FFL to sell EyeCare Partners - PE Hub

Flip! I wonder what the next group is going to do with it, and what their time horizon is for flipping this again?
 
Flip! I wonder what the next group is going to do with it, and what their time horizon is for flipping this again?
Classic PE modus operandi. Cash in then cashout. Better returns than the stock market. Reminds me of the RE investor groups that were flipping houses in the Phoenix area pre-2008.
 
I would be remiss if I didn't mention the upcoming CEwire2020 lecture by @Benjamin Chudner about Private Equity over the last year, and what these recent developments mean for eye care as a whole. The lecture will include this latest transaction.

--
https://www.cewire2020.com

PRIVATE EQUITY – THINGS TO FEAR AND THINGS TO CHEER
Benjamin S. Chudner, OD, FAAO

Credit Hours: 1
COPE ID: 65839-PM

From the purchase of MyEyeDr by Goldman Sachs to VSP officially entering the market through the acquisition of private practices, Optometry saw a lot of activity by private equity in 2019.

With all indications pointing to even more activity in 2020, many optometrists are wondering what to expect and what impact it will have on our profession.

This course will review private equity transactions this past year, discuss how current issues affecting optometry could lead to more private equity activity, and examine where this may lead in the future, all within the context of whether private equity is good or bad for Optometry.
 
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Adam--

Have y'all considered having a 'counter-point' to PE? For example, a Fred Frost, who is a champion of independent PP?

Just about every article/marketing piece I've seen on PE, is written by or hosted by PE. Not exactly fair or balanced. It's like hosting a CL symposium, and only inviting Ciba....I wonder what they would say?

We don't seem to have any voice on the 'other' side of the equation. Seems like most of the stories I hear are muffled, or under the radar type stuff. ROB seems to publish why PE is great about every week. I think the general feel of the industry is woe is me, and this is my only option.

For those in the know: Do we have an organization(AOA?) interested in being the counterpoint?

Every single organization, business, vendor, and doctor is and will be changed by this trend over the next 10 years.
Seems to me there is only 1 voice speaking.
 
With all indications pointing to even more activity in 2020, many optometrists are wondering what to expect and what impact it will have on our profession.

This course will review private equity transactions this past year, discuss how current issues affecting optometry could lead to more private equity activity, and examine where this may lead in the future, all within the context of whether private equity is good or bad for Optometry.

You mean things like private equity sucks, or that so many big name leaders in optometry that are by optometry for optometry are selling out to PE, or like that optometry should be in the leadership role of our profession but instead are selling the heart and soul of the profession to PE or to BO? Or like that the doctors are not in charge any more? Then there are the highly paid hired guns that are paid by PE or BO to tell the private practice owners about this PE/BO paneca for optometry?

What are you thinking Dr. Charlie Turner?
 
Classic PE modus operandi. Cash in then cashout. Better returns than the stock market. Reminds me of the RE investor groups that were flipping houses in the Phoenix area pre-2008.
Sure is. Buy with leverage, then flip. The PE way.
 
I was approached "cursorily" by a PE firm. Based on rough data from my practice they threw a number at me that was more than what I could probably expect to sell my practice for on the open market but not enough to make me walk away. They wanted a five year contract for me to work, that was fine but the difference in what I would make over the five years as an owner vs as an employee plus what they were offering for the sale was negligible. I would essentially end up in the exact same place five years down the road. So not worth it.

If I was 63, maybe would be worth it.

But as I have said before.....there is a number that will make me walk away.

So if there's a PE firm (or any buyer) out there what wants to make an offer that knocks my socks off and a couple of pairs out of my drawer.....I'm listening.
 
They wanted a five year contract for me to work, that was fine but the difference in what I would make over the five years as an owner vs as an employee

I have a friend that is currently in that situation. He initially liked the idea that he could off load the management, but now it has taken a turn that he is not loving. And he is working much harder in the exam room for less pay, then before the PE deal. Sounds like the honeymoon is over.
 
I was approached "cursorily" by a PE firm. Based on rough data from my practice they threw a number at me that was more than what I could probably expect to sell my practice for on the open market but not enough to make me walk away. They wanted a five year contract for me to work, that was fine but the difference in what I would make over the five years as an owner vs as an employee plus what they were offering for the sale was negligible. I would essentially end up in the exact same place five years down the road. So not worth it.

If I was 63, maybe would be worth it.

But as I have said before.....there is a number that will make me walk away.

