August 24, 2023

Podcast - Increased Investor Interest in Cardiology

Counsel That Cares Podcast

In this episode of "Counsel That Cares," healthcare and private equity attorney David G. Marks is joined by Stephen Scott, managing director at Bailey & Company, and Dana Jacoby, president and CEO of Vector Medical Group, to discuss contributing factors for the increased industry demand for cardiology services and the sudden spike of private equity interest in the sector.

Morgan Ribeiro: Welcome to Counsel That Cares. This is Morgan Ribeiro, the host of the podcast and a director in the firm's Healthcare Section. Today I am joined by several guests to discuss the growing healthcare subsector of cardiology as one of the most sought-after and competitive specialties for healthcare investors.

In this episode, we will cover a variety of topics, including the drivers of the interest in the cardiology subsector, federal regulations causing shifts in the market, recent transactions and predictions for what's to come in the near future.

Joining me today are David Marks, a partner in Holland & Knight's Healthcare Transactions Group, Stephen Scott, managing director at Bailey & Company, and Dana Jacoby, president and CEO of Vector Medical Group.

David, Stephen and Dana, welcome to the show.

Stephen Scott: Thanks Morgan.

Dana Jacoby: Thanks, Morgan. Nice to be here.

Morgan Ribeiro: So to set the stage, Stephen, your firm recently issued a report that highlighted a variety of factors that are driving this boom in cardiology transactions.

First you all highlighted a lot of demographics that are playing a role in the increased demand for cardiology services. Can you provide some more background on those demographics and what you all found in your research?

Stephen Scott: Sure. At this point, it's not really if you're going to get cardiovascular disease, it's when you're going to get cardiovascular disease.

Right now, 40 percent of the entire population has some form of cardiovascular disease. Once you hit age 60, it's seven out of 10. Once you hit age 80, it's nine out of 10. From an aging demographic standpoint, all the trends are headed that way with the aging population skewing that day by day.

Unfortunately, we also have a continuing increase in obesity in this country. That's going from 35 percent of the population is obese to 40 percent in the next 10 years, and the obesity factor is a direct correlation into cardiovascular health. Between aging population, obesity — it's just, it's the perfect storm.

We've seen a lot of interest in cardiology in the state of Florida. Clearly, the aging demographic in Florida and continued migration into Florida is driving that.

Morgan Ribeiro: Awesome. As you said, I think that the trend will continue to increase, especially as the population continues to age and all the other factors contributing to this.

Now that we understand the drivers for the demand, I want to look at some of the other dynamics that are at play out in the market. And you all noted in your report that nearly 70 percent of cardiologists are employed by health systems, and therefore there remains a lack of attractive independent acquisition targets, which is ultimately driving up valuation multiples in the sector.

Can you speak more to that dynamic?

Stephen Scott: Yeah, that dynamic actually goes back 30 years. For decades, the cardiovascular sector has been a very heavy healthcare system-oriented specialty just because the hospitals, when DRG payments came out back in the '80s and '90s, the cardiac rates were obviously something that the hospital had to grab market share, had to employ the docs, and so that's been a factor that's been around for a long time. That's not to say that's how everyone is. There have been some independent groups that have stuck it out. So you know, in our research that's somewhere between 20 and 30 percent.

What's interesting is you're now seeing what started this trend 30 years ago reversing. So many of those procedures are now getting pushed back out into the ASC. You're able to do a lot of this stuff in the outpatient setting. The patients prefer it. The doctors prefer it. The physician doesn't have to be beholden to the hospital system anymore. If they have an office-based lab where they can do some interventional cardiology, you know, it can be a very attractive situation for those physician groups to stay independent and perform their surgeries on their own time in their own facility on an outpatient setting.

Morgan Ribeiro: Right. And Dana, I know you do a lot of work, obviously with the physicians and this hospital-based practice dynamic as well, so any additional thoughts from your perspective?

Dana Jacoby: Yeah, Morgan. It's just an interesting time right now. I mean, if you would've asked me a year ago what percentage of Vector Medical's calls were coming from independent cardiovascular groups, it was about 5 percent of the total volume, was coming from independent groups. That's gone up sizeably number one, but number two, it's almost weekly now we get a call from a physician group who's in a hospital who's looking to exit, and it's just an interesting wrinkle.

I think for all the reasons Stephen just answered and talked about. The average doctor in the United States is in their mid to late 50s. They're starting to think about what their future looks like, and our hospitals during COVID were so busy, and I feel for our hospital CEOs. They were so busy taking care of the nurses on the floor, trying to staff with travel nurses, trying to just get elective cases back that they weren't high-fiving the specialists a lot of times on their way out of the OR.

