Hello everyone. This is Mariah Muhammad with Becker's Healthcare.
Thank you so much for tuning in today. We are thrilled to be joined by Dr.
Jim Milton, vascular surgeon and co-founder of the Cardiovascular Health Clinic.
Doctor, thank you so much for joining us today. How are you.
Doing Great. Thank you for having us, Mariah.
Yeah, of course. Um, well, to begin,
we could jump right into today's conversation. So Doctor,
the first question I wanted to ask you is,
can you talk a little bit about your practice and why you chose to open a hybrid
OBL slash assc?
Sure. Great question. I think that, um,
we were founders of a large hospital system, uh,
that was physician owned in Oklahoma City, built those in 2002,
and we kind of, uh, felt like there, there was a trend towards,
uh, C P T codes and H O P D cases, uh,
in the hospital space, uh, trending towards the, uh, surgery center space.
And we,
we really were excited about seeing this and the hospital system with its,
uh, administrative heavy and heavy, heavy overhead SI type of landscape.
Uh, we decided to leave there in 2014 and, um,
and build, um, a surgery center and O B L hybrid.
And the reason we chose, uh, a hybrid model was, uh,
because of payers. And,
and in 2014 anyway,
not all of the C P D codes that are currently available in the surgery center
had moved over.
So we had to have the capability of doing those in the office based space
as opposed to the surgery center space, uh,
or JCO accredited license space. So we, we chose to, uh,
invest in that on the front end as opposed to, you know,
some, some doctors and physicians choosing to just go, uh,
office based lab only. Uh, you know,
there's a lot more investment and a lot more, um, regulation on the,
on the surgery side, uh, and, uh, a lot more higher,
higher standards, even though, uh,
it doesn't matter what day our particular facility is a, uh,
O B L or an assc, it's the same space, and the the standards are,
are exactly the same. It's just a matter of, uh, payers,
uh, and what C P T codes pay in which space.
Yeah, absolutely. That is all amazing.
Thank you for sharing a bit of your story. Uh,
I think you were definitely correct about that trend. And as you know,
private equity investments in healthcare PA skyrocketed, uh, especially in,
um, ASCs and cardio, uh,
cardiology is expected to be the next enticing investment from what we hear.
Uh, for you, what is the current LA landscape right now,
and why are cardiovascular ASCs enticing for investors?
Yeah, I think that that cardiovascular and vascular, um, uh,
our particular model includes three specialties that work together real well in
the space, uh, which include, uh, as you have already stated, cardiology,
vascular surgery, and interventional radiology.
So those are the three that really mix well, uh, in the space.
And I think that what you see now is basically what,
what happened in orthopedics, you know, probably 10 years ago. So the,
the slope we're on the very, very low end of the, uh,
curve as far as the slope and the, and the, uh, the,
just the awesome, you know,
concierge type care that patients feel when they come to a smaller space.
And you know, that space just because it is smaller, you know,
it provides lower infection rates, obviously lower cost,
transparent cost, uh, and all of the things that patients, you know, really,
really love. And so I think that, uh,
private equity has seen this as a very, you know, incredible opportunity, uh,
just like total joints, uh, you know,
or majority of those are being done in the surgery center space now.
But that was, uh, a new thing, you know, 10 to 12 years ago.
So I think that you're seeing a new field basically enter the
surgery space,
and it's obviously a lot higher end with patient care
and choosing the patients that are appropriate for the space, uh,
just like you would in an orthopedic, uh, a s c. But, but, uh,
even to a, even to a higher degree, uh, I think that, uh,
this is what has, you know, brought a lot of interest, uh,
from the private equity side.
They see that same type of slope and growth in,
in the cardiovascular vascular and interventional radiology space that they saw,
uh, in orthopedics, uh, GI and, and those other type of, uh,
specialties. But this particular space has just, uh,
a lot of net value, if you will, or EBITDA involved, uh, just, uh,
because of the types of procedures that we do and the amount of money
we save the entire system, including Medicare and all commercial payers, uh,
as opposed to, uh, the patients, uh,
being placed in a hospital or H O P D type of c PT or d r G
code.
Yeah, absolutely. Thank you so much for sharing that insight.
And since we're touching on private equity, in your opinion,
how does the interest from private e equity impact patient care
operations and finances?