So if there's a PE firm (or any buyer) out there what wants to make an offer that knocks my socks off and a couple of pairs out of my drawer.....I'm listening.
Same here.
Not enough, and too young.
Now the added complicator of a junior partner as well.
 
I have a friend that is currently in that situation. He initially liked the idea that he could off load the management, but now it has taken a turn that he is not loving. And he is working much harder in the exam room for less pay, then before the PE deal. Sounds like the honeymoon is over.

These are the things I want to hear about.......from docs who have sold and now let's hear their stories.
How is he working much harder? Where did all the new patients come from that he wasn't seeing before?

Joe, can you tell us more about what your friend doesn't like?
 
These are the things I want to hear about.......from docs who have sold and now let's hear their stories.
How is he working much harder? Where did all the new patients come from that he wasn't seeing before?

Joe, can you tell us more about what your friend doesn't like?

Hah--I am thinking he had his associates seeing the patients while he was posting on ODwire or ODs on FB. Also now he has to get approval for his reduced PTO. And he wanted a new computer for his exam room, but it got vetoed. He is not an owner any more.
 
I was approached "cursorily" by a PE firm. Based on rough data from my practice they threw a number at me that was more than what I could probably expect to sell my practice for on the open market but not enough to make me walk away. They wanted a five year contract for me to work, that was fine but the difference in what I would make over the five years as an owner vs as an employee plus what they were offering for the sale was negligible. I would essentially end up in the exact same place five years down the road. So not worth it.

If I was 63, maybe would be worth it.

But as I have said before.....there is a number that will make me walk away.

So if there's a PE firm (or any buyer) out there what wants to make an offer that knocks my socks off and a couple of pairs out of my drawer.....I'm listening.
There are pro's and con's. I've now represented about a dozen doctors through PE transactions involving several different PE entities. I know how it works. For instance, you have some leverage. Whether the number big enough to make you walk away is attainable is unknown if you don't counter. They tend to leave a fair amount on the table. If you don't ask for it, you don't get it. The 5-years. It's negotiable.

PE cannot make money without offices. ODs have the leverage. They need to know how to use it. Someone representing you could lead to a significant increase in the multiplier if you've got the right kind of office. One of my clients received $2.5M MORE than the initial PE offer.
 
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Adam--

Have y'all considered having a 'counter-point' to PE? For example, a Fred Frost, who is a champion of independent PP?

Just about every article/marketing piece I've seen on PE, is written by or hosted by PE. Not exactly fair or balanced. It's like hosting a CL symposium, and only inviting Ciba....I wonder what they would say?

We don't seem to have any voice on the 'other' side of the equation. Seems like most of the stories I hear are muffled, or under the radar type stuff. ROB seems to publish why PE is great about every week. I think the general feel of the industry is woe is me, and this is my only option.

For those in the know: Do we have an organization(AOA?) interested in being the counterpoint?

Every single organization, business, vendor, and doctor is and will be changed by this trend over the next 10 years.
Seems to me there is only 1 voice speaking.

I am always open to hosting a webinar (or even a talk on CEwire, if a lecture is COPE-able); any person who wants to present "A counterpoint to PE" just needs to step forward and volunteer. You've got all of ODwire's resources at your disposal -- the same level of marketing and noisemaking that we'd give to any other event.

Just contact me.
 
There are pro's and con's. I've now represented about a dozen doctors through PE transactions involving several different PE entities. I know how it works. For instance, you have some leverage. Whether the number big enough to make you walk away is attainable is unknown if you don't counter. They tend to leave a fair amount on the table. If you don't ask for it, you don't get it. The 5-years. It's negotiable.

PE cannot make money without offices. ODs have the leverage. They need to know how to use it. Someone representing you could lead to a significant increase in the multiplier if you've got the right kind of office. One of my clients received $2.5M MORE than the initial PE offer.

well....if you know anyone interested in a practice in Connecticut, let me know! Lol
 
I am always open to hosting a webinar (or even a talk on CEwire, if a lecture is COPE-able); any person who wants to present "A counterpoint to PE" just needs to step forward and volunteer. You've got all of ODwire's resources at your disposal -- the same level of marketing and noisemaking that we'd give to any other event.

Just contact me.
I'm considering developing something. Al Cleinman does an excellent 1-Day meeting for those considering selling (or buying) a practice through his Performance Partners business courses. He has PE speakers, along with bankers, as part of it, but also covers a lot of other transactions/strategies. I've contributed an hour at each on essential contract terms and have been adding more about PE sales, but I'm probably going to spend even more time this coming year speaking about some of the particulars and unique characteristics of PE sales.
 
