both trends increase Medicare and Medicaid rolls. As more patients enter government insurance programs, provider reimbursement falls. “Manage to Medicare” (bringing costs down to levels that are sustainable on Medicare rates) has again become a common goal. The historic reaction to these financial pressures has been to push commercial rates higher thru market consolidation and emphasize margin-producing services.

COVID has changed medicine. We will deliver care differently, and health inequities inherent in the current system will not be tolerable. We now can analyze population-level health outcomes by mining data from enormous databases containing both administrative and health records. Imagine the information we could derive by analyzing IBD populations scattered across multiple states, all cared for by 1,000 gastroenterologists working in a mega practice that uses a single electronic medical record. That might break down the town-gown barrier quickly.

John I. Allen, MD, MBA, AGAF
Editor in Chief

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