Category: Industry Updates

10 Jan 2020

What private equity has in store for GI in 2020

Gastroenterology investment dominated the specialty in 2019, with no signs of slowing down in 2020.
Here, NextServices President and Co-founder Praveen Suthrum examined the current PE landscape in GI and offered insights into the future.
Note: Responses were edited for style and content.
Question: How will the four established (and fifth possible) PE-backed platforms coexist and continue to acquire practices?
Praveen Suthrum: Initially, platforms tended to be regional first and national afterwards. In 2019, we saw a few national deals. The PE platform in Texas [the GI Alliance] acquired a group in Illinois. The PE platform in Florida [Gastro Health] acquired a group in Washington. Newer platforms [like US Digestive Health] will tend to consolidate practices in their home region first.
However, that doesn’t stop conversations from happening across states. When a large or midsize practice puts itself in the market, it attracts bids from everyone. Investment banks will approach all the platforms on behalf of their clients to attract the best bids or determine strategic fits.
Through 2020, we will see merger and acquisition announcements of various mid-size or large GI practices. The PE platforms will compete to acquire and expand. And newer PE platforms will form in other regions.
Q: Three years down the road, what does the GI space look like?
PS: Three years down the road, we will see between eight and 11 PE and strategic platforms. We will see a significant portion of large and midsize GI practices consolidated into PE platforms or into alternative strategic platforms, like the one created by Jamison, Pa.-based Physicians Endoscopy and Silver Springs, Md.-based Capital Digestive Care.
Other players like Nashville, Tenn.-based AmSurg might come up with their own offerings. Companies like Eden Prairie, Minn.-based OptumCare might acquire a few GI practices. We will also see multi-specialty deals. Certain health systems will build GI divisions and acquire or partner with GI practices in their area. Some of these deals might fail, we just don’t know which ones.
We will begin to see [PE firms exit] around 2022-23 when some platforms will move onto the “second bite” of the apple. Newer PE players will enter the market, but overall the net result will [lead to] larger, consolidated GI practices.
Other trends will play out, such as stool DNA testing becoming more common. Screening colonoscopy will increasingly become a lab test, and endoscopies will be more about diagnostic colonoscopy. Artificial intelligence-based endoscopy will become available [which will help] GI doctors increase [polyp] detection. These technology trends will also accelerate business consolidation, because GI practices will see the advantages of getting bigger and more sophisticated.
Q: How many deals do you expect to close in 2019?
PS: There are at least 16-20 deals in the works at various stages right now. Closing deals before the end of the year could have certain financial advantages. For example, if the valuation of the PE platform increases in January, then the practices joining the fold now will benefit from that upside.
Q: Do you believe this level of consolidation is good for GI?
PS: Consolidation is inevitable and it’s not unique to GI. Large aggregators such as CVS and UnitedHealth Group create a trickle down effect across the spectrum. The entire healthcare industry is consolidating.
When hospitals in a certain region organize themselves to become larger health systems, it creates a risk for independent practices by impacting the referral network. In this environment, the consolidation of GI practices is necessary to remain independent for the future. The question is not whether consolidation is good or bad for GI. The question we must ask is how we make things better for GI.
In the 1990s, physician practice management companies tried to consolidate medicine. The reasons were similar — fragmentation, better contracts and so on. But PPMs failed badly, and it left a lot of debris. As the industry consolidates again, we must learn from the past and aim to do it right this time. Getting PE in GI wrong could have too high of a cost.


Written by Eric Oliver | December 23, 2019  |  Originally published on Becker’s GI & Endoscopy

Our new book Private Equity in Gastroenterology – Navigating the Next Wave is still available for download. Here was the best compliment we got to date: “I need my entire board to read this!”
18 Nov 2019

Cologuard® plans to capture 40% market share. 21 takeaways from Exact Sciences Q3 Earnings Call

Did you listen to the latest quarterly earnings call of Exact Sciences on October 29th? It was insightful.
In Q3 2019, Exact Sciences screened 456,000 people with Cologuard® with over $290 million in revenues. In the last five years, the company screened more than 3 million people.
They are now ready to capture at least 40% of the US colorectal cancer screening market (currently they are at 5%).
These notes are based on remarks by Exact Sciences Chairman and CEO, Kevin Conroy, the Chief Financial Officer, Jeff Elliott and President of Cologuard®, Mark Stenhouse.
21 Takeaways from Exact Sciences Q3 Earnings Call
1. Three priorities for 2019:

Powering Pfizer partnership

Enhancing Cologuard®

Blood based cancer diagnostic test

2. Over 180,000 physicians have ordered the Cologuard® test thus far. Over 3 million patients (456,000 people in Q3 alone) have been screened. New facility has capacity to screen 7 million patients per year.
3. Together with Genomic Health (acquisition in 2019), the company’s addressable market is $20 billion.
4. $35 million invested in R&D for pipeline projects:

Cologuard for age 45 and above

Cologuard 2.0

Liver cancer test

5. Exact Sciences sees “a clear path to Cologuard® cost per test of $100 or better.”
6. Last month, the FDA approved their label expansion providing access to Cologuard® for 19 million average risk unscreened Americans from ages 45 to 49.
7. Several national and regional payors lowered their coverage screening age for Cologuard® to 45 years, following the American Cancer Society guidelines update last year, including Aetna, CareFirst and Blue Shield of California.
8. Exact Sciences implemented Epic’s health IT platform. They hope to enable electronic ordering for a greater share of customers.
9. At ACG 2019, the company presented data on Cologuard® to show a five-point increase in specificity with new markers (92%), while maintaining similar level of sensitivity.
10. To validate the performance of an enhanced version of Cologuard®, the company initiated BLUE-C, a prospective trial.
11. Along with Mayo Clinic, the company initiated a 7-year, 150,000 patients prospective study called Voyage to evaluate Cologuard®’s impact on screening.
12.  The company will be presenting data at the Americans Association for the study of Liver Diseases, demonstrating superior performance of their liver test compared to the alpha-fetoprotein test.
13.  The company gave in a broad comparison among colonoscopy, Cologuard® and the FIT test:

