Abstract
Purpose :
Acquisitions of ophthalmology practices by private equity firms (PE) have increased dramatically over the past five years. We performed a qualitative study to gather information on the frequency of acquisitions of ophthalmology practices in the United States, the motivations for acquisitions, and interviewees’ perceptions of their likely impact.
Methods :
Fifteen semi-structured interviews were conducted with key informants (including physicians, consultants, attorneys, investment bankers, and leaders of ophthalmology practices) to further explore this phenomenon and its implications. Snowball sampling was used to identify interview participants and interviews were carried out until theme saturation was reached.
A compendium of three difference data sources was created to document major acquisitions by PE of ophthalmology practices from 2011 to April 2018. The first two sources are publically available industry reports released by PhysiciansFirst and Vision Monday. The third source is the Irving Levin Associates dataset, which contains data on a range of healthcare mergers and acquisitions.
Results :
Key themes emerged from the interviews. Ophthalmology was seen an attractive specialty for PE investment for a number of reasons: strong demand and supply factors (steady and increasing surgery volume and shortage of ophthalmologists), high potential for provision of ancillary services, independence from hospitals, and a highly fragmented market (bringing benefits of scale after acquisitions). A preferential trend towards acquisition of practices with ambulatory care surgery centers was noted.
An increasing trend of PE investments in ophthalmology groups from 2011 to April 2018 was observed (Figure 1). While there has been a steady increase in acquisitions, the majority of activity occurred over the past two years. Practices of all sizes have been acquired and geographic differences were noted, with the Northeast and Southeast being the most active regions in recent years (Figure 2).
Conclusions :
There has been a substantial increase in consolidation of the ophthalmology market by PE over the past two years. Currently, there is no peer-reviewed evidence on the impact of PE acquisitions on the quality and cost of patient care, or patient, physician and staff experience. Additional research is needed to assess the effects of this new phenomenon.
This abstract was presented at the 2019 ARVO Annual Meeting, held in Vancouver, Canada, April 28 - May 2, 2019.