Practice Management

Private Equity: Are You Comfortable With Its Impact on Optometry?

By Cheryl G. Murphy, OD

March 11, 2020

As optometry practices are increasingly acquired by private equity-backed buyers, the impact on our profession is called into question. There could be benefits to well-funded buyers acquiring so many practices, but also perils.

I have been a practicing optometrist for over 15 years. I have worked in almost every mode of employment available (corporate, private practice within corporate, optician-owned, optometrist-owned, ophthalmologist-owned.) I have been lucky enough to always land at a place that has allowed me to practice full-scope optometry. I have been able to practice the high level of patient care that I believe the public deserves. I have been able to walk away from the office at the end of the day and feel proud of the care I delivered. However, there is an obvious tide turning in the field of medicine, and optometry is not excluded.

PE-Powered Changes in Optometry
I have watched optician-owned practices, legal in New York state, become virtually extinct. I have seen ophthalmic and optometric practices across the country grow, expand into multiple locations and then sell out to private equity. I have witnessed some doctors open cold, or buy established practices, only to affiliate with a more organized group that promises to help guide their practice while giving them group-buying discounts in exchange for an overall cut of their gross.

The changes I see happening in medicine, ophthalmology, and yes, optometry, sadden me. An article published in the BC Medical Journal, “The Changes in Medicine in the Last 30 Years,” includes a physician’s account of this changing tide:

“In the 1980s, GPs competed with one another to attract and retain patients in their practices, and specialists competed for referrals from GPs. Retiring GPs in larger cities could sell their practices for a significant sum based on goodwill. It was correctly assumed that most patients would remain in the practice due to inertia, in addition to knowing that their records would continue to reside in the office of their trusted GP, ensuring continuity of care, and that the outgoing physician had carefully selected his or her replacement for compatibility of the practice philosophy. In 2019, the situation has reversed; newly minted doctors do not take over, let alone buy, established practices.”

Will Independent “Mom & Pop” OD Practices Continue to Exist?
It seems like we are only decades (if not mere years) away from a true extinction of the traditional “mom and pop” private practice as even the most successful private practices are tempted by the big dollar signs that private investment groups are flashing at them. They are growing tired of fighting insurance companies’ declining reimbursements, managing staff and keeping up with increasing regulations, rules and legal consequences for not dotting all their “i’s” and crossing all their “t’s.”

What’s Next: Cause for Worry?
It makes me nervous as an employed optometrist to see where the next 15 years will take us. Will we all be working for huge companies, corporate affiliates or PE groups? Who will we take directions from? Will the way we practice optometry be ruled by executives who have never seen a patient, and who may have no idea what a truly comprehensive and thorough eye exam entails? Will we be happier this way and find that there was no need to worry? Is this the only way optometry can survive nowadays?

Below are additional questions I will leave to you to answer, based on your own experience in optometry. Maybe some of you are the former owners of practices purchased by PE-backed buyers. I am as interested in your input as input from those like me who have reservations.

What do you think of this “changing tide” in medicine? What has your experience been like working for a practice that has been bought by a PE-backed buyer (if your sale contract permits you to speak candidly)? What has your experience been like after affiliating with a large “buying group?” Have you personally, as a patient, seen changes at your general practitioner’s office in the past two decades? Will banding together within organized optometry like the American Optometric Association help to keep us all on track during this wave of takeovers? What else can be done to ensure we are not overworked and that our patients get the quality of care they deserve?

 

Cheryl G. Murphy, OD, practices in Lake Ronkonkoma and Patchogue, N.Y. You can like her on Facebook or follow her on Twitter @murphyod. To contact her: murphyc2020@gmail.com.

 

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