> Colonoscopy –  highly accurate but low patient-friendly test

> Cologuard® – high accuracy and high patient friendliness

> FIT test –  lower performance yet high ease of use of the patient’s part

14. The first time a blood-based cancer test would potentially be in the US Preventative Services Task Force guidelines would be in the 2026 to 2027 time-frame.
15. According to the company, 96% of Cologuard®’s patient population is able to receive Cologuard® without any cost share (i.e., a $0 co-pay).
16. The company said the re-screening business is a growing opportunity and would be a sizable business next year.
17. According to the company, 50% of people who get a Cologuard® test have never been screened before. With 19 million Americans in the 45 to 49 age group and about 35 million Americans in the older age group that have never been screened, this market is going to grow and it’s going to continue to grow at a steep pace.
18. To date, the company only captured about 5% of the addressable market (total available patients per physician). According to the company, there are about 300 patients on average per physician that could use Cologuard® today.
19. With electronic ordering, a physician orders an average at least 20% more than those on traditional fax orders.
20. A blood-based test is likely to model as an annual test and is likely to be priced at one-third of the cost of a Cologuard® test today.
21. The company is focused on bringing a lower-cost approach to market for people who refuse both Cologuard® and colonoscopy.
1) Exact Sciences Corp (EXAS) Q3 2019 Earnings Call Transcript (The Motley Fool)
2) Exact Sciences Investor Relations – Quarterly Results
3) Exact Sciences Third-Quarter 2019 Earnings Call Presentation


By Praveen Suthrum, President & Co-Founder, NextServices. 

Our new book Private Equity in Gastroenterology – Navigating the Next Wave is still available for download. Here was the best compliment we got to date: “I need my entire board to read this!”
12 Nov 2019

GI consolidation in 2019: PE and other deals thus far

Towards the end of 2018, we saw two back-to-back PE platform announcements: The GI Alliance (by Texas Digestive Disease Consultants) and United Digestive (by Atlanta Gastroenterology Associates). That seemed to have laid the ground for deals in 2019.
2019 was a busy year for GI consolidation. Sometimes we don’t realize the pace of activity unless we look at it all at once. Download the infographic to view GI consolidation from 2016 until end of 2019 all at once.


Here’s the list:
February 2019: Gastro Health acquiring Gastroenterology Specialists, continuing Florida expansion efforts — 4 insights (Becker’s ASC)
April 2019: Birmingham health group acquired by Miami-based Gastro Health (Birmingham Business Journal)
May 2019: $130M private equity deal to unite 3 GI practices, create 7th largest group in US (Becker’s ASC) – * 4th PE-funded GI platform
July 2019: Illinois Gastroenterology Group joins the GI Alliance (PR Newswire) 
July 2019: Covenant partners with Arizona specialty clinics (Nashville Post) 
August 2019: Physicians Endoscopy, Capital Digestive Care team up to create management platform (Becker’s ASC) – * Alternative to PE funded platforms
September 2019: GI Alliance partners with Southeast Texas Gastroenterology Associates — 4 insights (Becker’s ASC)
September 2019: Gastro Health acquires Puget Sound Gastroenterology, a premier provider serving the Seattle area (Yahoo Finance) 
October 2019: Arizona Digestive Health joins GI Alliance (PR Newswire) 
October 2019: GI Alliance forms 2 partnerships in 5 days — Adds Texas GI partner (Becker’s ASC) 
November 2019: Indianapolis Gastroenterology and Hepatology joins GI Alliance (PR Newswire) 
November 2019: United Digestive expands in Georgia, partners with the Center for Digestive & Liver Health (Business Wire)
November 2019: GI Alliance partners with Amarillo Endoscopy Center — 3 insights (Becker’s GI & Endoscopy)
November 2019: Gastro Health establishes platform for growth in the Mid-Atlantic through acquisition of Gastroenterology Associates of Northern Virginia (Gasto Health website)
December 2019: Peak Gastroenterology acquired by Varsity Healthcare Partners — 4 insights (Becker’s GI & Endoscopy)
December 2019: GI Alliance expands into a 6th state with GastroArkansas (GI Alliance website)
December 2019: GI Alliance acquired Lubbock Digestive Disease Associates and South Plains Endoscopy Center, further expanding its presence in Texas (Becker’s GI & Endoscopy)
Expect more announcements in the coming weeks and months. My sources tell me there are at least 16-20 deals in the works.


By Praveen Suthrum, President & Co-Founder, NextServices. 

Our new book Private Equity in Gastroenterology – Navigating the Next Wave is still available for download. Here was the best compliment we got to date: “I need my entire board to read this!”
13 Aug 2019

