There’s been a boom in private equity interest in the medical field recently, with a laser-like focus on physician practices. Larger medical groups are being bombarded with solicitations of interest to buy their practices. For example, ophthalmologists tell me they are getting phone calls on a weekly basis and even flyers in the mail from interested parties - typically “brokers” who are just fishing around.
What on earth is going on here?
While private equity (“PE”) developed as an investment vehicle in the mid-20th century, its popularity in medicine is newer, and comes as investors see an opportunity to consolidate and streamline a highly-fragmented system for the delivery of healthcare. For physicians who own their practices, this new buyer is often paying more than a young associate can afford or than a hospital can offer.
Specialties including dermatology, radiology, anesthesiology and now ophthalmology have become fertile ground for PE firms.