OK..so I'm going to chime in...I am 63 and I think about the future alot.
Having suffered the flood...and wondering about who could/would buy my practice...anyone who says they are not interested is a well...sort of fibber...

It would do zero good to do a point counterpoint because no one can do the counterpoint if they haven't taken the bait.

Those who have taken the bait are now employees and so far, most are pretty tight lipped about their transaction.
Perhaps there is a tiny print clause that says if they do...there will be consequences.

Next...the counterpoint would need to be several.....why? Because different PE's offer different programs. So, if one treats the doctor badly and another well, then the argument is moot.

And who is going to present the Point...the shills out there who want the percentage for getting doctors onboard..?
Surely some of you are aware of those "friends" of you who suddenly are anxious to "help" you by calling their bud who will gladly chat with you..with no obligation about the wonders of PE..

I even got an inmail from Linked in the other day about someone wanting to buy my practice..and you know what? I think I'd rather that than one of my "so called" friends who just want to help me..so they can make a buck off my sale.

Nope, the idea just isn't going to fly.

When I went to the Review of Optometry sales pitch a couple of months ago..there was Ken Krivasic...who had recently written an article about why not to sell..and guess what? Now he's sold...hmmmm we of course asked him why write an article then suddenly sell...well, you know the answer...don't you?
Everyone has their price...and the PE simply kept upping the ante until he took it...as most of you would.

But here is the real question....as the "good" practices...whatever that is...get snatched up...will the price paid go up or down? Will fewer available cause the feeding frenzy to escalate? Or will they offer less because they have what they want...
Well, they will never have "what they want" until there are no private offices left..
Show of hands...how many of you have a buddy running a mom and pop pharmacy?

Not so many years ago they were on every street corner...now?

How about Pediatricians...come to Houston..independent peds are rare as hen's teeth?
Care to know how they snatched them up?
They made it impossible for them to refer to specialists.cause they bought the specialists...and if you aren't a part of Texas Children's Hospital network, no referral..
How does that sit? OK I can hear you already..
We don't need no stinkin OMDs.
Really? When was the last time you did a cataract surgery...? And your last injection for ARMD...or show of hands..the last scleral buckle you put on...no..you don't need no stinkin OMDS.

You are super O.D. and not one of your patients has Subretinal neo...not one...

NO boys and girls..the writing is on the wall..how will they pinch our little heads off...well it probably won't be the way I describe..no..I think they have a better idea...but I'm not discussing it here..just rest assured that folks with hundreds of millions of dollars out there aren't the same as a group of rag tagged O.Ds with no national organization that sticks up for even one of us..so guess you better not count on them to take care of it..

And the march to the edge has already started for many years...it's no longer Vision Source, Today's Vision, or even Lenscrafters that is going to spell the end....it's all of our "heros"...Ben Gaddie, Gregg Ossip, Jack Schaffer, and don't forget the Alan Glasiers...nope they have already bailed....they are at the head of the pyramid...and they are no longer the bastions of private practice they once appeared to be...

Sorry to call out a handful, but there are so many others...Tom Arnold...for one...all taking the money and heading for the door..the question is not "if" it is when...

I'm only glad to be 63 instead of 33...cause you younger folks have a long road ahead..the future pharmacists of America we ought to call you...because there will come a day...you'll be working at the CVS instead of XYZ pharmacy.

So, bring on the discussion, but good luck finding anyone who will really tell you how PE is treating them..they are without a doubt thrilled not to write another check to the landlord...they are thrilled not to make payroll...

Guess what is next? Count the years...there will be no VEE or VEW....I mean, why should they exist...who is going to wander the halls to buy a new edger? A new slit lamp...a new contact lens? Fewer and fewer decision makers mean less attendance...so mark my words..it will shut down...cost a bunch to put on that dog and pony show..and if there are no dogs to watch the ponies...no show..

Hide and watch...
 
OK..so I'm going to chime in...I am 63 and I think about the future alot.
Having suffered the flood...and wondering about who could/would buy my practice...anyone who says they are not interested is a well...sort of fibber...

It would do zero good to do a point counterpoint because no one can do the counterpoint if they haven't taken the bait.

Those who have taken the bait are now employees and so far, most are pretty tight lipped about their transaction.
Perhaps there is a tiny print clause that says if they do...there will be consequences.

Next...the counterpoint would need to be several.....why? Because different PE's offer different programs. So, if one treats the doctor badly and another well, then the argument is moot.