43 Takeaways from GI Outlook 2019 (plus bonus insights)

We were recently at the GI Outlook 2019 conference in LA. As with GI Roundtable, the conference attracts GI leaders interested in the business of gastroenterology.
Topics and discussions gave plenty of insights of what concerns the GI industry at this time. Big insurances. Private equity. Colonoscopy. Private equity. Burnout. Private equity. MSOs. Did I mention private equity?
Just the week leading up to GI Outlook, there were two big industry announcements. Illinois Gastroenterology joined The GI Alliance (started by Texas Digestive Disease Consultants with investment from Waud Capital). Physicians Endoscopy and Capital Digestive Care announced a MSO platform.
I couldn’t attend all sessions because we had a busy time. But I still managed to pause and capture 43 takeaways and then some. Here they are.
1) James Weber, MD (Texas Digestive Disease Consultants): When we were 60 doctors, we still didn’t get the attention of big insurance companies. After we expanded to 100-200 doctors, they are reaching out to us.
2) James Robinson, PhD (UC Berkeley School of Public Health): Doctors have to give up their autonomy so that they get to keep their autonomy as a group.
3) Lawrence Kosinski, MD (Illinois Gastroenterology Group): There’s a hunger, they (big insurance companies) want us to do it (consolidate).
4) Jack Lewin, MD (Lewin and Associates): Questions to consider on the future of GI:
– Will solo GI be gone?
– Shared risk and revenue?
– Telemedicine and e-consulting
– Subspecialization
– Extender use
– AI and big data
– Microbiome
– Empowered patients
5) Jack Levin, MD: 3 key forces affecting health reform:
– scientific progress and demand for new and expensive services for aging population
– general economic factors
– politics on things
6) Ramya Raman (Medical Science Liaison, Exact Sciences): Cologuard 2.0 is in the works (early stages) – tests will be done with a blood sample, not a stool sample.
7) Abe M’Bodj (Provident Health Partners): The biggest risk for the large PE-funded platforms is that nearly half of the money they raised is leveraged debt. If the business doesn’t generate sufficient cashflows every year to pay the interest, bankruptcy could happen.
8) Abe M’Bodj: There have been 200 PE deals in ophthalmology, 20 of those are platform deals. With GI, we can expect to see at least 10 PE platform deals. At this point, there are at least 16 transactions underway, including acquisitions.
9) Lawrence Kosinski, MD: If all partners agree to take a 30% cut then you can use that money to sustain your independence (instead of raising money from PE). Now, try having that conversation with your partners.
10) Scott Ketover, MD (Minnesota Gastroenterology): (question to physicians during a session on burnout): Do you take a lunch break and not work during that time? (2 hands went up)
11) GastroHealth numbers: 140 physicians, 48 APPs, 69 locations, 891 teammates, 15 acquisitions.
12) Nexus Health Capital: Recent transactions/active engagements (investment bank):
Closed: Texas Digestive Disease Consultants
Impending close: inSite Digestive Healthcare (largest in CA)
Active engagements: Arizona Digestive Health (largest in AZ), GastroOne (largest in TN), Allied Digestive Heath (largest in NJ), Associates in Gastroenterology (largest in Nashville), Gastroenterology Health Partners (largest in KY, S. IN)
13) T.R. Levin, MD (The Permanente Medical Group): Value based health care will continue to grow to meet the IHI Triple Aim of Population Health, Experience of Care, and Per Capita Cost:
– Payment will reward quality over quantity
– Quality will directly impact reimbursement
– Population health management will increase
14) T.R. Levin, MD: Multi-Society Task Force: 2017 Guidelines for CRC screening
15) T.R. Levin, MD: Kaiser Permanente Northern California FIT outreach program:
1) PCP Pre-letter mailed
2) FIT Kit mailed
3) Robb-Call reminder
4) Reminder Postcard > Review prompt at office visit
5) Secure Message
6) MA calls
16) Impact of organized screening:
Screening up to date: screening eligible changed from 50% (2007) to 80% (2015)
Colonoscopy: screening eligible changed from 15% (2007) to 30% (2015)
FIT: screening eligible changed from 5% (2007) to 40% (2015)
17) T. R. Levin, MD: Guidelines for surveillance colonoscopy are being revised. Most likely outcome: colonoscopy intervals will be lengthened for 1-2 (possibly 3-4) small adenomas
18) Jack Lewin, MD: U.S. Health care is way too expensive and complicated:
$10,000 per capita per year in 2018
$22,000 per family per year in 2018
18+% of GDP
19) Nexus Health Capital: Need for scale/negotiating leverage:
– Lowered reimbursement risk
– Hospital competition pressures (employment of GIs and referral sources)
– Increasing infrastructure requirements to succeed with MIPS and Value-based care
– Many consolidators recruiting GIs at premium, competing for referrals, competing for preferred payor relationships
20) Nexus Health Capital: Favorable wealth creation environment:
– Premium values for top tier practices
– limited window to consolidate sectors and build platforms
– Shared wealth-creation goal with physicians
– Opportunity to maximize equity “upside”
21) Joseph Garcia (Gastro Health): Often times your EHR is different from your PM system. And your financial reporting system doesn’t talk to any other system. So we knew early on that as our business was scaling, we needed better dashboards. We’ve been using Microsoft Power BI and have been on the project for 1.5 years now.
22) Joseph Garcia: When you are acquiring practices, there’s a lot of scrutinizing of financial reports that goes on. So to keep doing that manually is tough.
23) Joseph Garcia: Dashboards can provide a ton of information from multiple teams. It provides visibility and ability to track. It goes into performance reviews. Brings about great efficiencies.
24) Joseph Garcia: To build dashboards, do the following:
– Identify what you need to run the practice (Data and KPIs)
– Conduct a gap analysis (current reporting vs required reporting)
– Evaluate – build vs buy strategy (outsourced RCM or data analytics vendors)
25) James Leavitt, MD (Gastro Health): What drives PE’s interest in healthcare?
– Dry power of $1.8 trillion
– Healthcare growing faster than GDP
– Healthcare outperformed other PE investment sectors
– Provider fragmentation, lack of professional management
– Create value by increasing efficiencies
– GI of interest because of diverse revenue streams
26) James Leavitt, MD: By affiliating with an MSO, physicians can take upfront value of future earnings.
27) James Leavitt, MD: With a PE structure, physicians can treat their practices as more than just an ATM. They can be part of a structure that creates real value and equity above and beyond the revenue they withdraw as salary from the practice.
28) James Leavitt, MD:
– Understand who you really are
– What is best strategy to meet your needs
– Not everyone is a platform or needs to be a platform
29) Joseph Vicari, MD (Rockford Gastroenterology Associates): With PE, we have to understand who has control of the commodity that we’ll become? Who and what drives decision making as we become a commodity? Will we still be patient advocates? Will we still put quality first? Or, will PE drive decision making? What happens if you don’t meet those 20% growth goals?
30) Joseph Vicari, MD: If we sold or resold, it’ll become like a mortgage. What does it mean for young partners and patients?
31) Joseph Vicari, MD: What happens if the growth of ancillaries stops? What happens if we treat IBD with oral medications and we don’t need infusion centers?
32) Joseph Vicari, MD: If this (PE) goes bad, how does this “unwind”? Who gets what? What happens to the physical structure? What happens to patient records? What happens to ancillaries? If this falls apart, will we truly look at it as a business? What happens to our patients? What happens to us as physicians?
33) Glenn Littenberg, MD (inSite Digestive Health Care): PE is not a cure for:
– disorganization
– a stagnant group that’s unable to grow
– payor pressure
– financing your kid’s tuition
– “kick a mule all you want, it’s still not a race horse!”
34) Glenn Littenberg, MD: people are willing to put in a lot of money into us and want to make a lot more money out of it.. what is that going to do to us or for us? And that’s probably the question
35) Glenn Littenberg, MD: meetings, meetings, meetings, phone calls, emails, more phone calls…
36) Glenn Littenberg, MD: Some physicians are not educated enough but will still come behind you because there’s lack of trust there often based on very inaccurate information, misconceptions on how this could work.
37) Glenn Littenberg, MD: If you are going to do this, you have to become focused, stay focused before, during, after the process.
38) Glenn Littenberg, MD: The question is will they respect you in the morning
39) Glenn Littenberg, MD: What’s the end game? Because second bite is not the final bite
40) James Weber, MD: We anticipate our next partner will be a larger private equity firm with a longer horizon. The third partner may be somebody like Optum or Apple or Google or Amazon or a bigger private equity firm.
41) James Leavitt, MD: There are different types of private equity firms. Lower middle market – start of with $10-20M EBITDA. They grow it from $10M to $50M EBITDA. That’s a 5 times growth. Then there’s the upper middle market – they’ll take it from $50M to $100M. For example, Mednax – they did a PE play and suddenly they were a billion dollar company. They didn’t have a private equity partner to go to and they went public. But that’s four bites down the road.
42) Lawrence R. Kosinski, MD
Major drives of healthcare business model change
– Cost containment (e.g. declining fee for service)
– Structural changes (e.g. Affordable Care Act)
– Consolidation (e.g. PE in GI)
– Demise of independent primary care (e.g. employment of PCPs)
– Disruptive technologies (e.g. EHRs, social media)
– Management of chronic disease (e.g. VCs in this space)
– Consumerism (e.g. patients taking on cost burden)
43) Lawrence Kosinski, MD
[It can’t be] a coincidence the burnout of physicians occurred at the same time as the EMR revolution. We sit there, we watch a screen with procedures, we watch a screen with patients – we are constantly getting hammered with that.
When I reflect on the entire conference, here’s what I finally took away:
1) GI is getting bigger faster. The structure of the industry is permanently changing. The industry is at the cusp of an exponential curve. We’ll see the hockey stick soon.
2) A very small portion of gastroenterologists comprehend these changes. It’ll take most of the industry by surprise. Most will respond based on emotion or hear-say or simply saying yes to whatever comes their way.
3) Plenty of disruption is underway (e.g. Cologuard 2.0) but we will be slow to recognize it. Dependency on colonoscopy reimbursements will be a big risk.
4) Technology will play a major role in shaping the future of gastroenterology.
5) GI practices will make less and less money from direct GI care. And more and more from ancillaries.
6) The need for GI care will keep increasing. How we finance and address that need will dramatically change.
Many summers ago, my buddies and I lost our way while boating in Lake Minnetonka in Minneapolis. It was fun! That lake freezes with over a foot of ice during winters when everything stands still.
GI is a bit like that lake right now. Back in summer, there were no rules. You could be solo or midsize or big. You could do anything you wanted. Life was more predictable.
But now, GI is advancing towards winter – when the ice freezes and rules are set. Once those rules are set, they stay that way for a long time.
Until of course a summer comes by and melts everything all over again.


