Association of Private Equity Firm Acquisition of Ophthalmology Practices with Medicare Spending and Use of Ophthalmology Services.

PURPOSE: Private equity (PE) firms increasingly are acquiring ophthalmology practices; little is known of their influence on care use and spending. We studied changes in use and Medicare spending after PE acquisition. DESIGN: Retrospective cohort study. PARTICIPANTS: Seven hundred sixty-two clinicians in 123 practices acquired by PE between 2017 and 2018 and 34 807 clinicians in 20 549 never-acquired practices. METHODS: We analyzed Medicare fee-for-service claims (2012-2019) combined with a novel national database of PE acquisitions of ophthalmology practices using a difference-in-differences method within an event study framework to compare changes after a practice was acquired with changes in practices that were not acquired. MAIN OUTCOME MEASURES: Numbers of beneficiaries seen; intravitreal injections and medications used for injections; and spending on ophthalmologist and optometrist services, ancillary services, and intravitreal injections. RESULTS: Comparing PE-acquired with nonacquired practices showed a 23.92% increase (n = 4.20 beneficiaries; 95% confidence interval [CI], 1.73-6.67) in beneficiaries seen per PE optometrist per quarter and no change for ophthalmologists, while spending per beneficiary increased 5.06% ($9.66; 95% CI, -2.82 to 22.14). Spending on clinician services decreased 1.62% (-$2.37; 95% CI, -5.78 to 1.04), with ophthalmologist services increasing 5.46% ($17.70; 95% CI, -2.73 to 38.15) and optometrists decreasing 4.60% (-$5.76; 95% CI, -9.17 to -2.34) per beneficiary per quarter. Ancillary services decreased 7.56% (-$2.19; 95% CI, 4.19 to -0.22). Intravitreal injection costs increased 25.0% ($20.02; 95% CI, -1.38 to 41.41) with the number increasing 5.10% (1.83; 95% CI, -0.1 to 3.80). There was a 74.09% increase (8.38 injections; 95% CI, 0.01-16.74) in ranibizumab and a 12.91% decrease (-3.40 injections; 95% CI, -6.86 to 0.07) in bevacizumab after acquisition. The event study showed consistent and often statistically significant increases in ranibizumab injections and decreases in bevacizumab injections after acquisition. CONCLUSIONS: Although not all results reached statistical significance, this study suggested that PE acquisition of practices showed little or no overall effect on use or total spending, but increased the number of unique patients seen per optometrist and the use of expensive intravitreal injections. FINANCIAL DISCLOSURE(S): Proprietary or commercial disclosure may be found in the Footnotes and Disclosures at the end of this article.

The Growth Of Private Equity Investment In Health Care: Perspectives From Ophthalmology.

The growth of private equity investment in health care has dramatically changed the landscape of health care delivery over the past decade. Private equity firms are rapidly acquiring physician practices, with ophthalmology practices being one of the most frequently acquired types. We present perspectives from thirty-five semistructured interviews conducted with a wide range of knowledgeable people on private equity investment in physician practices, with a specific focus on ophthalmology. Acquisition by a private equity firm can be an attractive option for physicians, particularly older ones. However, interviewees had starkly conflicting perspectives on the likely impact of private equity acquisitions on the cost, quality, and use of medical care.