And now think about it, right? The cardiovascular surgeon or a cardiologist goes to ACC this year and they're talking to their other solo practitioner or a group physician that says, "Hey, I just got approached by a potential private equity or a strategic company," and all of a sudden it's, what does that mean? How did you do that? And so they're starting to evaluate their options.

Very interesting time. We have quite a few doctors now that are in hospital cardiovascular practices that are just evaluating their options. It doesn't mean they're doing something per se, but it's definitely a new thing.

And then to Stephen's earlier point, the ambulatory surgery center theme across all specialties, but if you follow the fee schedule even for 2024 that just got proposed out, a lot of things are moving into outpatient. So as a cardiologist now, you didn't think that you had the option to potentially start your own practice or move back into that independent lens that you had 30 years ago or 20 years ago. And now with outpatient facilities and outpatient opportunities you do, which is really exciting times for our doctors.

So it's very interesting to see the theme shift so quickly.

Morgan Ribeiro: So, Dana, you've touched on this, but I don't know if we want to dive a bit deeper on why that move away from the hospital-based practice and why physicians are now starting to consider their alternatives. You talked about the age and demographics and obviously the fee schedules. Are there other reasons why we're starting to see that shift and that interest?

Dana Jacoby: I think there's more volume. To Stephen's point, if you look at the state of Florida and how many cardiovascular opportunities have just been deployed over there, all of a sudden those doctors are talking to each other. I mean, these specialties are small, right? Everybody goes to the same conferences, everybody talks at the same level. And I think for the first time, physicians in the cardiovascular space are starting to say, "Hey, I heard about the ancillary services that my brethren deployed, that was then able to go be an independent practice. I didn't think I could unhook or get out or reevaluate my relationship with the hospital, and maybe I can."

And we're seeing very quickly that's becoming something where doctors are just getting more educated about all of their options with all of the shifts occurring across the country. I think a lot of the themes we just talked about, along with what Stephen said, the volumes of patients are going up, the reimbursement is going down. Ambulatory surgery centers offer a great opportunity.

I have one situation right now — I'll give you a real case study — but it's a group of cardiologists. They've gone to their hospital owner many times and said, hey, we want to develop and own an ASC. They've been told, let's wait. Budgets aren't great this year. They're starting to say, hey, should we vote with our feet and look at our opportunities outside of the hospital to stand something like this up? Very real case study of, hey, we want to move forward. We're surgeons. We're cardiovascular doctors. What's our opportunity if we're being told no internally? Maybe we have options outside of the four walls of the hospital.

Morgan Ribeiro: Continuing with that theme on outpatient practices and services, states and Medicare have been approving additional cardiac procedures to be performed on an outpatient basis. Can one of you speak to the shift to the outpatient setting and how that is contributing to that rise? I think maybe getting more specific to your earlier point, Dana, on the payments and what we predict to come in the future.

I know, David, you're seeing this too as rise of cardiology practices, so maybe I can look to you to speak more on that outpatient basis and what we're seeing in the space.

David Marks: Yeah, I think there's really two big drivers to it. One is CMS' shift on reducing costs, which was touched on earlier. And the proof is in the pudding. There's folks out there who are projecting that something like 80 percent of hospital outpatient cardiovascular procedures are going to shift to ASCs by 2030. So there's an enormous expectation, whether or not it's actually going to play out, there's at a minimum the expectation that it's going to play out. And you did see initially a move towards OBLs and in physician office procedures, but I think ASCs are going to be really the replacement for that going forward.

And again, all of this is being driven in large part by cost with a lot more attention due to COVID. COVID drives not only increased number of patients who need care because of long-term effects of COVID, but it just brought a whole lot of attention to the fact that people don't like going to the hospitals.

The second piece of it that I think is often overlooked but is really important to touch on is there is quite a bit of a focus right now and reaction to COVID on health equity. And cardiovascular care is probably one of the most impactful, powerful areas for health equity. Even the fact that we've had the most technological achievements in cardiology, cardiovascular care, yet it still kills the most people. And in particular it kills women and it kills people of color. And those facts are getting attention, not just because of people wanting to do good, but as a practical matter. There are large areas of patient populations where there's reimbursement opportunities and actual profit opportunities that are being overlooked. And I think that ASCs are viewed, particularly in rural hospitals that are failing, they're viewed as a really good launching point for capturing a lot of that lost patient revenue that needs to be served. It's a good thing to do, but it's also profitable to serve it.