By Praveen Suthrum, President & Co-Founder, NextServices. 

The views, information, or opinions expressed are solely those of the individuals involved and do not necessarily represent those of NextServices and its employees. All information is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained.

Our new book Private Equity in Gastroenterology – Navigating the Next Wave is still available for download. Here was the best compliment we got to date: “I need my entire board to read this!”
03 Jul 2019

Bigger market forces influencing M&A in gastroenterology: Consumer vs System

A PE fund recently wanted to pick my brains on their investment strategy. They found me through my book. It wasn’t just any investment strategy.
It was about finding their sweet spot in gastroenterology. How should they fit in? How should they stand out? Where’s everything going?
I suspect that by 2020, there will be a lot more investors making a beeline for gastroenterology investments. With more deal announcements (there have been 4 big ones), more investors and GI practices will start seeking out each other.
A ripple-effect is inevitable. Money is a powerful force.
Expect the market to heat up.
But M&A within gastroenterology is not occurring in isolation. Beyond common investor thesis (aging demographics, demand for GI, fragmentation of practices etc.), there are bigger market forces at play here.
To understand what’s happening at the CVS-Aetna level, I spoke to Sid Sahni, Chief Strategy and Corporate Development Officer, Prime Therapeutics. Sid, a friend of mine from Ross Michigan, was previously the VP of Enterprise Strategy of Aetna and VP of Market Strategy, CVS.
He helped me understand present market dynamics in very simple terms.
Healthcare is divided into two camps: Consumer vs System.
1) US healthcare continues to be plagued by big problems. We spend more and yet achieve lower outcomes.
2) There are two big aggregators in the country: CVS and UnitedHealth Group. Taking two different approaches to solve the same problem.
3) CVS is thinking, let’s cover all consumer touch points and influence patient behavior to solve the healthcare problem (Consumer).
4) UnitedHealth Group is thinking, let’s fix the system to solve the healthcare problem (System).
5) The rest of healthcare are variants under one of these two camps: Consumer vs System.
Read Sid’s insightful interview below. It’ll prime you for thoughtful decisions.

Interview with Sid Sahni, Prime Therapeutics
Chief Strategy and Corporate Development Officer, Prime Therapeutics, Minnesota
Former Vice President, Enterprise Strategy Aetna, Former Vice President, Market Strategy, CVS

1) What’s driving the present wave of changes in healthcare
If you think at a very high level, there continue to be problems that plague US healthcare. We spend more, yet our quality of life and outcomes are not comparable to countries that spend far less. The question to ask is why? There are three main reasons:
• There’s fundamental fragmentation in the industry. Different players owning different elements, with no alignment with each other. Even if a player wants to do something right, the incentives are misaligned.
• We work on the mindset of paying for activities versus outcomes. I performed a test or prescribed a drug, so I deserve to get paid. We do not pay for value created or results delivered. Not yet.
• US does subsidize innovation for the rest of the world. The fact is we do spend more here but the benefits are democratized over the rest of the world.
With this line of sight, see what two of the biggest aggregators in the country are doing: CVS Health and UnitedHealth Group. CVS has been taking the consumer route. They are thinking let’s cover all the touch points of patients to influence consumer behavior. Somewhere the benefits to the company will accrue if I focus on changing patient behavior.
United on the other hand is taking a system approach. They are thinking the system is out of whack, let’s fix that first. Let’s reduce costs of hospitals by moving care to clinics, outpatient centers. May be they are building a Kaiser of sorts – a closed system. Somewhere the benefits will accrue if I have the right system.
Most other players in healthcare are taking variants of one of these two approaches: consumer or system.
2) What about new entrants like Amazon?
Well, there are a third-set of players: Google, Amazon, Facebook and so on. They are saying, unlike traditional healthcare companies, we have the trust of the consumer. People are usually skeptical about the healthcare system. The tech companies are thinking you need a fresh approach that’s unconstrained by today’s problems. Insiders can’t fix this. That’s the genesis of the Amazon-Berkshire-Chase approach. It’s also that they see a lot of return on investment if done right. Power to them but I don’t yet see a coherent strategy.
3) When you take a 5-10 year horizon, how do you see the healthcare landscape change because of these changes?
I do think that alignment of incentives, vertical integration, a more closed-loop system will bring healthcare costs down. If you get people to change behavior and be more rational purchasers of healthcare (which is notoriously difficult), it can drive enormous change.
It’s not unthinkable that CVS merged with Aetna. It’s a strategy they’ve been considering for years. So Amazon might not have influenced things beyond a point. Insiders are to leave no entry point for the likes of Amazon.
For example, by partnering with FedEx, Walgreens is experimenting with same or next day delivery of prescriptions nationwide. CVS is piloting a program for delivery of medications to home for an annual $4.99 membership in the Boston area.
The likes of Amazon may bring fresh ideas that might benefit everybody. But they will likely need to work with industry players to implement any idea.
4) Where do you think consolidation amongst private practices lead to?
My contention is that regional consolidation is more beneficial to patient care than national consolidation. If a group in Texas merges with another in Washington, what good will come for a local patient?
When you remove the problems of fragmentation that exist in specialties like gastroenterology, you can unlock greater value. In the future, we may see consolidation of large gastroenterology groups with other specialties. Insurance companies keeping pushing risk down to the providers. One doctor may not be able to take a risk on a certain patient. But when put together with a group (primary care, oncology, pharmacy, social workers), the group may be able to assume greater risk and be accountable for the health of regional populations. It is one of the key ways we will make a transition from paying for services to rewarding for outcomes.
5) What do you think about PE-led consolidation that’s underway amongst private practices?
Essentially, their play seems to be that of bringing efficiency in operations. Even for a minute, I don’t doubt that there’s money to be saved and made. However, this approach reaches its limit reasonably quickly. At some point, you’ll finish consolidating billing, accounting, technology and so on. Then what? You are ultimately always looking out for exit multiples. You aren’t solving fundamental problems with a long-term view. You’ll get some runway but that’s not enough for healthcare. The PE-view is completely different from the approach that someone like Amazon-Berkshire-Chase is taking. Perhaps, you need both approaches to solve our problems in healthcare: remove inefficiencies and innovate.
6) What should practices that are consolidating watch out for?
Just because you bring two entities together financially, it’s a stretch to assume there’ll be a match. Don’t underestimate the role of culture. Culture can take a bite out of the success you want.


