Selling your practice to a private equity investor is one way of responding to the challenges of practicing medicine today. But like other options, it has its pros and cons.
Reviewed by Reginald J. Sanders, MD, and Richard Garfinkel, MD
Private-equity investors are increasingly casting their eye on medical practices, including ophthalmology groups. Dozens of private-equity purchases of ophthalmology practices have occurred in the past five years. Not only do investors continue to scour the landscape for deals, but they may be finding more physicians receptive to their pitches or even making the first move.
The goal in the private-equity market is to make an established, often profitable business—in this case a medical practice—more valuable and to repackage and resell that practice for profit in a three- to five-year time frame. Private-equity investments are typically short term.
Ophthalmology has become a particularly attractive specialty area for investors because of its demographics: an aging patient base with increased prevalence of conditions such as cataracts, treated with elective procedures. Ophthalmologists are limited in number, creating greater demand for their services as well as higher compensation.
Also on the plus side are additional income streams (such as optical shops and ambulatory surgery centers) and the fact that most ophthalmology practices are not in competition with healthcare systems, said Reginald J. Sanders, MD, clinical associate professor of ophthalmology, Georgetown University School of Medicine. He is in private practice with The Retina Group of Washington.