Private Equity Investment in Vision Care: Creating a Comprehensive Provider

Published June 2016

The vision care sector has continued to attract increasing interest from private equity investors looking to replicate successful investments in related outpatient clinic focused businesses. The widespread success of investment and consolidation within dental practice management and physician specialties such as interventional pain management over the last decade has led institutional investors to seek platforms in related outpatient practices. The eye care sector represents a highly attractive opportunity for private equity given the ability to combine payor-based surgical and primary eye care with cash-based optical products and services that mitigate government reimbursement risk inherent in healthcare services businesses.

Among the three vision care services sub-sectors of optical, optometry, and ophthalmology, there are several industry tailwinds that are projected to drive growth for the foreseeable future. The volume of patients seeking vision care is projected to increase through more widespread eye care coverage under the Affordable Care Act. Additionally, the growing and aging U.S. population will result in increased demand for preventive care from optometrists, as well as significant volume growth in cataract surgery and other age-related conditions treated by ophthalmologists. By age 80, more than half of all people in the U.S. either have a cataract or have had cataract surgery, according to the National Eye Institute, and this will continue to increase the more than three million cataract surgeries performed in the U.S. each year.

Report Summary
• Investment Consideration
• Vertical Integration of Vision Care Services
• Concluding Thoughts