Yeah, so I mean, when we,
when we decided to at least look at private equity in,
um, you know, 2120 and 21, right,
basically in the middle of covid, there was no financial,
uh, need to do that. We, we, we, we ran a good business, uh,
and didn't really need capital at all on the local level,
but we are, uh, my partner and I are, you know,
towards the end of our careers and, um, still very,
very busy practitioners and providers, but you know, we,
we had already been successful in our careers, but we,
we really felt like we wanted to leave a legacy of what we thought
healthcare looks like in the future. And so we,
we went out in 2014 and, you know, we took a,
took some significant risk at that time, um, and,
and built a 40,000 square foot building and, and, and the surgery center and,
uh, and everything. So I think that at the end of the day,
we decided to partner with private equity to try to
try to develop this vision that we had of spreading this, this model, you know,
across states and that that's a different type of capital. And,
uh, and also it's, it's, uh, supportive from the private equity side with,
with a very strong, you know, C-suite, which involves, you know,
A C E o, A C O O, uh, C F O, uh, HR and,
and, and marketing as well as, uh, uh, r c cm cycle. So, uh,
private equity, obviously,
if you do not have that and it's not working well or you need help with that
particular, any of those particular sides of the business, you know, the,
the C-suite or the private equity firm or, uh, ours is, uh,
health and vascular partners, H V P, you know,
is always there to help you as far as any kind of operations, uh,
obviously capital, uh, organic growth as far and a,
as well as, uh, surgery center, uh, builds and, um,
um, the, the ability to, uh, grow in different markets.
Yeah, absolutely. That is all super nice to know. Uh,
thank you for giving us that impact about,
or that giving us that information about impact. For you,
what are the advantages of working with private equity in your lab,
in your experience?
Again, I think it's just defining, uh, with mergers and acquisitions,
finding like minds and like physicians who practice, uh,
good solid medicine, we get called three or four times a week, uh,
from groups and, uh, we do a deep dive, uh,
initially into their practice and their practice habits and,
and it has to be good medicine or we're, we are not interested at all.
Um, and so we, we,
we do that first and then we find like minds and like visions and we
start to, to try to partner with them across different states.
And we have been very successful with that taking, uh,
cardiologist out of hospital systems that aren't happy and majority
of them aren't happy. Uh, if you tru if you gave them truth serum,
they would, they would say so.
And I think that we have brought them out of those systems,
built them medical office buildings, surgery centers,
and partnered with them and tried to emulate, uh,
what we have here in Oklahoma City.
So, quick follow up question.
How does industry play a role in your growth as a company?
So I think it's real important, uh, you know, who you partner with on,
uh, your disposables that you use in the cath lab
and partner with a someone who has the ability to
leverage, uh,
disposable items that you use against capital that you need to build surgery
centers. So with the private equity, uh,
capital and private equity growth throughout multiple states, uh,
you don't o only have leverage with payers,
but you have leverage with, um, partnerships with industry,
uh, to let,
to leverage your disposable items that you use during cases against
capital by equipment, which is, you know, the most expensive part of,
of the buy, obviously other than the construction from the ground up.
But once you start filling the space with the capital needed to take, to take,
uh, state of art care of our patients, then, um,
you know, heart and vascular partners, we,
we pick our partners very closely with, uh,
regarding our vendors because there's numerous vendors out there to
include Phillips, uh, which can, uh,
have the whole package because they have a complete capital equipment, uh,
division. Uh, so we, we, uh, partner with them very closely, uh,
which again adds value to the private equity, uh, side of the, uh, equation.
Now, I'd love to end with a question specifically for our audience listening.
So Dr.
For practice owners looking to partner with private equity investors,
what is your advice for choosing a partner? And also how did you find a partner?
If you could give us a little story time, that would be great.
Sure. Uh, that's a great question.
And I think that you never know about your private equity partner.
It's kind of like getting married without dating anyone,
if that's makes any sense. But it's,
you try to find personalities that,
that match and you sometimes need help with a banker,
uh, for that transaction. Sometimes you don't, uh,
depending on the size of the group and, and, uh,
good attorneys on both sides,
obviously your private equity side will have their attorneys and you will have
your attorneys and you try to find that that private equity
that fits what you want.
I think that we chose a private equity firm that, uh,
was less ibida upfront and more rollover or
waterfall possibility down the road because we believe in the model so much
that, uh, we believe this is the future.
And so we chose a private equity firm assured, who now has,
uh, you know, developed health and vascular partners or H V P, uh,
because of that vision, uh, likeness as far as the,
uh, ability to, to help junior partners.
It gives you a great ability to recruit extremely
high talent because they see the future and they see the
ability to invest in something very special. Uh, it's also on the,
again, the low end of the growth curve.
So they have a really great chance of investing early in
something that could, that, uh, could possibly be very valuable down the road.
Absolutely. Thank you so much for final thoughts. Doctor,
I want to thank you for sharing your time and insights today,
as well as Phillips for sponsoring today's content to our audience,
we hope you tune in to other Becker's podcasts and have a wonderful rest of your
day.
Thank you.