The patient noted tiny gray flecks drifting across his field of vision a week ago. He’d try to look at them, and they seemed to scatter like a cockroach after you turn on the kitchen light. Weird; annoying even – but the floaters did not seem urgent.

That soon changed. Seven days later, he started losing his vision; it felt like a curtain was coming down over his left eye. He was within hours of permanently losing sight in that eye, his retina detaching from the back of his eyeball. He needed emergency surgery, “before the sun rises again,” according to experts.

Under normal circumstances, that wouldn’t be a problem. Any ophthalmologist would recognize these symptoms and rush to meet the patient. But not necessarily if that eye doctor works for a private equity-owned practice, because such practices are increasingly refusing to perform this emergent procedure. The procedure, you see, is not a moneymaker. Private equity investors want timely profits. They don’t purchase ophthalmology practices in order to lose money.

In recent years, many private equity firms have bought up physician practices, and then looked for ways to increase profits. Sometimes they achieve profits by bringing administrative efficiencies to bear upon their practices. Other times, after buying enough practices to gain local market share, they increase prices, with insurers having little choice but to pay the bills.

But in other cases, they direct clinicians to perform relatively lucrative procedures while reducing, or eliminating, the performance of unprofitable ones.

Consider emergency surgery for retinal detachment. About 50,000 Americans experience sudden retinal detachment each year, requiring urgent surgery to avoid permanent vision loss. But there’s a problem – average Medicare reimbursement for the procedure is less than $4000, and the cost of performing the procedure is closer to $8000. Most eye doctors absorb this monetary loss, recognizing that many other procedures they perform are generously reimbursed. After all, ophthalmologists in the United States have an average take-home pay exceeding $400,000 per year. Medicare underpays for some services and overpays for others. Things work out well for ophthalmologists in the long run.

But some private equity firms, in pursuit of maximal profits, are not happy with this lose-money-on-some-things-make-money-on-others business model. When these firms purchase ophthalmology practices, many reduce patient access to retinal detachment procedures. Overall, private equity-owned retinal practices perform 20% fewer such procedures than they would have otherwise performed. Here is a picture of that decline:

Fewer emergency surgeries after private equity acquisition

Health Affairs

There is a relatively simple fix for this, of course. Medicare should increase reimbursement for the procedure. At the same time, it should reduce reimbursement for other procedures, where the money it pays exceeds the true cost of the procedure.

Unfortunately, while ophthalmologists would love higher reimbursement for retinal detachment surgery, I expect they would push back hard on commensurate cuts in reimbursement for other ophthalmology services. Highly paid physicians like ophthalmologists give lots of money to powerful lobbying groups, and those lobbyists push hard on elected representatives to promote their member’s interests.

The ophthalmology community should come together to help Medicare design a revenue neutral fix for this problem. Ophthalmologists will continue to do well, and we will not face misaligned incentives that threaten the availability of physicians in times of emergent need.