By Praveen Suthrum, President & Co-Founder, NextServices. 

Our new book Private Equity in Gastroenterology – Navigating the Next Wave is still available for download. Here was the best compliment we got to date: “I need my entire board to read this!”
19 Jun 2019

25 Takeaways from Eric Topol’s new book, Deep Medicine

Every once in awhile there comes a well-researched and clearly-written book that deserves to be read end-to-end. While Dr. Eric Topol’s Deep Medicine’s compass points to the future, the book’s heart is rooted in compassion and deep concern for patient care.

My printed copy has so many dog-ears that I’m simply going to list my takeaways for you – with a few comments (>>).

25 Takeaways from Deep Medicine
1) Delays in diagnosis or failure to spot a diagnosis account for a significant number of law suits. The underlying reason is poor chart documentation. AI tools (e.g. Ada, Your.MD, Babylon, Buoy Health) can help.
2) Crowdsourced diagnosis is an upcoming area. Figure One, Health Tap, DocCHIRP, Medscape Consult, CrowdMed (competitions) are some interesting examples. Human Dx has been used by 6,000 doctors and trainees. In the future, AI tools + crowdsourced diagnosis can be real aids for doctors.
>> Our medical knowledge is expanding and growing in complexity. ICD-10 diagnosis codes are 150,000 in number. It’ll soon be impossible for doctors to see patients without the aid of technology.
3) Machine learning works best with raw data and lots of data. If there’s enough data, then the noise gets filtered out on its own.
>> If we take stock of ALL the electronic medical records circulating out there, we’ll notice that the majority is templated and not pertinent. Using that data to create algorithms is dangerous and possibly futile. But with more data, the machine can possible figure out what’s useful and what’s not.
4) AliveCor’s Kardia band is possibly the first FDA approved AI algorithm to help patients with self-diagnosis. It can help users detect atrial fibrillation.
5) Gary Kasparov said IBM’s Deep Blue “didn’t enjoy beating me”.
>> We vastly underestimate the role of human emotion (in this case the joy of competing) in our transactions with machines.
6) 4 areas where deep learning has made big impact already: games, images, voice and speech, and driverless cars.
7) If a doctor makes a medical mistake, it can result in one death or coma. If an AI makes a mistake, it could be devastating – possibly resulting in hundreds or thousands of deaths!
>> Imagine if an algorithm that determines drug dosages for a certain condition goes awry. It’ll be far, far worse than a clinician overdosing one patient.
8) Problem of using current genetic data as input for AI algorithms is recipe for trouble. Because most of the data is from people of European ancestry.
>> The problem is we don’t really have that much data from other ethnicities. So there’s a lot of room in the future to make these algorithms more relevant and accurate.
9) NHS used an app (Streams) that helped triage patients in 30 seconds vs up to 4 hours in the past.
10) The paradox of driverless cars. In the accident that occurred in 2018, the AI detected a pedestrian in the dark but didn’t stop and the human backup driver trusted the AI.
>> I hear this all the time with staff at medical sites: “The computer told me to do this” and they simply do it.
11) In healthcare, there’s scope for building algorithms that are unethical, channeling patient care in a certain direction based on insurance or income levels.
>> Think of someone at a hospital saying this: “the computer suggests that it’s better for you to get a stent placement. Do you want to go ahead?” The problem is a patient will almost never question who told the computer to suggest that and on what basis.
12) In an experiment, 83% of radiologists missed a man in a gorilla suit shaking his fist into images, while reviewing for cancer!
13) It’s not about AI replacing dermatologists. But it’s about AI assisting family doctors who are called to do dermatology cases.
>> I wrote this article about a DNA stool test and colonoscopy and it created much angst among gastroenterologists. The reality is it’s general practitioners who are prescribing alternatives to traditional procedures because patients are approaching them first, not specialists.
14) AI speech processing exceeds performance of human transcriptionists. Can it be used in the medical office to speed up EHR documentation?
15) We are trapped in a binary world of medical diagnosis – normal or abnormal and ignoring rich, finer data on various possibilities.
>> We are barely scratching the surface of what’s possible. The future of AI-based medicine is vast and yet to be uncovered. Google’s using 46 billion data points to predict medical outcomes.
16) Surgery 4.0. Imagine cloud-connected surgeons sharing data to democratize surgical practice.
17) Based on several acoustic biomarkers (voice), AI can sense various mental conditions – from depression, schizophrenia, bipolar disorder and so on.
18) In a study, AI learnt from electronic medical records of 160,000 patients to predict death with great accuracy.
>> Imagine what would happen if this information is released to patients or worse their insurers or employers!
19) Insurers like United Healthcare are experimenting with voice AI to replace keyboarding.
20) It’s likely that AI for medicine will take hold outside of US in countries like China or India. Economist characterized China as “the Saudi Arabia of data” (hospitals are training AI using massive amounts of data).
>> Healthcare is likely to be globalized and more and more uniform in the future. Discoveries in China will impact medicine in US and elsewhere. It’s in our interest to develop a more global mindset in healthcare and be open to new possibilities.
21) Nutrigenomics is an evolving field. Can we personalize food to control disease?
>> It’s too, too early. I doubt we are at the point where we can trust the food we buy yet. How do we then customize it?
22) With $600 million in funding, Chinese company iCarbonX is attempting to collect data on a massive scale across “lifestyle, DNA sequencing, proteomics, metabolomics, immune system via autoantibodies, transciptomics, the gut microbiome, continuous glucose monitoring, and the use of smart toilets and mirrors beyond smart phones.” The plan is to develop a more accurate AI health coach.
>> There many companies that are pursuing similar goals. For the machine to guide our health. We’ll see many forms of AI coaches – possibly not for all therapies but definitely for certain conditions.
23) In 1975, the term “health system” wasn’t coined yet, US spent $800 per patient per year and less than 8% of the GDP. Today, we spend $11,000 per patient, over $3.5 trillion per year and close to 19% of GDP.
>> This is so absurd. And what’s disturbing is that there’s no stopping it. It’ll increase more and more, with no guarantee of better outcomes.
24) AI will profoundly change medicine. Some of these changes will be for the better. Some could make it far worse. We have a choice right now to nudge AI development in the right direction.
25) AI can offer the gift of time to doctors by unshackling them from the burden of data entry into electronic health records. But this requires collaboration across the board from administrators to physician leaders and EHR vendors (some with “gag clauses”). The gift of time is not necessarily to keep seeing more and more patients but to go deeper instead.
My final takeaway: Machine-based medicine need not be the future of healthcare. Instead, AI can move us in the direction of greater human empathy and make space for rebuilding a genuine physician-patient relationship. If we allow it to, it can recreate the space for caring, trust and empathy. To ultimately result in healing.
>> The last chapter had a profound impact on me. It seemed to say, let’s rapidly embrace the future the right way so that we can go back to a simpler past.
Re-reading my dog-eared takeaways, I see that they hardly do justice to what the book represents in its totality. Deep Medicine adds up to much more than this.
Read it if you are in healthcare. But read it even if you are not. Because sooner or later, healthcare affects all of us. So would AI.


