6 thoughts on private equity buyouts in ophthalmology

Wheaton (Ill.) Eye Clinic CEO Ruth D. Williams, MD, discussed key considerations for ophthalmologists considering private equity buyouts during Glaucoma Research Foundation's annual meeting, Jan. 31 to Feb. 2 in San Francisco, Ophthalmology Times reports.

Six takeaways:

1. Dr. Williams knows 12 ophthalmologists in eight states who are considering selling to private equity firms, she said. She also received a buyout offer.

2. Investors in the space often seek to cut costs, consolidate with other practices and resell at a profit, according to Dr. Williams. In the dermatology space, new investors lowered costs by replacing dermatologists with physician assistants, she said.

3. Private equity is rapidly growing in healthcare; the number of firms investing in ophthalmology increased from one in 2012 to 20 by October 2018. Ophthalmology is an attractive space for investors, Dr. Williams said, because about 26 percent of ophthalmologists have independent practices.

4. PE firm-appointed managers are likely to prioritize profits over quality, according to Dr. Williams. Ophthalmologists she surveyed expressed concerns about organizational culture changes, staff treatment, a lack of physician buy-in and attracting talent.

5. Physicians surveyed also said their junior partners like the idea of focusing on ophthalmology rather than management but don't want to give up control, equity or the practice's core values.

6. However, a private equity buyout can appeal to ophthalmologists approaching retirement or growing their practices, according to Dr. Williams. Dr. Williams advised anyone contemplating a buyout to carefully evaluate it and speak to multiple firms.

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