In just a few short years, no two words have shaken up eyecare as much as “private equity”. Whether you are a practice owner that’s suddenly fielding offers for your practice at three or more times what you had originally perceived its worth, or a young doctor suddenly finding it much harder to find opportunities to join practices as a partner or part owner, private equity is influencing the optometric marketplace for every practitioner, seasoned or inexperienced. We sat down with two eyecare professionals that are experienced in the ins and outs of private equity and the decision process around whether you should lean in or opt out.
Mr. Jay Binkowitz is the Executive Vice President of Business Strategy at Total ECP, the private equity group whose medical leadership includes industry stalwarts Dr. Ben Gaddie and Dr. Paul Karpecki. With over 30 years in optical, he’s helped consult and lead business development for both solo independent ODs and larger group practices.
Dr. Michael Kling is an optometrist practicing in San Diego, and the owner of Invision Optometry. He is a lauded industry speaker on the business aspects of practice ownership, and his beautifully redesigned practice and novel concepts for enhancing patient experience led him to win last year’s Invision Magazine America’s Finest Optical Retailer. While he is not partnered with a private equity firm, he has been approached about selling his practice and has gone through the contract review process. He shares the questions he asked himself about whether he should sell his practice, and the pros and cons practitioners should consider when making this decision.
When should a doctor start thinking about an exit strategy? Both Binkowitz and Kling agree that private equity’s entry has made practices worth much more for retiring doctors than in year’s past, but deciding when to exit is a personal decision. Kling suggests that if you are at a point in your career where you only plan to practice around 5 more years, it might be the ideal time for you to sell. Selling too early when you are still decades away from leaving optometry could reduce the long-term value of your practice that you could be building over the coming years until you are actually ready to step away.
What does private equity mean for new graduate and young associate doctors? This is a discussion that often gets overlooked in the private equity debate, but a whole generation of eyecare providers is now entering a marketplace without a clear step to practice ownership through becoming a partner at an existing practice. Kling and Binkowtiz agree that in order for younger doctors to be successful in private practice in today’s marketplace they have to be innovative and unique in their approach to an eyecare practice. Cookie-cutter eyecare will have a hard time competing with private equity group practices where bulk pricing and streamlined management systems drive down costs and maximize profits. But if you are committed to practicing with a niche or unique concept, today’s world of consolidated healthcare provides abundant opportunity to stand out from the crowd as an independent doctor.
There are two sessions at Vision Expo West to learn more about private equity and its impact on eyecare. Make sure you register for Vision Expo West and attend the CE session Private Equity and Eye Care: Should I Stay, or Should I Go? and the special live event “Private Equity Takes Root: What Does it Mean For Optometry?” presented in cooperation with Review of Optometric Business and Vision Monday. For a list of more private equity and business development events at Vision Expo West, head here.