Morgan Ribeiro: That's a really good point. And I know the other piece of this is the ancillary service lines that shift to outpatient setting and the regulatory challenges, there's opportunities that that presents. But cardiology practices often adopt high-value ancillary services, which they can create opportunity, of course, but it also creates increased regulatory complexity.

Dana, maybe you can speak to some of those ancillary service lines that we see in the cardiovascular space.

Dana Jacoby: I'll start with the number of them — and David's definitely the attorney that can speak to the regulation — but honestly, Morgan, David's point on the last discussion, this area in this category is increasing at an unbelievable pace with a lot of the outpatient opportunities, but also wearables. Some of the other things that we didn't even realize we had access to until COVID really hit. Everything from echocardiograms to nuclear medicine. You've got ultrasounds, stress tests, the OBLs that David mentioned. We're also watching certain things like urgent care, cardiovascular come into conversations. Whether or not these things actually take traction or create momentum to the level, we think they could.

But the other thing we're seeing that's very interesting on the ancillaries, along with the ASCs, is the opportunity to even go direct to employer with some of these opportunities. Where instead of going, you know, CMS or a payer — circumventing those opportunities altogether and going to a big employer group and saying, "Hey, we're going to direct contracts with you for some of our ancillaries," but really having more of a one-stop shop for cardiovascular services.

And, to David's point, the hospital situation has changed. Even our hospitals are doing more outpatient. It allows our cardiovascular groups, our cardiovascular doctors, the opportunity to bring on additional ancillaries in order to become a mutual fund, not just a single stock, in the way that they see their patients and create quality outcomes and care.

David Marks: I'll add to it something that I think is often overlooked, but I think is going to be crucial to understanding what's actually driving the regulatory landscape. And I think right now it's not what you think. This is not like we see in other sectors of private equity versus the independent doctor because private equity here, much like in orthopedics, is arguably the white knight from some people's perspective as an alternative to hospitals and health systems, because private equity tends to tell doctors a lot less about how they should do things.

Where I think the really interesting dynamic right now, and it's playing out in headlines, is between cardiovascular surgeons and cardiologists. One example is there's a series of headlines, and now congressional inquiries, into whether or not some of the increased reimbursement and treatment for peripheral arterial disease is causing some cardiologists who have had complicated histories — put it that way — with some of the cardiovascular surgeons in their state, and those cardiovascular surgeons are going to the press and saying, hey, we think they're overutilizing patients. They're putting up billboards. You'll see them on the highway. A lot of this is happening in Illinois, by the way. And there's a real push right now by a lot of those cardiovascular surgeons to even cause some of those well-known cardiologists who are treating PAD and claiming that they're preventing amputations, claiming that it's over utilization and causing the amputations.

Now if you dig deeper, there's really a long, somewhat sordid history between the two groups. And I think that it's not one side or the other necessarily is completely right or wrong, but the fact that dynamic is playing out in the press is an underlying driver behind the scenes that I think is important to understand because that's going to focus regulatory efforts around what procedures should they be doing audits on or prioritizing in their review.

Morgan Ribeiro: Great. And you know, I think that the physician alignment piece, I know we've also touched on this, but that is key to success. So cardiologists on average earn more than most other medical specialties.

And David, to start with you, I'm curious from your perspective on what this means in terms of actually structuring post-transactional compensation arrangements to ensure satisfactory compensation to these medical professionals. I know this can get pretty tricky and complicated, so I'm sure others have perspective on this as well, but I'll start with you.

David Marks: Sure. So I'll share one of the first things that I learned the hard way when I started talking to cardiologists, and that is they also take the longest to start making money, and that's crucial. Dana mentioned earlier if you look at the demographics within the industry, there's a gap, and there's a huge shortage of new doctors coming out of residency. And so in order to attract them, you've got a younger generation that wants guaranteed base salaries and aren't attracted to the eat what you kill model.

There's also an underdeveloped, I would say, culture of entrepreneurship. Yet at the same time, they're on Instagram watching these little short clips about people flying their jets and wearing their Rolexes and saying, hey, passive income is great. So they want to have profit sharing. They want to own pieces of ASCs and OBLs, but there's less understanding of how to get there. They also want a base salary and not just a percentage of compensation. I think that is a fundamental difference and a challenge because a lot of these groups, they need to go out and attract younger doctors in order to prove sort of sustainability to private equity buyers, but also just because some of these guys have been working their tails off for many years and the need help to service their patients.

