Private equity investors are bullish on cardiology, a new report from PitchBook, the Seattle firm that tracks market data, says. That’s a change. While private equity firms have long invested in health care, with 1 in 10 investment dollars flowing into the sector, cardiology hasn’t been a big recipient. Why now? Technological advancement has allowed surgeons to perform more cardiovascular procedures in outpatient settings instead of in hospitals. In 2020, the Centers for Medicare and Medicaid Services added percutaneous coronary interventions — a nonsurgical procedure used to treat blocked arteries, or coronary artery blockages — to a list of covered procedures at ambulatory surgery centers. The change enabled centers to perform enough procedures to cover overhead costs, which piqued investor interest. By the numbers: Compared with other specialties like dermatology or dentistry, cardiology has relatively few independent practitioner groups. That might seem like a downside for investors. But Rebecca Springer, the report’s author and PitchBook senior health care analyst, told Erin that scarcity can fuel investor interest. “There aren’t that many assets out there, so if you want to make a cardiology play, you have to move now and pay up in order to do so,” she said. Why it matters: Heart problems are prevalent. Twenty million adults in the U.S. ages 20 and older have coronary artery disease, and at least 660,000 people die of heart disease each year, according to the Centers for Disease Control and Prevention. Heart disease costs the country about $219 billion, the CDC says, and those costs are likely to rise as the population ages. If you can’t beat ’em: Health systems, under financial strain from rising costs and the pandemic, worry about losing revenue, Springer said. One potential model for health systems: A joint venture with an investor and a doctors’ group. “There’s a lot of discussion in that space around how to get out ahead of this,” she said.
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