And who is going to present the Point...the shills out there who want the percentage for getting doctors onboard..?
Surely some of you are aware of those "friends" of you who suddenly are anxious to "help" you by calling their bud who will gladly chat with you..with no obligation about the wonders of PE..

I even got an inmail from Linked in the other day about someone wanting to buy my practice..and you know what? I think I'd rather that than one of my "so called" friends who just want to help me..so they can make a buck off my sale.

Nope, the idea just isn't going to fly.

When I went to the Review of Optometry sales pitch a couple of months ago..there was Ken Krivasic...who had recently written an article about why not to sell..and guess what? Now he's sold...hmmmm we of course asked him why write an article then suddenly sell...well, you know the answer...don't you?
Everyone has their price...and the PE simply kept upping the ante until he took it...as most of you would.

But here is the real question....as the "good" practices...whatever that is...get snatched up...will the price paid go up or down? Will fewer available cause the feeding frenzy to escalate? Or will they offer less because they have what they want...
Well, they will never have "what they want" until there are no private offices left..
Show of hands...how many of you have a buddy running a mom and pop pharmacy?

Not so many years ago they were on every street corner...now?

How about Pediatricians...come to Houston..independent peds are rare as hen's teeth?
Care to know how they snatched them up?
They made it impossible for them to refer to specialists.cause they bought the specialists...and if you aren't a part of Texas Children's Hospital network, no referral..
How does that sit? OK I can hear you already..
We don't need no stinkin OMDs.
Really? When was the last time you did a cataract surgery...? And your last injection for ARMD...or show of hands..the last scleral buckle you put on...no..you don't need no stinkin OMDS.

You are super O.D. and not one of your patients has Subretinal neo...not one...

NO boys and girls..the writing is on the wall..how will they pinch our little heads off...well it probably won't be the way I describe..no..I think they have a better idea...but I'm not discussing it here..just rest assured that folks with hundreds of millions of dollars out there aren't the same as a group of rag tagged O.Ds with no national organization that sticks up for even one of us..so guess you better not count on them to take care of it..

And the march to the edge has already started for many years...it's no longer Vision Source, Today's Vision, or even Lenscrafters that is going to spell the end....it's all of our "heros"...Ben Gaddie, Gregg Ossip, Jack Schaffer, and don't forget the Alan Glasiers...nope they have already bailed....they are at the head of the pyramid...and they are no longer the bastions of private practice they once appeared to be...

Sorry to call out a handful, but there are so many others...Tom Arnold...for one...all taking the money and heading for the door..the question is not "if" it is when...

I'm only glad to be 63 instead of 33...cause you younger folks have a long road ahead..the future pharmacists of America we ought to call you...because there will come a day...you'll be working at the CVS instead of XYZ pharmacy.

So, bring on the discussion, but good luck finding anyone who will really tell you how PE is treating them..they are without a doubt thrilled not to write another check to the landlord...they are thrilled not to make payroll...

Guess what is next? Count the years...there will be no VEE or VEW....I mean, why should they exist...who is going to wander the halls to buy a new edger? A new slit lamp...a new contact lens? Fewer and fewer decision makers mean less attendance...so mark my words..it will shut down...cost a bunch to put on that dog and pony show..and if there are no dogs to watch the ponies...no show..

Hide and watch...
Yup, can't argue with you on this one because I agree with your sentiments. Maybe we are just cynical or maybe we are onto them? Who knows, but I am not drinking the Kool Aid being currently offered.
 
We'll revisit that comment in a couple of years...

I realize they have already approached you...and me and so many others...but we'll chat in 24 months..when you see what they have in store for all of us...

We'll see..
 
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Yep. Spot on Allan.

it's all of our "heros"...Ben Gaddie, Gregg Ossip, Jack Schaffer, and don't forget the Alan Glasiers...nope they have already bailed....they are at the head of the pyramid...and they are no longer the bastions of private practice they once appeared to be...

Yes. Get to the influencers first. Now the influencers can tell us why this is good for optometry.

Good call on the "friend" trying to help out. Also good call on the future of events like VEE/VEW. No point in running a big exhibit hall like that if there are no decision makers in attendance.

I am sure they all have NDAs.
 
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What are you thinking Dr. Charlie Turner?[/QUOTE]

Dr. Joe,
Not sure. Right now, I'm observing the messaging and publications, and notice they've basically turned into the marketing arm for PE. I used to love to read many of the practice management and trade magazines.......

As Dr. Allan pointed out, the faces and popular mouthpieces in Optometry all seem to work for PE now.

