A Partnership With Private Equity

In the middle of a pandemic, we partnered our four-location optometric practice with a private equity (PE)-backed company. It was a challenging, well-researched decision that came down to a series of simple questions: What will be the best partnership for our team and patients? What will allow us the greatest opportunity for personal and professional satisfaction?

Nearly a year into this partnership, we are confident that this has been the correct choice for us. Here are some of my reflections from this first year that may be helpful for any optometrist considering a similar choice.

COMMUNICATION IS CRITICAL

There’s a wide array of business models among the PE-backed groups within optometry. Some groups may rebrand a practice’s image and experience entirely. Others leave brands intact and aim to support and improve the business side of the practice, allowing practice owners to focus better on revenue growth and patient care. Each optometrist should make the best choice for his or her situation—we chose the latter approach. With either arrangement, though, communication with team members is critical to success. Reflecting on our experience, I think communication in two key areas helped lead to positive outcomes.

First, when we presented this transition to our team, we were intentional about outlining the benefits to our team members and patients. With 35 team members, one of our biggest challenges was human resources (HR). We had experienced such rapid growth over a period of several years that our team support infrastructure couldn’t keep pace. We had large-practice HR challenges, but we didn’t have a large budget to always address these challenges to the highest level.

As many practice owners can attest, a practice’s best asset is the team, not the patients. Developing and keeping a top-notch team is the foundation of great patient care. We made it a priority to help our staff understand that we now had a partner that could support HR functions at the level they deserved. We told the team that our new partners would introduce better systems for time-card management, employee health insurance, and employee retirement savings opportunities. We wanted them to understand that there would be demonstrable improvements in their work lives.

Second, I am glad we also chose to be direct about what other procedural changes would occur. We intentionally prepared the staff that some of these changes would require a reeducation of sorts. Change can be exceedingly difficult for certain personality types. Recognizing this and preparing our team helped remove the fears associated with these changes.

For example, we walked through changes in how lenses would be ordered and from which labs. We outlined how supply ordering and accounts payable would be redirected to our new partners. We were direct and honest. And we continually reminded the team that these steps would benefit the practice and our patients. With this foundation in place, when speed bumps arrived in certain processes, we found that the team was already prepared to meet the challenges.

EASING THE BURDEN

Having interacted with and received offers from many of the major players in optometric PE, I can tell you that in each case their main pitch is nearly the same. They each claim to relieve the burden associated with the business-services side of practice ownership, albeit in different ways. Personally, when evaluating offers, I looked more at the benefits to our practice and patients than I did at removing the burden of business administration. That was partly because I did not fully recognize the extent of that burden at the time.

For my partners and me, our administrative responsibilities had been added slowly over a period of several years. We had recently doubled our top-line revenue, grown to six optometrists and 35 employees, and developed more complex systems and relationships. We did not realize the weight of these burdens until they were fully assumed by our new partners.

No more bookkeeping or accounts payable demands. HR functions now professionally managed. Vendor relationships now optimized. We now had a partner with more leverage and better results. These may sound like buzzwords, but I can tell you our experience during this first year has helped me appreciate the freedom that follows when these burdens are lifted.

IMPROVED QUALITY OF LIFE

Once the great burdens of HR, payables, bookkeeping, vendor relationships, etc. had been removed, it was surprising how much time and energy emerged at the office. I was no longer checking invoices between patients to make sure that our returns were credited properly. I did not have to arrive early at the office to download transactions to QuickBooks (Intuit) in order to survey cash flow and monthly profitability. Soon after our PE partnership began, it felt like freedom to no longer have to worry about whether the new hire was getting onboarded with health benefits, tax forms, and the time-card system. In other words, there were tangible impacts on what occupied my time and efforts at the office.

Although this was a strange feeling at first, it allowed me to focus more on patient care. This may sound like a cliché, but it was true. I don’t think it’s possible for an optometrist to be the absolute best at patient care while also being the absolute best business administrator. Each of those roles act as a drain on the other. When the administrative drain was gone, I found myself more energetic for patient care. I felt a return to the early days of my career when patient care was free from ownership encumbrances. In addition, I could spend some of this new time and energy in professional development, with more opportunities for reading journal articles, taking educational courses, and building relationships with colleagues outside of the practice.

Equally important, I experienced an improved quality in my personal life. As most practice owners would admit, I often used to bring work home. Getting up early, staying up late, and spending time on the weekends to perform multiple administrative duties can take a toll. I give credit to any optometric practice owner who claims to have a healthy work-life balance. I did not always have that balance. The energy and availability I now have for my family far outweighs the value of the financial windfall.

CONSIDER THE PATHS

It would be flippant for me to imagine that every optometrist who has partnered with a PE-backed company shares my same ruminations on their first year. No doubt some optometrists do not reflect so positively on their experience. Yet I think that makes it even more important for the optometrist considering this path to look at all potential partnering groups through a critical lens. That optometrist should also hold that same critical lens up to his or her own professional and personal objectives. There is certainly no one path that is good for all. Reflecting on my first year after the transition, though, I have no doubt I went down the right road.