So there's absolutely regulatory issues. You've got your typical Stark law issues — that can take up a whole different podcast. I would say that, again, understanding the underlying drivers of this. You've got to look at how long does it take for them to make money. What are their cultural expectations on the younger side? And for the older guys, how high a priority are they willing to place on recruitment relative to potential dilution on their equity share?

Morgan Ribeiro: Stephen, anything to add from your perspective? I know you're often involved in part of the deal-making process.

Stephen Scott: Sure. I think if ultimately the goal is to transact with private equity, there does have to be a reset of compensation. And it becomes both a philosophical decision for that physician practice of do they want to give over some control of the practice. Usually clinical control, isn't really part of the equation, but there is some management control that is given over.

The second thing is it becomes a math issue depending on what the purchase price is and pre-funding future compensation. Today in a purchase price, you really have to start with a high compensation specialty so that when you cut back on that compensation to create the EBITDA of the practice to purchase, you still need to have that physician in a position where it's still a market-based compensation. So what you're really doing is trying to sell excess compensation. Typically, they're high producers, and in a lot of situations, some of these are interventionalists that do have their own OBL or cath lab.

On the other hand, you have the hospital-based vascular surgeons who are very well compensated by the hospital. The hospital is quote-unquote "losing money" if you're just looking at what that physician is bringing in versus their pay on their own PNL. What it excludes is what's the technical fee that the hospital's bringing in on the open heart case. And that's where the hospital's bringing all the money, so they have very highly compensated hospital-based physicians.

And the question becomes trying to bring some of those out. They really have a subsidy from the hospital because of all of their open heart cases in the hospital or versus what an interventionalist is doing in the outpatient setting and how their dollars are flowing in. It becomes this dynamic of what is sustainable in the long run. Where are the cases going, and what's sustainable in the long run?

Dana, I'd be interested to hear with the groups you've worked with on the inpatient side. They're at a much higher salary level than what you would typically see in an independent group.

Dana Jacoby: I always say, Stephen, it's heads, hearts, babies and knees that pay a hospital bottom line. And so it's a sticky wicket, right? It's one of those things where I think our hospital CEOs are trying to figure out how do they move to more at risk or how do they move to more outpatient without upsetting the apple cart.

And to Morgan's point, and to David's earlier point, our younger doctors are coming out now asking, can they be shareholders? What does this mean to their bottom line? They don't maybe want to stay in partner meetings until 10 o'clock at night. In an independent practice, how do they not do that?

I think it's a really tough situation right now in that the salaries are higher, the incentives are high, but it's also how do you shift into long-term value-based care models without upsetting the apple cart of what this looks like from a revenue perspective.

I know, by the way, knowing most of our hospitals ran on, if they were lucky, 2 percent margins in COVID and after. So it's not like our hospitals are flush with a ton of capital that they can go ahead and do this. So, I think it's going to be an interesting couple of years. The next 36 months are going to dictate how a lot of that is being done.

I also know I mentioned the direct to employer models earlier. A lot of our largest employer groups in the country are looking at what their costs are. If they don't have an eminent event with a patient, they'll actually put them on a plane and go to a lower cost provider hospital versus going to the local health system if they feel like the costs are going to be extreme. So, there's a lot more pressure. I think that's going to be on exactly what you just talked about, moving forward. It's not easy. You can't just pull one lever. It's a lot of things that go into the overall continuum of care.

David Marks: I think that point about value-based care, I think it's fantastic. I'd love to talk more with both you and Stephen about that shift because who are these doctors talking to? All right, they're referral sources. So podiatry, primary care.

Dana Jacoby: Right.

David Marks: And that's the key area. In private equity even, what's their long-term play? Part of it is value-based care. Where do you see that going in the cardiology space?

Dana Jacoby: Yeah, it's really interesting, David. I just watched this play out real time.

I live in Colorado, and our largest primary care group here in the state is owned by Optum United Healthcare, and with some of the changes in the cardiovascular space here, there's now some direct kind of discussions going on between 800-pound gorilla and 800-pound gorilla, what that cost of care pressure looks like moving forward.

But I think it's going to depend on the region. If you figure that the Big Five are taking over a lot of our primary care groups, right? Amazon, Optum, Walgreens, Walmart, CVS. Now, depending on what geography you live in, it could look very different than other areas or other sectors around the country. So I think it is a much bigger conversation for a different day, but what it means to our doctors who are coming out of school, is fee for service is still probably going to be in existence, but there's going to be certain contracts that they may go at risk for in their facility or they may be pressured by whoever, Amazon, Optum, Walgreens, Walmart, or somebody else who we don't even know is in the space yet, to lower their cost of care and do more of a Sam's Costco model.