Generationally, I think ODs think differently about their profession. My colleagues that have paved the way for us seemed to be much more united in moving the profession forward over the years. The younger generations don't seem to have a long view about the profession.

I guess for those of us in the middle of our careers, what should be thinking? Should we continue to donate to our state associations and AOA? Am I donating to a future PE profession? Am I pissing into the wind?
I can't stand politics, but begrudgingly donate to Optometry friendlies in SC because my colleagues ask me to. 1800 bought Niki Haley when she was governor, so can't compete with them(we ended up over-riding the governor though, good win for SC).

I don't have answers Dr. Joe, just questions. I'm continuing to invest big dollars in my offices and my future.
The OD side of me is happy. The CEO is happy. The long-term planner isn't sure what to report to the CEO.
 
I'm observing the messaging and publications, and notice they've basically turned into the marketing arm for PE. I used to love to read many of the practice management and trade magazines.......

As Dr. Allan pointed out, the faces and popular mouthpieces in Optometry all seem to work for PE now.

For sure. As the influencers get bought out, and as the publications and even optometry social media gets paid advertisers, their objectivity is clearly tilting in favor of those with the gold.

I agree that many of the young employed docs seem much less involved in advocating for our profession. They have become much more like clock punchers. When they are off the clock they are going to get their acrylics done, going to meet their personal trainer, etc. Dr. Charlie congrats on the nice work in your practice.
 
I was at a private eyewear showing about a year ago. There were probably about 75-100 ODs in attendance. There was one person that represented about 40-50 PE practices. She was buying big time, and she was getting the total VIP treatment by the vendors. Sort of like sitting with the queen. I had to courteously wait for her to finish so I could sit with the vendor to select my 2 dozen frames. I am sure she got some serious pricing.
 
Yep. Spot on Allan.



Yes. Get to the influencers first. Now the influencers can tell us why this good for optometry.

Good call on the "friend" trying to help out. Also good call on the future of events like VEE/VEW. No point in running a big exhibit hall like that if there are no decision makers in attendance.

I am sure they all have NDAs.
Joe...and this will piss off many..history repeats itself..
To be PC..I won't mention names..but look at what ....hold on now..Vision Source...did to grow it's ranks.

It bought and paid for the influencers...made them regional directors..paid them a part of your fee to tell you why this was the way to go...and it worked.

Then ..they sold out didn't they..there is nothing new under the sun..they've done this before, they will do it again..assuming there is a profession to milk..we look to these "former presidents of the bastion of professionalism.." The AOA only to find that they can be bought and paid for...I'm not a christian but I sort of think this crap goes back to biblical times..nope, nothing new....same old crap..

Bought and paid for by what? How many pieces of silver does it take to buy an AOA president....boy, I'm going to catch it for this one..
 
Bought and paid for by what? How many pieces of silver does it take to buy an AOA president....boy, I'm going to catch it for this one..

Yep. The pied pipers apparently all can be bought out. And we are seeing it happen.
 
I'm failing to see a problem here.

Since I started practicing in 1979..Big Optical has only grown and expanded vertically. They control Optometry. They'll continue to push whatever is best for them to sell merchandise......Online exams, opticians refracting...what ever is best for them.
I've worked hard over the last 40 years building a practice and doing Medical Optometry before I knew it was called that.

I'm approaching the end of my career and I fail to see the problem with PE buying out Private Practices. I would like to get paid for the 40 years I invested in the practice..sure I'd like to see some new OD buy my practice, maybe I could even mentor them for a while.....but that doesn't look like its happening....not sure as a new grad I'd want to buy a practice in this uncertain climate.

So what happens if I get bought out by PE at a price and deal I deem fair to me? It's still going to be an Optometric Practice...If PE changes the practice model and earns more that I've been making...good for them....people will still get eye care, and maybe I've been doing it wrong all these years. I'm gonna say it.......I'm going to do what's best for me...I'll follow the lead of the AOA and our "Leaders" :rolleyes:


The winds are blowing in a certain way...I'm going to put my sail up and see where it blows me? I think that's the only way to find out what is going on...

Meanwhile, I filled out a form from the company Ben Gaddie is associated with about a month ago and not even an email back acknowledging receipt.....this will be fun.:confused:

ps...I will also check out people like Cleinman and maybe the Williams group to see if there are other alternatives I may like.
 
I was writing in the middle of the night, but I'm not sure I said PE was "bad"...I said that those saying they would never sell are kidding themselves.

