Is Independent Optometry in San Diego Dying?
- June 15, 2020
The San Diego landscape for optometry has dramatically changed since 2017, but largely invisibly to the public. Roughly 25% of the private optometric practices in San Diego are now owned by a large corporation, each with hundreds of millions of dollars in assets. Just a few years ago the corporate acquisition of independent optometry in San Diego was non-existent. This is like having many neighborhood family-owned Italian restaurants turned into Olive Garden restaurants in short order.
At least 22 previously independent optometric locations in San Diego County are now owned by one of several corporate consolidators backed by private equity including Total Vision LLC, EyeCare Services Partners Holdings LLC, and EyeCare Partners LLC. This is not necessarily a bad thing. But you and your family should know how eye care is changing in San Diego. It may impact the optometric service and care that you get.
Which Independent Optometric Practices in San Diego Are Now Consolidator-Owned?
Some prominent and previously independent San Diego optometric practices are now under corporate ownership, including: EyeLux Optometry in 4S Ranch, Arena Eyeworks is Point Loma, The Classical Eye in University City, Total Vision Care (Tierrasanta, Rancho Bernardo, and Carmel Valley locations), and Carmel Mountain Vision Care in Rancho Penasquitos, to name a few. Although the consolidators owning these practices hope to sell in a few years for a sizeable profit, each location usually continues to do business with their usual name. In most instances, the selling doctors stay as employees for years as a condition of their sale with incentives to keep them engaged in growing the practice. On the surface, you might not notice much different when you go in for an eye exam.
Why Did Your Optometrist Sell Out?
You might assume that your optometrist sold out for money. That is true, but it is an incomplete understanding. Most optometrists practice for the love of patient care – usually not the stress and unfamiliarity of staffing, marketing, accounting, paying the bills, keeping up with information technology, and other aspects of business planning. Running a business is fraught with risk and stress, and these can take a toll, both professionally and personally. Traditional retail sources of optometric revenue are notably declining. This is due to the online sale of eyeglasses, contact lenses, and the proliferation of online prescription renewal.
With new optometrist student indebtedness at $174,165 in the 2017 academic year, the risks of owning an optometric practice are amplified. That is why there are optometrist-owners that find it attractive to shed business risk and the stress of non-clinical operations. In this manner, optometrist-owners may find acquisition by a private equity backed consolidator attractive.
Will Optometry Follow Pharmacy, Where Chains Dominate?
CVS Health and Rite-Aid/Walgreens have put most independent pharmacies out of existence with extensive merger and acquisition activity over the past decade. It seems that optometry is following a similar trajectory. Now, approximately 7% of all U.S. optometrists work for a private-equity affiliate. The rate of optometric practice acquisition has recently reached a fevered pitch. In prior years, only a physician or optometrist could purchase an optometric practice. Now, the consolidators’ lawyers dance around this hurdle. They do this by creating a management service organization (MSO) where the doctor sells their non-clinical assets to the investment entity and the doctor supposedly continues to control clinical decisions. The doctor agrees to pay a fee to the MSO for billing and management functions.
Controversy exists with whether selling doctor truly maintains control of clinical decisions. This is especially if there are strong incentives that contravene what is best for patients. Despite the ascension of private equity in optometry, the COVID-19 pandemic may course-correct or pause merger and acquisition activity. Like it or not, big businesses are squeezing out independent optometry. It is the same page out of the playbook where the big corporate entities make it tough for the mom and pop businesses. If you enjoy drinking microbrew beers and patronizing artisan and farm-to-table restaurants, you probably will dislike the trend in eye care toward a more commercial experience.
What Will My Eye Exam Experience Be Like After Acquisition?
Unless you ask, you may not even find out that your optometrist’s office was acquired. Many of the consolidators fly under the radar and will not announce ownership change to the patients.
Each of the consolidators make changes to their acquired practices so that their resulting network has shared operations. The consolidators almost always change the electronic health records and the patient communication software. Especially early on during implementation, this can temporarily cause disorganization and confusion to the staff and doctors.
You may also notice your phone calls to the office going to a call center, your payment going to a business name that is different from before, and your questions or concerns involving refunds and credits going to an offsite corporate manager. The practice may offer only selected frames, lenses, and contact lenses based on what deals their corporate network has negotiated, which means you could have less choice than before. You may also feel a different atmosphere walking into the office, especially with the loss of longtime employees and doctors. Some consolidators will shorten the doctor time for your appointment, so that they can see more patients per day.
This is not to say that the experience will necessarily go downhill. In some cases, new network implementations can improve the level of service and provide greater resources.
Should I Go Back if My Optometrist’s Practice When Sold?
Think of these corporate-acquired optometry practices as a meld between a retail optometry (within LensCrafters, Eyeglass World, Stanton Optical, Costco, and Walmart) and a traditional private practice. Even if you have eschewed corporate eye care in the past, it is often valuable to continue a longstanding relationship with your eye doctor, even if they are now employed by a consolidator. Your eye doctor probably knows your eyes and history the best.
That said, some will of course prefer reestablishing care with an independent private optometric practice. Just know that there will be fewer of these practices in the years ahead. This is due to strong merger and acquisition activity by consolidators. The independent practices that persist and thrive will likely provide differentiated and specialized services.
To schedule your eye exam at San Diego’s leading independent specialty contact lens practice, request your appointment at ReVision Optometry today.