When you look at some of the big private equity rollups that have happened in other specialties, soon to be in cardiology, bigger specialties that have 1,000 providers, they're going direct to employer. They're going direct to payer. They're going direct to other folks and saying, we want to create a better spigot on the way in, but we want to look at the full cost of care scenario for cardiovascular.

It's going to be a very interesting transition. I think there's people in bigger institutions that are going at risk for certain populations and trying to get ahead of the changes that are coming, but it's slower than I think we all thought it would be.

I'm dusting off 20-year-old PowerPoints on value-based care. It's still relevant, but it's just adding new slides. So I think we have a long way to go, but it's a very interesting theme that's definitely coming as provider groups are getting bigger and primary care or their referral sources are also getting bigger. Very interesting.

Morgan Ribeiro: Dana, you mentioned earlier the new fee schedule that was announced or proposed last week. Do you have more to share on what that specifically means in the cardiology space?

Dana Jacoby: Yeah, some of it is TBD, Morgan. So usually around this time of the year, CMS puts out their fee schedule proposals, and then they allow time for lobbying efforts to go on and people to chime in, etc. So we won't have anything set until mid to late fall. Then it gets finished by the end of the year and deployed by January.

But you can actively see the shift to outpatient. You can actively see the shift to ASCs. Interestingly enough, some of the hospital reimbursements went up, but physician group or a physician inpatient fee for service on consults and things like that, for the most part, and I'm broad brushing, it went down.

You have to choose who your dance partner's going to be moving forward in 2024, 2025, 2026. It's going to dictate how you get paid. How you're able to perform. And I think that's one of the reasons a lot of our cardiologists are looking at what their options are because they really have to make a decision. If you look at the fee schedule, every year over year I read it, and every year our specialists just seem to come up light in their reimbursement overall, and you just can't add that many more patients to your schedule. So you've got to think about creative ways to be able to make ends meet.

So I think we're going to see that theme again.

My phone went off immediately when it hit by a bunch of different specialists saying, what should we be doing? How do we perform at top of our license? So you're going to see doctors wanting to perform at the top of their licensure and maybe an NP or a PA or somebody else on their care team does something to help compliment their overall effort.

So I think as things get tightened up on the fee schedule, I can definitely push it out to you guys so you can see more about what the actual changes are not just the proposed, but the big themes are ASCs, ASCs, ASCs. You can see it coming and it's going to change and dictate the way a lot of our doctors practice long term.

Morgan Ribeiro: Well, I know our ASC clients like to hear that.

Stephen, going back to your report, obviously there were transactions noted in that and some of the recent transactions in the cardiology space. Any transactions in particular that you would consider to be noteworthy and want to share more with us about those?

Stephen Scott: I think obviously there's been a couple new platforms here this year. If you go back, we're tracking, there's approximately 10 private equity platforms right now. Two, three years ago, pre-COVID, there was zero. Very fast-moving specialty. One of the fastest.

Going back to our conversation about 70 to 80 percent being independent, I think the reason you're seeing this acceleration is platforms understanding that there's a limited acquisition pool of practices. They're moving very quickly in acquiring to make sure that they can achieve their scale goals there.

But Cardiovascular Associates, that's a Webster-backed platform, I think has been one of the most active. They actually acquired Novocardia back in April. That was very interesting because Novocardia at the time was also building their own platform with a commitment from Deerfield. So that was a very noteworthy merger to gain critical mass quickly. Where it had been one practice at a time, that was actually several practices coming together, which we hadn't seen yet. But I think we will see more of those.

Morgan Ribeiro: Dana or David, any other noteworthy transactions that you've been involved with or keeping an eye on?

Dana Jacoby: Yeah, there's been a ton. I think if there's anything, Stephen, David, and my cell goes off with folks looking for platforms. And there's no shortage of private equity-backed entities right now that have cardiovascular in their sights as something that they really want to invest in. Now it's just a question of, can they find a platform?. We're seeing some of their peers invest in platforms.

But to Stephen's point, to go from zero to 10 that quickly, there's just been a ton of investment in the space and a lot of energy behind it. Almost every report you read right now goes through the state of the market and what's changing and some of the downturns in inflation, and then it says, but our gem of the future is cardiovascular. So a lot of excitement around this space. It'll be interesting to see what happens.