Originally published on LinkedIn,  by Praveen Suthrum, President & Co-Founder, NextServices. 

Image Credit: Pexels and Amazon

Our new book Private Equity in Gastroenterology – Navigating the Next Wave is still available for download. Here was the best compliment we got to date: “I need my entire board to read this!”
06 Jun 2019

PE and beyond PE: Who wants to invest in your GI practice?

There are a few GI investment models brewing. Some of these are beyond private equity (PE).
Read on for insights on what’s underway.
The story so far with private equity and GI
In March 2016, Audax Capital’s investment in Gastro Health triggered private equity investment in gastroenterology.
After a lull of about 2.5 years, there were two more PE deals.
In October 2018, Waud Capital and Texas Digestive Disease Consultants created The GI Alliance (TGIA).
In November 2018, Frazier Healthcare Partners bought Atlanta Gastroenterology Associates to form United Digestive. Both The GI Alliance and United Digestive have been referred to practice management companies.
In April 2019, Gastro Health made its first out-of-state acquisition in Southeast Gastro.
In May 2019, we saw the announcement of a $130M GI deal. Regional GI, Main Line Gastroenterology Associates, Digestive Disease Associates took investment from Amulet Capital to create the 7th largest deal in the US.
What does it all mean?
Think of these practice management companies as platforms created with the specific intent of acquiring assets of other GI practices and centralizing administrative and technology operations. Growth is created both organically (better reimbursements, contracting, cost control) and inorganically (acquisition of other GI practices).
The practice management companies create management teams that are responsible for executing on the investment thesis set forth by the PE fund.
In the beginning, most practice management companies will tend to expand regionally. For example, TGIA will expand in Texas and Louisiana. Gastro Health first expanded in Florida.
According to Abe M’Bodj of Provident Healthcare Partners, there are about 12 ongoing transactions including acquisition deals. In 2019 and 2020, we will see regional hubs of practice management companies. They will be the first-movers (high risk, high reward). They will be led by PE funds who would’ve accomplished similar deals in other specialties.
Just as with dermatology and ophthalmology, we will see many PE-backed GI practice management companies emerge in different parts of the country. After most big GI groups are taken, the market will open up cross-regionally. At that point, PE funds (and their platforms) will scout around for healthy GI practices wherever they might be located.
When most of the market is taken (that is, whoever wants to sell has sold), it’ll possibly be a 5-7 year window. That’ll time itself with recapitalizing the original practice management companies with other PE funds.
For example, Audax Group invested in Advanced Dermatology & Cosmetic Surgery (ADCS) in 2011. They built it up and exited their investment in 2016 – a 5 year horizon. If they time their GI investments similarly, then we’d see a spur of M&A activity around 2021. One deal leading to another.
Investment models beyond PE
Companies such as Amsurg (now merged with Envision Healthcare) might consider competing with PE funds to create GI platform companies. As you may well know, the company already co-invests with gastroenterologists to build surgery centers. HCA, Surgery Partners, SCA, Physicians Endoscopy (interestingly, Kelso, a PE firm, owns the company) and USPI are other big ASC players.
Taking investments from Amsurg or co-investing with them to create a GI platform company will likely be a different model than PE led models.
A PE led model might mean selling 80% and converting 20% into stock in the new platform entity. A company-owned model might reflect a typical ASC investment model (where majority, say 51%, is owned by the company) in a smaller regional entity.
This is also referred to as a Management Services Organization (MSO) model. The management company makes money by supplying business services and in some cases, by owning or co-owning assets of the practice. They negotiate on insurance contracts and supplies for members.
An MSO announcement could also be in the works. A management company and one or more GI groups could join forces to create and extend the model as an alternative to PE.
It’s also possible that there might be other investors (other types of companies, asset management firms, family offices etc.) who might compete with PE funds for the right investments. Investment models in these acquisitions may drastically vary.
While no one’s talking about it as yet, industry outsiders (e.g. technology or insurance companies) might venture into GI through an acquisition.
Expect the unexpected.


By Praveen Suthrum, President & Co-Founder, NextServices.

Our new book Private Equity in Gastroenterology – Navigating the Next Wave is still available for download. Here was the best compliment we got to date: “I need my entire board to read this!”
22 May 2019

Loss of autonomy. Compromising on patient care.