I'm saying that I'm sad that the pinnacles of optometry are looking to make a buck off the sale of your and my practice..
I'm from the Government and I'm here to help..

That's all I'm saying. There are no individuals who can afford to pay you what PE can. They (individuals) cannot come in and run it better...PE probably can.

I'm saying that in ten years we will simply see an aggregate of what was once mom and pop offices..

And I'm saying that at some point many of us will be on that boat...hopefully sailing into retirement without a care..

One final issue...what to do with your new windfall...your practice provides you a relatively safe revenue stream.
The wrong investment will provide you ....well you fill in the blank.
 
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Joe...and this will piss off many..history repeats itself..
To be PC..I won't mention names..but look at what ....hold on now..Vision Source...did to grow it's ranks.

It bought and paid for the influencers...made them regional directors..paid them a part of your fee to tell you why this was the way to go...and it worked.

Then ..they sold out didn't they..there is nothing new under the sun..they've done this before, they will do it again..assuming there is a profession to milk..we look to these "former presidents of the bastion of professionalism.." The AOA only to find that they can be bought and paid for...I'm not a christian but I sort of think this crap goes back to biblical times..nope, nothing new....same old crap..

Bought and paid for by what? How many pieces of silver does it take to buy an AOA president....boy, I'm going to catch it for this one..

Nailed it Allan.

I don't begrudge any individual OD doing what is best for him or her when it comes to selling their practice. Goodness knows it is not easy to sell a practice these days so if PE is the best option then so be it.

Where my issue lies is with all of the "experts" and phonies that are supposed to be our leaders that will sell the entire profession out in a heartbeat. This is why I am infinitely skeptical of ODs that push telemedicine and say that it is the future and if we don't jump on board then we will be left behind. I can't help but feel that there is often an ulterior motive behind the fearmongering.
 
Where my issue lies is with all of the "experts" and phonies that are supposed to be our leaders that will sell the entire profession out in a heartbeat. This is why I am infinitely skeptical of ODs that push telemedicine and say that it is the future and if we don't jump on board then we will be left behind. I can't help but feel that there is often an ulterior motive behind the fearmongering.

I believe they were referred to as "shills".

Sort of like the ODs paid a nice chunk of change to represent instrument, CL or pharma companies, to tell us why their (paid) way is the best way. i.e. know thy molecule. They often have an agenda.
 
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Yep. Spot on Allan.



Yes. Get to the influencers first. Now the influencers can tell us why this is good for optometry.

Good call on the "friend" trying to help out. Also good call on the future of events like VEE/VEW. No point in running a big exhibit hall like that if there are no decision makers in attendance.

I am sure they all have NDAs.

This is the crux of the problem. Everyone who sells gets saddled with an NDA, so you can't hear about what happened on the "other side" of the transaction.

Unless... I guess ... their experience is positive, in which case the acquiring firm will use the influencers as cheap marketing.

I think it is telling that most influencers fail to mention that they've been acquired at all, and present themselves as "business as usual" when writing -- unless they are out waving the PE flag.

I'd love to see one of these firms ditch the NDA clause from an acquisition, so that the experience can be more transparently documented. Not likely to happen though :)
 
My plan is to ride this ride as long as I want to continue seeing patients on a regular basis...currently 3 days a week. At some point, and that time is fast approaching as my son is off to college and I am getting sick of the cold Utah winters, I will hire docs to work the practice full time, move to my Vegas or Newport Beach home, and come in a few days each month to see patients who I still enjoy seeing.

I am still continuing to invest in my practice because the only way to compete with these "me too" look alike offices is to differentiate and that's always been what has worked well for me.

So, as Allan stated, everyone has a sell number. Mine just happens to be higher.. particularly because I don't want to be an employee and certainly not at the "going, market rate."
 
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I'm failing to see a problem here.

Since I started practicing in 1979..Big Optical has only grown and expanded vertically. They control Optometry. They'll continue to push whatever is best for them to sell merchandise......Online exams, opticians refracting...what ever is best for them.
I've worked hard over the last 40 years building a practice and doing Medical Optometry before I knew it was called that.

I'm approaching the end of my career and I fail to see the problem with PE buying out Private Practices. I would like to get paid for the 40 years I invested in the practice..sure I'd like to see some new OD buy my practice, maybe I could even mentor them for a while.....but that doesn't look like its happening....not sure as a new grad I'd want to buy a practice in this uncertain climate.

