Private Equity’s Growing Role in Eye Health
With Greg Nodland, CEO, Sunvera Group, and David Ellenberg, MD, Ophthalmic Specialists of Michigan
Private equity firms that invest specifically in ophthalmology practices are quickly dotting the U.S. map. At the end of 2019, there were 25 private equity groups across the country investing in ophthalmology practices, making it one of the fastest-growing healthcare sectors receiving private equity support.
That number is only growing as nearly half of all practicing U.S. ophthalmologists are potentially within 10 years of retirement and are contemplating an exit strategy for their practice.
As these ophthalmologists face new challenges in the industry, a growing number of newer ophthalmologists are choosing to not enter private practice. Rising costs of care, lower reimbursement rates and the additional administrative burden that accompanies these are all contributing factors to this trend, and many ophthalmologists are seeing partnership with a private equity firm as a strategy to mitigate these risks while prioritizing a growing patient base, providing optimal care and staying current with the best quality treatment and technology available.
While ophthalmologists may have different reasons for entering or exiting private practice, one thing is clear: private equity groups and private equity are an increasingly viable option for ophthalmologists no matter where they are on their career path.
Bingham Farms, Michigan-based Sunvera Group entered the ophthalmology market in 2018, serving providers that are seeking a viable option to garner support and administrative resources while remaining autonomous as they run a thriving practice. Today, Sunvera Group supports 18 providers within six practices and two ambulatory surgery centers in the Midwest, including Michigan’s Metro Detroit and Flint markets and Cleveland, Ohio.
“Our sweet spot is ophthalmic care, and our approach is highly collaborative,” said Greg Nodland, CEO of Sunvera Group. “We value the relationships we build with ophthalmologists and the relationships they have fostered with their patients. We don’t seek to get in the way of the care they are providing but rather align with them in a way that nurtures their practice so they can do what they love most – care for their patients.”
As a management services organization dedicated to providing first-rate management and administrative solutions to ophthalmology practices and ambulatory surgery centers in the Midwest, Sunvera fills a unique and critical gap in today’s healthcare market: providing comprehensive “back-of-the-office” support, including growth capital, billing services, marketing, credentialing support, human resources and physician recruitment, benefits and payroll, information technology, and financial and accounting services.
“Ophthalmologists often say they chose their profession because they love patient care, technology and treatment of eye disease,” says Nodland. “They don’t often say they entered the field to stay on top of insurance, pester patients about billing, and constantly keep up with industry/governmental regulations.”
David Ellenberg, MD, a fellowship-trained retina specialist with Ophthalmic Specialists of Michigan, which is part of Sunvera Group’s portfolio of companies, admits he had reservations when the group first considered partnering with a private equity firm:
“Consider your own practice, the equity you’ve already put into it – your education, your staff, your patients, your real estate. You’ve invested a lot into your practice, and it’s only fair to question whether anyone else could ever put the blood, sweat and tears into your life’s work, or whether anyone else could possibly care about your patients the way that you do.”
But as he and his partners began working with Sunvera to grow and build a more comprehensive practice with state-of-the-art retina services, expand the number of cataract and glaucoma specialists and add cornea experts, he soon realized the benefits of being backed by Sunvera Group.
“With Sunvera Group, our care team became part of something bigger, with a deeper bench of expertise and support, that allows us to optimize efficiency and patient care,” said Ellenberg.
Is Private Equity Right for You?
As an ophthalmologist with a thriving practice, you may have concerns before you consider that path. You may fear losing control, having to cut staff and other vital resources, or that the group may not invest in the technology that you need.
“Before considering a private equity backed group or a private equity firm, there are things you need to know about yourself, your investors and your team,” said Nodland, who offers the following considerations to help weigh your decision:
- Choose a private equity backed group (Group) or private equity firm (PE firm) that has your best interests at heart. “The right Group or PE firm can help your practice continue to be stronger than ever and grow, without cutting you out of the practice, or eliminating staff and other valuable resources,” said Nodland. “Private equity investors should seek established, healthy, profitable businesses, and they should be able to provide the support needed for a physician seeking a plan for the future growth of their practice, and address any challenges while allowing the physician to provide the same level of service they always have.”
- Choose a Group or PE firm that will partner with you and empower you to run your practice the way you want to. “Your private equity partner should listen to you and what you need with the ultimate goal to support the practice you’ve successfully built,” says Nodland. They should value your experience and expertise and be ready to enhance your technology and service offerings in a way that keeps you competitive and relevant.
- Transparency in the transition is key to staff engagement. Sunvera Group works collaboratively with physicians, and at the right time, will keep the entire team apprised of key developments with town halls and other ongoing communication building trust and appreciation. “Private equity is relatively new in ophthalmology, so keeping everyone informed and engaged is key to a smooth transition and operation.”
Partnering with the right private equity partner that puts your interests and expertise first can be a viable and successful alternative that helps you continue the work you love while planning for your future. To learn more about Sunvera Group, or to have a conversation to learn more about private equity, visit https://www.sunveragroup.com/contact-us/.