Eye Care Profits

Private Equity Firms Traget High-Profit Procedures in Eye Care

By Lauren Weber

ST. LOUIS — Christina Green hoped cataract surgery would clear up her cloudy vision, which had worsened after she took a drug to fight her breast cancer.

But the former English professor said her 2019 surgery with Ophthalmology Consultants didn’t get her to 20/20 vision or fix her astigmatism — despite a $3,000 out-ofpocket charge for the astigmatism surgical upgrade. Green, 69, said she ended up feeling more like a dollar sign to the practice than a patient.

“You’re a cow among a herd as you just move from this station to this station to this station,” she said.

Ophthalmology Consultants is part of EyeCare Partners, one of the largest private equity-backed U.S. eye care groups. It is headquartered in St. Louis and counts some 300 ophthalmologists and 700 optometrists in its networks across 19 states. The group declined to comment.

Switzerland-based Partners Group bought EyeCare Partners in 2019 for $2.2 billion. Another eye care giant, Texas-based Retina Consultants of America, was formed in 2020 with a $350 million investment from Massachusettsbased Webster Equity Partners, a private equity firm, and now it says on its website it has 190 physicians across 18 states. Other private equity groups are building regional footprints with practices such as Midwest Vision Partners and EyeSouth Partners. Acquisitions have escalated so much that private equity firms now are routinely selling practices to one another.

In the past decade, private equity groups have gone from taking over a handful of practices to working with as many as 8 percent of the nation’s ophthalmologists, said Dr. Robert E. Wiggins Jr., president of the American Academy of Ophthalmology.

They are scooping up eye care physician practices nationwide as money-making opportunities grow in medical eye care with the aging of the U.S. population. Private equity groups, backed by wealthy investors, buy up these practices — or unify them under franchise-like agreements — with the hopes of raising profit margins by cutting administrative costs or changing business strategies. They often then resell the practices at a higher price to the next bidder.

The profit potential for private equity investors is clear: Much like paying to upgrade plane seats to first class, patients can choose expensive add-ons for many eye procedures, such as cataract surgery. For example, doctors can use lasers instead of cutting eye lenses manually, offer multifocal eye lenses that can eliminate the need for glasses, or recommend the astigmatism fix that Green said she was sold. Often, patients pay out-of-pocket for those extras — a health care payday unconstrained by insurance reimbursement negotiations. And such services can take place in outpatient and stand-alone surgery centers, both of which can be more profitable than in a hospital setting.

The investments that private equity groups provide can help doctors market and expand their practices, as well as negotiate better prices for drugs and supplies, Wiggins said.