So what happens if I get bought out by PE at a price and deal I deem fair to me? It's still going to be an Optometric Practice...If PE changes the practice model and earns more that I've been making...good for them....people will still get eye care, and maybe I've been doing it wrong all these years. I'm gonna say it.......I'm going to do what's best for me...I'll follow the lead of the AOA and our "Leaders" :rolleyes:


The winds are blowing in a certain way...I'm going to put my sail up and see where it blows me? I think that's the only way to find out what is going on...

Meanwhile, I filled out a form from the company Ben Gaddie is associated with about a month ago and not even an email back acknowledging receipt.....this will be fun.:confused:

ps...I will also check out people like Cleinman and maybe the Williams group to see if there are other alternatives I may like.
The "problem" is, like big optical, decisions are made by none ODs. How much of a problem is it? No one knows. I've seen many private practice doctors make pretty dishonest decisions. But one thing is for certain, things are changing. I see no problem selling to the highest bidder. In fact you're stupid if you don't.

But it's one thing to practice your whole life trying to do the best you can and sell to the highest bidder and another thing to get on a soap box about private practice, independence and even make something like BC up to separate the profession then sell to anyone that's paying the most.
 
Everyone should read this article I am posting below from the world conference of dermatology about the effects of private equity on their profession. The part about the residencies is diabolical my opinion. Everyone can do what they want, but you should know who you’re dealing with.

There was also a published article in the Journal of dermatology that was removed because it criticized private equity for buying influencers in the dermatology profession and then convincing others to sell their practices to private equity. This is a known practice by them.


WCD 2019: The Perils of Private-Equity Dermatology Practices Are Many and Far-Reaching


Potential to affect both practice and access to care



PracticeUpdate Editorial Team

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Jane M. Grant-Kels, MD


June 12, 2019—Milan, Italy—A warning against private-equity dermatology practice was delivered in a presentation made here at the 24th World Congress of Dermatology, which took place from June 10 to 15. “Is private equity-controlled medical care the kind of medical care that we want to be a part of?” presenter Jane M. Grant-Kels, MD, from UConn Health in Farmington, asked the audience.

“The running of a dermatology practice in the United States, or anywhere, is running a small business,” said Dr. Grant-Kels during her presentation, which was attended by Elsevier’s PracticeUpdate. “Overhead is going up. There is a vocabulary list of new paperwork and bureaucracy. There are contracts that you need an attorney to understand that you have to sign with insurers, and it takes a very sophisticated physician to understand what they are signing. There are mandated electronic medical records, and a new phenomenon is that medical students are graduating with more debt than that they've ever had.”

In addition, older dermatologists eyeing retirement are looking to sell their practices. This opens the door for private equity, and the impending takeover is alarming. Currently, about 10% of dermatology practices in the United States are controlled by private equity. In 2009 there were 229 dermatology practices bought by private equity. In 2019, there were 747. “They are bragging that in 5 years they are going to own 80% of dermatology in the United States,” said Dr. Grant-Kels.

The notion of partnering with a private equity firm can be appealing on the surface, but Dr. Grant-Kels describes it as “a pig with lipstick.” A private equity firm might easily offer to pay a dermatologist the equivalent of six times the practice’s annual earnings before interest, taxes, depreciation, and amortization. This can amount to a huge windfall and certainly more than dermatologists could hope to earn by selling their practices to anyone else.

There are other benefits as well. Private equity firms, noted Dr. Grant-Kels, are “good at centralizing practice and lowering overhead. They are good at running the business, streamlining them, making them more profitable, and relieving dermatologists of management [responsibilities].”

But the disadvantages far outweigh the benefits. “Private equity firms and venture capitalists are interested in one thing: making money,” she said. “Those of us in medicine have many other goals, and many of us make decisions for our patients where we actually lose money because patient care comes first. I don’t see how these values can overlap.”

Dermatologists are usually required to stay on as employees but lose much of their autonomy, right down to being mandated what equipment and instruments to purchase and use. Typically, 20% of the profits of the practice go directly to the equity partners, which makes reinvesting in the business difficult. Private equity firms may let go of more seasoned physicians in the practice, replacing them with younger physicians, who will work for less, as well as physician extenders such as nurse practitioners and physicians’ assistants. A single physician may oversee as many as 5 to 10 physician extenders, who often see new patients or perform complex diagnoses and procedures that are beyond their scope of training. The private equity firm may also mandate more expensive treatment options, even if it goes against the patient’s best interests. “Any primary skin cancer on the face has to be sent for Mohs, even if you think you can excise it,” said Dr. Grant-Kels.