I think certain platforms that have grown really quickly are actually starting to say, whoa, we have our states now. Now how do we bolt other things onto our states? We actually have certain regions we're playing for, we don't have to get crazy now adding 10 more states. So I think you're going to also see some of that change as well, which is interesting.

To Stephen's point, some really big players in the space currently, and also some folks that are very eager to come into the space.

David Marks: Yeah, there's very few private equity groups out there that are interested in healthcare and will tell you that they're not at all interested in something related to cardiology or cardiovascular.

One of the litmus tests that someone can use is, do they even know the difference between a cardiologist and a cardiovascular surgeon? And it's sad but true. A lot of folks don't. The reality is that they're focused on the space, not because of the nature of the providers, but because of the tailwinds.

At the same time, the other thing I would say is actually that people really like to compare, contrast the space to orthopedics, and there are a ton of similarities, but a huge difference is before private equity got involved, a whole bunch of large, independent, well-managed orthopedic groups, and that doesn't really exist at the same scale in cardiology.

So in order to do these transactions well, I think that independent groups as well as private equity-backed groups need to take lessons learned from, yeah, orthopedic space, but also some of the more fragmented spaces like dental, podiatry, optometry. And those look very dissimilar in some ways, yet those sort of lessons learned in terms of how to build and grow those platforms, like what Dana was talking about, I think are really important at this stage for private equity groups. So we're not going to find the really big, chunky deals as easily as they could in orthopedics.

Morgan Ribeiro: All right, so everybody get their crystal ball out. I'm curious to see, I think we've touched a lot about sort of where is this headed, but curious to know where you see things sitting maybe 24 months from now in the cardiology space. Or just things that our audience, whether or not they're physician practices contemplating what the future looks like for them, any parting word and things to think about as we look to the next two years.

Stephen Scott: I think in the next two to three years, you're going to see an explosion in development around these practices, putting in, whether it be new OBLs or cardiac specialized ASCs, out into where they're grabbing these patients from.

You don't have to be in the major metro areas to have a great business model, because if you're in the right state, you can be in these secondary and tertiary markets and still have plenty of volume to go around because of the aging population and the increased prevalence of cardiovascular disease.

So I think the first play is grab the practice. The continuing development is going to be trying to integrate more facilities, ASCs and OBLs into those practices.

Dana Jacoby: Yeah, I agree wholeheartedly with that, Morgan. I think that the other theme we're seeing in some of the platforms that are becoming "mature," and I'm using air quotes because we're so new into this space, but when we think cardiology or cardiovascular, we think cardiologists and cardiothoracic surgeons and vascular surgeons, that's going to become an entire ecosystem of cardiology, and it's going to be very interesting. In certain regions, you're literally going to have, to Stephen's point, ASCs, rural healthcare, the ability to do direct to employer models. I don't know if 24 months, it will happen that quickly, but with the volume of these deals if the pace keeps up, it will be a very interesting, very disruptive situation.

Like today, God forbid any of us have an imminent event, we go to the hospital, we sit in the ER, somebody triages us back to the cardiologist, if we're lucky or we have an appointment three weeks later. It's just going to look very different.

We're going to have more regional and local representation versus that hospital situation. And I know we're talking about private equity, but hospitals are very much gearing up. They're building their own ASCs. They're creating hospital at home models. So, I know we're talking primarily about private equity-backed entities, but hospitals are also disrupting their own models in cardiovascular as well. Very interesting time.

I'm excited for the doctors. I think this is going to be a really exciting time for them not to just be a hospital-based cardiologist. I think it gives them options now, which is fantastic compared with where they've been and very bullish on the future of this specialty.

David Marks: I think that point about when you have an imminent crisis going to the hospital, I totally agree with that because think about data.

We haven't talked much about healthcare technology or devices. That's huge in this space. The number of people who have Oura rings, myself included, I can't help but think that the data will get mined and used to get people into treatment earlier where you can have lower intervention, again, tailwinds for ASCs.

Morgan Ribeiro: Thank you all. I know we've just scratched the surface in terms of what we're seeing in this space, and it might be interesting if we have a check-in a year from now to just see where things sit.

And even really, more importantly, I think probably three years from now we will be in a very different place and hopefully that benefits patients and improves care all the way around. I think one of you mentioned earlier, we're heading in the right direction. I think in terms of value-based care, we have a long way to go. This space in particular feels very ripe for developments.

So, thank you all for your time. Dana, Stephen, David, thank you for joining me today.

Dana Jacoby: It's been a pleasure.

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