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From the Journals

Private Equity Acquisitions Affect Industry Payments for Ophthalmologists

“It is unknown whether PE firms affect the financial incentives offered to physicians by other industry actors, which may change clinical decision-making," researchers note.

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A recent research letter investigated how private equity acquisitions may influence financial interactions between ophthalmologists and industry actors to address concerns about potential shifts in clinical decision-making as a result of financial incentives (eg, the use of higher-priced drugs). Investigators found that while private equity-affiliated ophthalmologists initially received more industry payments than their nonprivate equity-affiliated counterparts, these payments declined after acquisition.

In the recent research letter, published in JAMA Ophthalmology, Geronimo Bejarano, MPH, of the Department of Health Services, Policy, and Practice at Brown University, and colleagues analyzed the data of 18,672 ophthalmologists, including 3,129 affiliated with private equity (PE) firms between 2016 and 2020, using Medicare Data on Provider Practice and Specialty files to link ophthalmologists to PE-acquired practices. They assessed industry payments—focusing on general payments such as compensation and meals, while excluding research payments—using data from the Open Payments Program.

A staggered difference-in-differences approach was used to compare industry payment trends prior to and following acquisition, with matched controls based on state, number of beneficiaries treated, and physician age.

Prior to PE acquisition, affiliated ophthalmologists received more industry payments compared with their nonaffiliated counterparts. Affiliated ophthalmologists averaged 18.4 payments, which totaled $13,948.84 per year compared with 11.8 payments that totaled $2,949.75 among controls.

Following PE acquisition, the amount of industry payments decreased by 18%, which equated to a reduction of $2,505.49 per physician-year. However, the number of payments per physician-year showed no statistically significant change. Subgroup analysis of retina specialists showed similar trends but with higher initial industry payment amounts compared with non–retina specialists.

The findings indicated that PE acquisitions may alter financial interactions between ophthalmologists and industry sponsors. Possible explanations included:

  • PE firms imposing restrictions on industry payments that don't align with their financial goals
  • Changes in prescribing patterns or adoption of higher-priced treatments that reduce the need for industry compensation
  • Variability in PE strategies. Some firms may encourage or discourage industry engagement.

The study relied on publicly available payment data, which may not have captured all financial transfers (eg, drug rebates), and heterogeneity across PE firms may have resulted in different approaches to physician-industry relationships. Other limitations included potential time-varying confounders that could have impacted industry payment trends beyond PE acquisitions.

“These findings suggest that PE acquisition may be associated with a reduction in unaligned industry implications for affiliated physicians,” the study authors concluded. They emphasized that future investigations should examine how PE acquisitions influence clinical decision-making, patient outcomes, and practice patterns in ophthalmology and other specialties.

A full list of disclosures can be found in the published research.