“They offer a young dermatologist a pretty good salary to start, and then they ‘normalize’ those salaries and lower them,” she continued. “They make them sign a noncompete [agreement]. … You owe your soul to them because the noncompetes can be very wide and very unreasonable. And although you could fight them if you go to court, that's very expensive to do it. Most young people don't have the funding to do that.”

There are wider consequences. Private equity firms are starting their own residencies and then hiring their own residents. “Residents are paid an unlivable wage and are [therefore] required to borrow from the private equity practice. When they graduate, they immediately have to pay it back or work for the private equity firm,” said Dr. Grant-Kels. “It’s a form of indentured servitude.” Specialists are hired away from academic medical centers, making it more difficult to train new dermatologists in academic settings.

Private equity firms purchase an “anchor” practice and then buy up other practices in the area, creating “mega-groups.” With the focus set on profits, practices in disadvantaged communities or those that largely serve more complex cases or Medicaid patients will close. “Ultimately, there will be bankruptcies, lack of dermatology jobs, lack of access to care for patients, and loss of diversity in practice,” predicted Dr. Grant-Kels.

“I think private equity is not the model that we should aspire to,” she concluded. “You lose control. Patients are not notified that the practice has been sold to private equity. I do not believe that the physician extender model, to the extent that they are using it, is a good one. I think the consequences of private equity dermatology are huge, particularly as it relates to education. It’s going to have a huge impact on residencies. It’s going to have an impact on access, … and I think it's going to impact the work/life satisfaction of dermatologists who are used to controlling their own environment.”

Copyright © 2019 Elsevier Inc. All rights reserved.
 
The "problem" is, like big optical, decisions are made by none ODs. How much of a problem is it? No one knows. I've seen many private practice doctors make pretty dishonest decisions. But one thing is for certain, things are changing. I see no problem selling to the highest bidder. In fact you're stupid if you don't.

But it's one thing to practice your whole life trying to do the best you can and sell to the highest bidder and another thing to get on a soap box about private practice, independence and even make something like BC up to separate the profession then sell to anyone that's paying the most.

I agree HC...but the decisions affecting the future of private practice are being made by none ODs now. Not sure it will be a problem for the industry of "Optometry", more a private practice problem, which over the last 15-20 years has only grown.

I keep hearing Lonn........The Corporatization of our economy.

I'll stay true to my values......never on a soap box, didn't fall for BC, sell to whoever gives ME the best deal I can arrange.
 
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I'm approaching the end of my career and I fail to see the problem with PE buying out Private Practices.

Dr. Larry,
If I was in your situation, I think I would think the exact same way. Actually, I would be thrilled big money is coming in buying. How easy is it now to sell? Super easy.
You are in a great spot to get some financial closure to your career.

Question: What would a 40 year old Dr. Larry do? To be selfish.....I'm 40. So, that's what I care about!
 
I'm approaching the end of my career and I fail to see the problem with PE buying out Private Practices.

Dr. Larry,
If I was in your situation, I think I would think the exact same way. Actually, I would be thrilled big money is coming in buying. How easy is it now to sell? Super easy.
You are in a great spot to get some financial closure to your career.

Question: What would a 40 year old Dr. Larry do? To be selfish.....I'm 40. So, that's what I care about!

I right there with you at 41 Charlie. Appreciate reading your thoughts.
 
Question: What would a 40 year old Dr. Larry do? To be selfish.....I'm 40. So, that's what I care about!

Tough question...have to think back 25 years.....

I'll assume I loved practicing as much as I did when I was 40...

I'd probably continue to invest in my practice to be the best I could, which in my small mind, would continue to make the practice valuable to "someone"...PE or private sale.

I'd try to consolidate my practice with any willing local OD's to gain some of the advantages of PE...greater buying power, consolidation of managers, opticians, etc.....I tried but absolutely no luck.

I'd constantly have my eyes and ears open to anything that might be interested in my practice...PE, OMD groups or some brave young OD wanting to own their own practice.
 
Well, happy for you all that have an option of selling to PE or any other entity. As for me, I'd love to be in the state of quandary over whether to sell to PE or not, or any other entity. But, such is not to be for me. My exit strategy is still to lock the door and walk away.
 
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Patients going to America's Best don't get the same care as they get in the rest of our offices. Nothing has ever been perfect, but a private equity takeover of private practice is going to change patient care and patients will notice.

I didn't like the buggy whip analogy so try this on for size. My plan is to continue selling Apple iPhones. They're going to be expensive. -Charlie