Private equity in ophthalmology: differences between present versus past

The purpose of this review is to examine the differences between the current private equity model in ophthalmology practices and the failed physician practice management companies (PPMC) of the 1990s.

Over the past 5 years, there has been an accelerating expansion of private equity into ophthalmology. In 2022, there are approximately 1400 ophthalmologists affiliated with one of over 30 private equity-controlled entities and further growth appears likely. This contrasts with the PPMC era that had only a few hundred ophthalmologists across a handful of companies and collapsed within 5 years. The reasons for the failure of PPMC model included inadequate capitalization, limited experience managing ophthalmology practices, failure to grow acquired ophthalmology practices, and misperceptions about the future of healthcare. Current private equity entities are characterized by substantial capital, longer term business plans predicated on individual practice growth, increasing market share, physician controlled clinical care, and integration of physicians into administration and governance.

The current private equity model in ophthalmology continues to expand and presents a reasonable model for ophthalmologists considering a change in practice structure. Although distinctly different from the PPMC model, longer follow-up is required to determine the ultimate impact of private equity upon ophthalmology.