I was curious how a PE fund would respond to concerns of losing autonomy and compromising patient care. Would they not work with certain kinds of  GI practices? So I just asked Paul Barrett.
Paul Barrett is the Managing Director of BelHealth Investment Partners, New York. BelHealth is a healthcare private equity firm focused on lower middle market companies. This interview is part of the book, Private Equity in Gastroenterology: Navigating the Next Wave.
When you take a 5-10 year horizon, how do you see the GI landscape change because of PE-fueled consolidation?
The practice of GI and patient care will remain the same, however, with PE investment will come additional opportunities in technology and innovation. There will be significant investment by PE firms in leading technology, equipment and systems in order to drive accelerated growth. The goal of PE groups is to create value by accelerating growth and creating scale so there likely will be more regional and national players vs. small and mid-size groups today. With the increased administrative and regulatory burden in GI, creating groups of scale makes a lot of sense.
What are the main concerns that PE funds have while considering investments in GI?
The main concerns in GI are similar to other physician specialties — ensuring and maintaining exceptional patient care and a compensation structure for physician partners post close that keeps all parties happy and incentivized to work hard. Our model at BelHealth differs somewhat from our peers in that we exclusively partner and back physicians and entrepreneurs. Our physician partners roll significant equity, remain Medical Directors of their practices, keep their local brand and maintain full clinical independence and autonomy. Our role is to support the group by building a best-in-class corporate back office and reduce the administrative burden at each individual clinic so the physicians and staff can focus on providing exceptional patient care.
“We do not partner with physician groups that have one outsized individual or ego that is not a team player.”
For what kind of GI practices would PE investments NOT be a fit? 
For us, it’s critical that the physicians be interested in a partnership model and be enthusiastic about becoming part of a family of practices. Also, it’s important that all of our partners be team players and open to building consensus around all major decisions. We do not partner with physician groups that have one outsized individual or ego that is not a team player.
Several practices are waiting and watching. What might be the pros/cons of joining a PE funded group at a later stage?
The pros of joining a group early on are that it allows you to shape the overall platform as you see fit and in your image. However, there may be a few more bumps in the road as the platform finds its footing. If you join later, it may be a more a seamless transition, however, many of the bigger platform decisions such as which EMR/PM systems are chosen, may have already been decided.
Some doctors are worried that PE involvement will mean greater use of physician extenders, losing autonomy, and even compromising patient care at the cost of financial goals. How would you respond to that? 
It’s a fair concern as some PE firms have not behaved responsibility in this regard. It’s incredibly important that you partner with a group that lives and breathes healthcare and that allows its physician partners to put its patients first and remain clinically autonomous and independent. From our perspective, putting short term profits ahead of best-in-class clinical care is short sighted and leads to a poor investment outcome in the end. With our dermatology platform, NavaDerm Partners, pro forma for our most recent partnership, we have 45 MDs and 3 PA’s and each of our seven founding physicians remain Medical Directors of their clinics.


By Praveen Suthrum, President & Co-Founder, NextServices.

Our new book Private Equity in Gastroenterology – Navigating the Next Wave is still available for download. Here was the best compliment we got to date: “I need my entire board to read this!”
09 May 2019

“If you are paid by Medicare, aren’t you already employed?”

“If you are paid by Medicare, aren’t you already employed?”
When I first heard someone suggest this, it struck me as odd. How can independent gastroenterologists be employed by Medicare? 
Well, let’s consider that question. I looked at Medicare contribution for six different types of GI practices in Q1 2019.
Practice A (group in east coast): 29%
Practice B (solo GI in east coast): 19%
Practice C (group in mid-west): 19%
Practice D (solo GI in northeast): 16%
Practice E (group in west coast): 16%
Practice F (solo GI in east coast): 27%
Yes, one could make that argument. Medicare is an employer of these practices at least 16-29% of the time. Because they are paying doctors and doctors are dependent on that payment.
Would this ’employer’ ever give you a raise?
To answer this question, I wanted to review Medicare ‘allowed amounts’ for colonoscopy. Because those procedures are still the bread-and-butter for GI practices.
During the last 10+ years, here’s how Medicare paid for colonoscopies (approximately).

As you can see, Medicare pays less than what they did 10 years ago!
Here are the ‘allowed amounts’ from 2009 and 2019.
Diagnostic colonoscopy: $369 (2009), $331 (2019). -10.3%
Colonoscopy with biopsy: $442.90 (2009), $424.90 (2019). -4.06%
Lesion removal colonoscopy: $499.52 (2009), $446.16 (2019). -10.6%
Let me just say what you already know. It’s unlikely that you will ever get a meaningful raise from CMS.
In fact, Medicare will keep paying you less
Why? The simple answer is they won’t have money to pay.
Read: Medicare will run out of money in 2026, three years earlier than expected, government report says (Chicago Tribune)
We are looking at a pie that can’t keep up with its consumers anymore.
Look at this graph from Kaiser Foundation. Medicare Advantage enrollment has nearly doubled in the past decade. 6.9 million in 1999. 20.4 million in 2018.
There’s no stopping this trajectory.
People are living longer. By 2050, 83.7 million Americans will be over 65 years (double that of 2012 numbers).
Read: Why Medicare Advantage Is Marching Toward 70% Penetration (L.E.K. consulting)
There’s no stopping this trajectory.
Private insurance companies tend to model their payment strategy around Medicare. They will also pay less – especially for standard procedures like colonoscopies.
Airbnb for gastroenterology?
Many disrupting trends are quite clearly on the horizon. Declining Medicare reimbursements for colonoscopy is surely one. DNA testing is another.
As a business person, it’s easy for me to say cut your dependence on Medicare. But I know that it’s not an effortless path to navigate.
There is money in GI but not from traditional sources. Let me give you 10 IDEAS to consider.
1) Reduce your dependence on colonoscopy reimbursements by adding relevant procedures and ancillaries (e.g. is obesity a subspecialty of GI? Some of the largest GI groups make up to 50% of their money from ancillaries)
2) Diversify your patient volume and sources (e.g. a GI practice hired an Asian doctor to attract a new patient pool. Do you repeatedly see the same demographic?)
3) Outsource and reduce costs of basic operations (e.g. billing, accounting. What’s it costing you to hold onto these?)
4) Start clinical trials for upcoming biologics
5) Develop gastroenterology niches (e.g. infusion centers for Crohn’s. What’s different about your GI practice?)
6) Re-energize your hospital partnerships, establish new ones (How can you partner to help the hospitals succeed? Collaboration and negotiation vs competition)
7) Analyze your top and long-tail referral sources. Nurture new ones
8) Standardize and automate your workflow using technology (e.g. We use a variety of algorithms to bill certain claims, check status, check eligibility etc.)
9) Get asset-light to stay current with changes. Stop owning things (e.g. don’t buy servers). Start renting/subscribing (get on the cloud)
10) Build your brand. Make patient engagement as important an activity as seeing them. (Do your established patients hear from you other than the time of recalls?)
When Hilton needs more business, they go about building whole new properties. When Airbnb needs more business, they simply borrow your assets using a system that they’ve already built. At $31 billion, they are valued more than Hilton or American Airlines.
And here we are still talking about declining payments from Medicare. Even though, the same Medicare population (senior citizens) is Airbnb’s fastest growing demographic.
More on all this soon. But for now, it’s time to shape our mindset towards disruption. It’s time to think differently about gastroenterology.


