Thinking of Selling Your Practice?

The unrelenting progress of years eventually brings all practising surgeons to a day when they must consider transitioning to a new phase of life, less active in the surgical sphere. The various exit strategies to consider were the topic of a webinar held by the Leadership, Business, and Innovation (LBI) committee of the ESCRS. LBI chairperson Paul Rosen led the discussion with participants Arthur Cummings MD, Milind Pande, and Omid Kermani MD.

Negotiating a sale

Dr Kermani noted that when he began his refractive and cataract surgery practice in 1993, laser refractive surgery was in its infancy. As an early adopter, his primary strategy was to offer his patients the latest and best procedures in refractive and cataract surgery and thus lead his practice to success.

His primary focus was to make his clinic a successful venture, and he had the foresight to see the importance of branding his clinic in a way to pass it on as a going concern. By 2010, the comprehensive practice was performing around more than 10,000 procedures per year. When he reached the age of 55, he realised he would have to consider an exit strategy. Possibilities included passing it on to one of his sons, but as they had taken different professions, the other option was to sell it.

He noted, however, that selling his practice was not easy, and the first attempt failed. The initial offer from potential investors he and his partner received was tempting but was connected to numerous side deals and restrictions. After some sleepless nights, he eventually decided not to go through with the deal, leaving the potential investors disappointed and angry.

“They give you the feeling that you owe them because of the time they had spent in their due diligence, but I told my partner since we are still relatively young and let’s say they pay us maybe 10 years of profit in advance, what is after that?” he said. “And also, imagine if we grow over the next 5 or 10 years—if we sell, we can get a much better bargain.”

That expectation was confirmed a few years later when they received offers for their practice that were an order of magnitude higher. They bought back their junior partners’ shares at a good price, and they are still working at the clinic and happy with the new situation that is a triple-win for him and his partner, the investor, and, most importantly, his patients.

Horizons new

Dr Pande took a different route out of his surgical practice. Rather than selling his clinic, he embarked on a new chapter entirely—establishing Vision and Research Centre and founding (and serving as CEO of) CUSTOM LENS AI, an automated AI-based system for generating personalised refractive surgical prescriptions. He observed he was developing these projects while still running his clinic but realised continuing in full-time practice was interfering with his ability to pursue his longer-term ambition.

“My surgical practice was slowing down the progress of that project, which was the final trigger in the end. I wanted to move away from clinical practice to spend more time on this aspect and focus the next 10 years on teaching innovation in research. That is how I made my decision, and I don’t think that was difficult at all,” he said. “I didn’t sell my practice because I didn’t think the financial offers that came through to me were going to make that much of a difference to me. But more importantly, I cannot hand on my heart recommend those options to my patients who have been with me for many years.”

Passing the torch

Dr Cummings is still very active as medical director of his surgical practice. In his exit plan, he has the prospect of handing over his practice to his son, an ophthalmologist currently doing a fellowship in refractive surgery and oculoplastics. His motivation to perform a high volume of refractive procedures would be crucial in covering the infrastructure costs of running a refractive clinic.

Meanwhile, given the current level of private equity (PE) interest in ophthalmology, a well-established practice will attract numerous offers from venture capitalists. Yet the decision to proceed involves more than just financial considerations.

He also stressed the importance of ensuring the smooth exit for one’s patients when selling or closing a clinic, citing a recent article in the Harvard Business Review reporting on a study showing that, within a few years of purchase, there was a 25% increase in the complication rates of clinics bought by private equity investors.^1,2

“It is not just about looking after your patients and finding a place for them, but also the team you have built up over many years,” Dr Cummings emphasised. “If you want to try and extract some sort of value, my advice to any young physician would be [to] work your entire life to build a brand and take a huge amount of responsibility, and at the end of it all you should be entitled to sell what you’ve built at some sort of value proposition where you can retire.”

Paul Rosen BSc, MB ChB, FRCS, FRCOphth, MBA is Consultant Ophthalmic Surgeon at the Oxford Eye Hospital, Oxford University Hospital Foundation Trust, UK. phrosen@rocketmail.com

Omid Kermani MD is co-founder and CEO/consultant at Artemis Eye Clinic am Neumarkt, Cologne, Germany. mail@Kermani-Vision.de

Arthur B Cummings MD, FRCSed, FWRCS is medical director of the Wellington Eye Clinic, Dublin, Ireland. abc@wellingtoneyeclinic.com

Milind Pande MBBS, BS, DO, FRCS, FRCOphth, CertLRS is founder of Vision Surgery & Research Centre and founder/CEO of CUSTOM LENS AI based in Hull, UK. mp@visionsurgery.co.uk

1. J Miller, “What Happens When Private Equity Takes Over a Hospital,” Harvard Business Review, December 26, 2023.

2. S Kannan, “Changes in Hospital Adverse Events and Patient Outcomes Associated with Private Equity Acquisition,” JAMA, 2023; 330(24): 2365–2375.