In the past decade, private equity groups have gone from taking over a handful of practices to working with as many as 8% 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, Kaiser Health News reports. 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. Read more.