By Praveen Suthrum, President & Co-Founder, NextServices.

Our new book Private Equity in Gastroenterology – Navigating the Next Wave is still available for download. Here was the best compliment we got to date: “I need my entire board to read this!”
16 Apr 2019

Cologuard = Google car?

Our new book Private Equity in Gastroenterology – Navigating the Next Wave is still available for download. Here was the best compliment we got to date: “I need my entire board to read this!”






Cologuard = Google car?
I sat in a Google self-driving car back in 2012…when it was still a Toyota Prius. See the pic below. Neither I nor the car look this way anymore.

The big gadget on top of the car is the LiDAR sensor. That device fires rapid pulses of light all the time and all around to detect objects in the vicinity. It’s what self driving cars use to navigate.
Back then LiDARs cost $75,000. It wasn’t accurate enough to ensure people won’t get killed on the road. Google spent $200,000 to assemble each autonomous car. Most car companies called it an unreasonable but “cute, research project”.
Every 2 years after that, the LiDAR doubled up in accuracy and dropped by half in price. So did the Google’s self-driving car.

The 8% miss rate
Recently, the Digestive Health Physicians Association (DHPA) lobbied on behalf of gastroenterologists to make sure that Cologuard modifies its multi-million ad campaign. The campaign implied that Cologuard can be as good as screening colonoscopy. Of course, they can’t say that.
As you would already know, Cologuard’s stool DNA technology was approved by FDA in 2014. The product is included in major screening guidelines and quality measures. Medicare covers it.
On their website, they present themselves as a “sensitive screening strategy that improves patient compliance” for colorectal cancer screening. If you click on “How effective is Cologuard?”, an image loads up showing that Cologuard found 92% of colon cancers (per a study involving ~10,000 people).
That’s an 8% miss rate. The company is quick to say in multiple places that false positives and false negatives occur with their product.
At The GI Roundtable conference in April 2019, Jason Dominitz, MD, MHS, National Program Director for Gastroenterology in the Veterans Health Administration asked the audience this question. What risk are you willing to take for your patient?
The question might as well apply to Cologuard.
It’s not my place to comment on clinical aspects of Cologuard. I’m just the biller who knows how to get my clients paid correctly for various GI procedures.
But as a curious technologist, I can’t help but note that it cost $2.7 billion to fully sequence the human genome (in 2003). And today, it costs $200 to do so.
I learn that it’ll soon be a penny to sequence the whole genome. It’ll open new dimensions in digital biology, including editing genes.
I can’t help but think along the same lines with Cologuard.
Screening with a scope is linear – one doctor, one patient at a time. Screening via a test is non-linear or data-based. You can scale the test exponential with no dependency on humans.
With digital biology, we move from analog to digital, taking us into the realm of software engineering. We can now talk about data that can be read, analyzed and possibly programmed.
We are then moving from linear to exponential.


Exponential growth of Cologuard
See these graphs. This one shows their impressive, consistent quarterly revenue growth.

This one shows the number of physicians who ordered the test for the first time. Observe the exponential spike in 2018.

With more tests, Exact Sciences (the maker of Cologuard) will have more data. With more data, the test will tend to get more and more accurate. As of end of 2018, Exact Sciences performed 1 million tests.
Surely, they’ll do more.
Beyond the TV ads, they are making all the right marketing moves within GI. They were the only gold sponsor at the AGA Tech Summit in San Francisco this April.
I wonder if more Cologuard screening resulted in new patients for GI doctors. Because now patients are probably more aware or concerned about colon cancer. I don’t know the answer to that.
What if Cologuard recruits a vast global community of bio-programmers to somehow reduce the miss rate? Or even catch the miss rate as it occurs?
It’s not unthinkable if you’ve ever used the Waze app – a GPS navigation software. Waze even lets you know where cop cars are standing based on what other drivers tell the app.
Catching the miss rate as it occurs is also not unimaginable. That’s how Facebook’s AI pulls down inappropriate live videos – even as they occur.


What I worry about… 
I worry…
• That referrals of screening colonoscopy, the bread-and-butter of severalGI doctors, will decline.
• That insurance reimbursements for traditional CRC screening will keep getting lower. To the point of no return.
• That the forces of DNA sequencing and AI (check ai4giclassifying polyps) will intersect at some point in the near future.
• That ancillary revenues from biopsies (from CRC) will also go away becausenow we will exactly know which polyps are cancerous.
• That GI doctors performing below quality benchmarks will be left behind
• That it’ll be too late when GI doctors realize that the world has changed


Guess the price of LiDAR today?
Today (7 years later), the Google car is called Waymo. They call it “the world’s most experienced driver” (would Cologuard at some point call itself the world’s most experienced CRC screener? 😱).
Waymo got cooler. See below. The little black thing on top is the LiDAR.

Making a car autonomous used to cost $200K/car. Then it dropped to $100K/car.
Then to $50K/car.
Now, it hovers around $1,000/car.
The LiDAR scanner costs $50. To remind you, the scanner cost more than 1,000x back then.
It’s expected to cost $10 and sneak into the gadgetry that occupies your smartphone.
Unlike the LiDAR scanner, Cologuard continues to be priced high. More than screening colonoscopy – at $649 because Medicare and others are willing to pay for it. That’s more than sequencing a whole genome! We are sadly so used to bloated healthcare. But even a broken system can’t stop an exponential curve.
Exponential changes don’t just happen because of one trend or technology. It’s because various trends collide and accelerate the doubling.
Should I say this or is it apparent? GI is in the middle of massive disruption. It just depends on which side of the disruption we choose to be.


All product and company names are trademarks or registered trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.


By Praveen Suthrum, President & Co-Founder, NextServices.

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