ConsoLiDation of the oPhthaLMoLogY seCtor
Health Care law Section
Continued from page 34
Diversified Revenue Base
The last factor we focus on,
and one critical to the investment
thesis, is that the healthcare sector
must have a diversified revenue
base. More important than
diversification of referral sources,
although still important, is the
diversification of the types of
services generating revenue.
Of particular importance is
the distinction between clinical
revenue, which is tied to the
number of insureds needing care,
and non-clinical revenue, such as
retail optical, dry eye clinics, laser
cataract technology, among others,
that are generally paid out-of-
pocket by the patient and offer
higher margins than clinical
procedures. Moreover, some
ophthalmology practices have
further diversified their non-
clinical offerings into hearing
tests as well as dermatology-like
ancillary services such as botox,
skincare products, and cosmetic
surgery. This diversification of
the revenue base can offer out-
sized margins relative to other
sectors and offset risks associated
with healthcare reform and
political uncertainty.
Conclusion
The healthcare sectors of
dentistry, dermatology, and now
ophthalmology all exhibited very
similar characteristics to those
identified above, which,
collectively, create an environment
where private equity firms can
generate return on investment by
capitalizing on the opportunity
generated by the complexity of
change. Ophthalmology is still
in the very early stages of
consolidation and offers much
opportunity to those aligned with
proper counsel and healthcare
advisors to address any regulatory
hurdles and fair
market value
issues that
arise with each
transaction.
Author: Alex
Kajan, CFA -
Intellego Health
Health Care Law Section CLE
on october 18, katherine Drabiak of the College of Public health at usf gave an
overview on emerging cellular and tissue technology and related ethical issues to the
health Care Law section. she covered fDa regulations and guidance for integrating
product development into clinical practice, as well as considerations for ensuring
provider and physician compliance.
the section would like to thank its luncheon sponsor:
JAN - FEB 2018
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HCBA LAWYER
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