Financial Health of Private Equity-Backed Groups: Perspectives From Eye Care.

BACKGROUND: In private equity (PE) buyouts of medical practices, it is common for the PE firm to raise significant levels of debt in order to finance the purchase. This debt is subsequently shouldered by the acquired practice(s). There remains a scarcity of literature quantifying the effect of PE acquisition on the subsequent financial performance of eye care practices. We aim to identify and characterize debt valuations of ophthalmology and optometry private equity-backed group (OPEG) practices, which serve as an indicator of practice financial performance. METHODS: A cross-sectional study from March 2017 to March 2022 was conducted using business development company (BDC) quarterly/annual filings to the Securities and Exchange Commission (SEC). The 2021 BDC Report was used to identify all BDCs actively filing annual reports (Form 10-Ks) and quarterly reports (Form 10-Qs) in the United States in 2021. The public filings of BDCs lending to OPEGs were searched from the inception of the OPEG's debt instrument in a BDC's portfolio and the amortized cost and fair value of each debt instrument were tabulated. A panel linear regression was used to evaluate temporal changes in OPEG valuations. RESULTS:  A total of 2,997 practice locations affiliated with 14 unique OPEGs and 17 BDCs were identified over the study period. Debt valuations of OPEGs decreased by 0.46% per quarter over the study period (95% CI: -0.88 to -0.03, P = 0.036). In the COVID-19 pre-vaccine period (March 2020 to December 2020), there was an excess (additional) 4.93% decrease in debt valuations (95% CI: -8.63 to -1.24, P = 0.010) when compared to pre-pandemic debt valuations (March 2017 to December 2019). Effects of COVID-19 on valuations stabilized during the pandemic post-vaccine period (February 2021 to March 2022), with no change in excess debt valuation compared to pre-pandemic baseline (0.60, 95% CI: -4.59 to 5.78, P = 0.822). There was an increase in practices that reported average discounted debt valuations from 20 practices (1.6%) associated with one OPEG to 1,213 practices (40.5%) associated with nine OPEGs (including 100% of newly acquired practices), despite the stabilization of COVID-19-related excess (additional) debt. CONCLUSIONS: Debt valuations of eye care practices have declined significantly post-PE investment from March 2017 to March 2022, suggesting that the financial health of these groups is volatile and vulnerable to economic contractions such as the COVID-19 pandemic. Eye care practice owners must consider long-term financial risks and impacts of subsequent patient care when selling their practice to a private equity group. Future research should assess the impact of secondary transactions of OPEGs on the financial health of practices, practitioner lifestyle, and patient outcomes.

The pros and cons of follicular unit extraction (FUE) versus elliptical donor harvesting (FUT).

Hair transplantation has evolved as a practice since the 1960's with advances in technology and surgical technique. With various surgical techniques in existence, patients and practitioners have an abundance of options to curate the best results for the patient. However, with many options come various benefits and consequences that must be examined on a patient-by-patient basis. This review article sought to examine the various surgical modalities of hair transplantation, to outline the pros and cons of various techniques, and to help outline considerations when choosing a given surgical technique.

Trends in Debt Valuations of Private Equity-Backed Dermatology Groups Before and During the COVID-19 Pandemic.

Importance: Private equity (PE) firms have invested in and consolidated dermatology practices. Private equity firms typically operate by conducting leveraged buyouts, which occur when target companies are acquired with capital from PE firms and a combination of debt, which may include debt instruments held in business development corporations (BDCs). Objective: To investigate the valuations of dermatology PE-backed group (DPEG) debt instruments in BDCs' portfolios both before and during the COVID-19 pandemic. Design, Setting, and Participants: This cross-sectional study, conducted from August 1, 2016, to August 31, 2021, examined public financial statements filed by BDCs lending to DPEGs. The public filings of BDCs were searched from inception of the DPEG's debt instrument in a BDC's portfolio, and the amortized cost and fair value of each debt instrument were tabulated. Main Outcomes and Measures: The premium or discount at which each debt instrument was valued at a given time was calculated by dividing the difference between the fair value and the amortized cost by the amortized cost. Different testing methods were conducted for normal or nonnormal data to test differences in debt valuations across all DPEGs between 2 consecutive or nonconsecutive quarters. Results: The search of the public filings found 10 BDCs containing data on 9 unique DPEGs. Overall, there were 15 trackable DPEG debt instruments because multiple BDCs can hold debt instruments for a given DPEG. Data were available from August 2016 through August 2021. During the study time frame, the amortized cost of the loans for an individual DPEG ranged from a low of $1.7 million to a high of $100 million. The valuation of debt instruments was stable for many DPEGs until some were discounted starting in May 2018, with a significant decrease from May 2019 to August 2019 (-1.4%; 95% CI, not applicable; P = .04), prior to the COVID-19 pandemic. Another significant decrease occurred during the pandemic from February to June 2020 (-9.0%; 95% CI, -13.6% to -4.4%; P = .002). US Dermatology Partners decreased to the lowest valuation (Golub BDC, -39.7%; TCG BDC Inc, -48.8%; TCG BDC II, -48.8%) of the DPEGs examined in November 2020 even after receiving a $10 million forgivable Small Business Administration Paycheck Protection Program loan in May 2020. After pharmaceutical companies announced effective COVID-19 vaccine candidates in November 2020, there was a modest and significant improvement in debt valuations (2.3%; 95% CI, 0.2%-0.4%; P = .03); however, they remained discounted. Only PhyNet Dermatology's debt instruments improved to a premium valuation by August 2021. Conclusions and Relevance: Debt valuations of some DPEGs found in this cross-sectional study suggest a lower probability that their loans will be repaid in full. This could be a signal that some DPEGs are not performing well financially.

