Assessing Private Equity Involvement in Ophthalmology: Parallels With the Past, Concerns for the Future

To discuss the history and current state of private equity in ophthalmology, and to explore potential implications for ophthalmology practices, physicians, and patients.

Perspective.

Selected articles in ophthalmology and non-ophthalmology medical literature were reviewed, and commentary is provided based on the authors' experiences.

Investment in ophthalmology appeals to private equity firms because of high procedural volumes, fragmented private practices, opportunities for real estate ownership, and an aging population in need of eye care. As a result, acquisition of private practices by large private equity companies has swelled since 2015. Metropolitan areas and practices that possess ambulatory surgical centers or a high proportion of retina surgeons receive the greatest investment. However, little objective data exist regarding the benefits of this trend. Initial research suggests that private equity ownership may have a negative impact on patient care through greater costs, shorter appointments, and fewer Medicare/Medicaid patients seen. Skeptics of private equity also highlight concerns that include financial risk falling primarily on the acquired practice itself, a short-term business approach that rewards profit maximization, and the erosion of physician autonomy. Furthermore, young ophthalmologists express reservations about working for private equity firms. In all, 78% of trainees indicated that they would not consider employment by a private equity-owned practice, and 81.4% of vitreoretinal fellows voiced concerns about autonomy and job security. Proposed legislation aimed at limiting private equity acquisitions is currently under review at the statewide level, adding additional uncertainty to the future of private equity involvement in ophthalmology.

Although investment by private equity offers potential financial rewards and operational improvements for practices, it also raises significant concerns reminiscent of those experienced by physician practice management companies in the 1990s. Non-anecdotal data are needed to assess the benefits and future of private equity involvement in ophthalmology.