Yashaswini Singh, a health economist at Johns Hopkins University, and her colleagues analyzed private equity acquisitions in ophthalmology, gastroenterology, and dermatology and found that practices charged insurance an extra 20%, or an average of $71, more after the acquisition. Subscribe to KFF Health News' free Morning Briefing. “The problems are accumulating and driving up prices,” added Aditi Sen, director of research and policy at the nonprofit Health Care Cost Institute, which provides data and analysis about the economics of health care. But he warned that private equity companies’ quest to maximize profitability runs the risk of compromising patient care. 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. 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. Often, patients pay out-of-pocket for those extras - a health care payday unconstrained by insurance reimbursement negotiations. 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. 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. They often then resell the practices at a higher price to the next bidder. 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 are scooping up eye care physician practices nationwide as money-making opportunities grow in medical eye care with the aging of the U.S. Wiggins Jr., president of the American Academy of Ophthalmology. 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. Acquisitions have escalated so much that private equity firms now are routinely selling practices to one another. Other private equity groups are building regional footprints with practices such as Midwest Vision Partners and EyeSouth Partners. Another eye care giant, Texas-based Retina Consultants of America, was formed in 2020 with a $350 million investment from Massachusetts-based Webster Equity Partners, a private equity firm, and now it says on its website it has 190 physicians across 18 states. Switzerland-based Partners Group bought EyeCare Partners in 2019 for $2.2 billion. Louis and counts some 300 ophthalmologists and 700 optometrists in its networks across 19 states. Ophthalmology Consultants is part of EyeCare Partners, one of the largest private equity-backed U.S. “You’re a cow among a herd as you just move from this station to this station to this station,” she said. Green, 69, said she ended up feeling more like a dollar sign to the practice than a patient. It can be republished for free.īut 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-of-pocket charge for the astigmatism surgical upgrade.
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