Micrographic dermatologic surgery (MDS) diplomates: a demographic evaluation and comparison of Medicare case volume.

Micrographic dermatologic surgery (MDS) recently became a board-certified field within dermatology with the first board examination administered in October 2021. To be eligible, dermatologists must have completed a fellowship through the Accreditation Council for Graduate Medical Education (ACGME) or attest to active practice of Mohs micrographic surgery. Attestation of active practice is available from 2021-2025, after which, those sitting for the certifying examination must demonstrate completion of an ACGME-accredited fellowship. This study aimed to compile demographic information on physicians who passed the MDS board certification examination. Medicare Mohs micrographic surgery case volume was compared between fellowship-trained and non-fellowship-trained physicians as well as between members and non-members of Mohs organizations. Names of physicians who passed the examination were accessed on the publicly available American Board of Dermatology website. The Medicare database was used to screen for Mohs surgery case numbers from 2019, and the American College of Mohs Surgery (ACMS) and American Society for Mohs Surgery (ASMS) physician finder tools were used to determine active membership. Physicians not in the Medicare database and those who completed an ACGME-accredited fellowship within the past three years were excluded from case volume analysis. 1673 dermatologists passed the first certifying examination. Medicare Mohs case volumes were compared for 1310 of these physicians. The median number (interquartile range (IQR)) of Mohs surgery cases was significantly higher for physicians who were ACMS/ACGME-fellowship-trained compared to those who were not (370 cases (IQR: 211-560) vs 138 cases (IQR: 37-284), p < 0.001). Members of ACMS and/or ASMS also performed a higher median number of cases compared to non-members (334 cases (IQR: 160-526) vs 95 cases (IQR: 6-246), p < 0.001). Given the 5-year window to take the MDS examination without having completed an ACMS/ACGME-accredited fellowship, more physicians without formal training may choose to become board certified. In addition, less dermatologists may choose to complete an ACMS/ACGME-accredited fellowship since it is not required for board certification. As more dermatologists become board certified in MDS, it may become important to assess for active practice of Mohs surgery and define proficiency metrics.

Asymmetric pathology in primary progressive aphasia with progranulin mutations and TDP inclusions.

OBJECTIVE: To investigate quantitative regional distribution and hemispheric asymmetry of TDP-43 (TAR DNA-binding protein 43) inclusions, neurons, and activated microglia in primary progressive aphasia (PPA) with progranulin (GRN) mutations, and to determine concordance between distribution of pathology, clinical phenotype, and known atrophy patterns. METHODS: Antibodies to phospho-TDP-43, NeuN (neuronal nuclei), and HLA-DR were used to visualize inclusions, neurons, and activated microglia in paraffin-embedded tissue sections from 4 participants with PPA: 2 of the agrammatic and 2 of the logopenic subtype. Unbiased stereological counting techniques were used for quantitation of immunoreactive profiles in language- and memory-related cortical areas bilaterally. Patterns of pathology across cortical areas and hemispheres were compared and their relationships with known patterns of atrophy investigated. RESULTS: Numerical densities of TDP-43 inclusions, and less so of activated microglia, were greater in language-related areas compared with memory-related areas. In language areas, neuronal density displayed a pattern opposite to inclusions and activated microglia. Densities of inclusions and microglia were greater (p < 0.05), and densities of neurons were lower (p < 0.005), in the left hemisphere compared with the right. In agrammatic PPA, the highest densities of TDP-43 inclusions were observed in left inferior or middle frontal gyri, and in logopenic participants, the highest density of inclusions was seen in left inferior parietal lobule. This distribution is consistent with subtype-specific peak atrophy sites. CONCLUSIONS: Distribution of TDP-43 inclusions and neurons, and to a smaller extent of activated microglia, show a regional and hemispheric pattern consistent with disease phenotype and known patterns of atrophy in PPA with GRN mutations.