BALLWIN, Mo.—As new challenges arise for eyecare professionals—everything from the rising cost of information technology investment to an evolving health care landscape—the notion of swifter consolidation among both regional and independent ECP practices is gathering momentum.
One such player in this business and health care trend is EyeCare Partners LLC, which almost doubled in size last year and now ranks as No. 9 on the Vision Monday list of Top 50 U.S. Optical Retailers with annual sales of $275 million. EyeCare Partners (ECP) operated more than 250 locations as of early this month, up from 230 at the end of 2016. The company’s philosophy is to manage the business via a framework of major regional “hubs” and multiple independent OD and MD offices, or “spokes.”
“Our growth really speaks to the dynamics of the optometry space now, where many developments, from the demands for top line IT, changes in the health care world and other competitive issues all contribute to challenges for traditional business owners, EyeCare Partners’ new chief executive officer Kelly McCrann told Vision Monday in an interview. He emphasized that ECP’s executive team is able to provide prospective new partners the infrastructure and internal service support that leads to what he describes as the “optimized” practice.
He also acknowledged that more acquisitions in the sector are on the way.
Backed by the capital resources of major private equity firms, companies such as ECP are in position to lead this consolidation across optical over the next few years. This trend already has brought about a change in other health care specialties, such as the dental marketplace. Typically the consolidator’s see their role as one that enhances systems expertise, training, buying and merchandising, while also assisting with the daily business management and capital requirements that are needed by eyecare professionals who want to focus more directly on patient care.
Kelly McCrann and EyeCare Partners offices.
and McCrann, an experienced health care management and strategy executive who was named CEO of EyeCare Partners at the end of last year, stated, “We are a capital and operating partner to exceptional medically focused, full-medical scope optometry offices.”
Within his varied health care operations background and financial experience with private-equity backed firms, McCrann was active in starting and managing several dental practice groups over the years, including time as president of PacifiCare Dental & Vision.
EyeCare Partners (ECP) began two years ago, in April 2015, when private equity firm FFL Partners invested in St. Louis-based Clarkson Eyecare group, which had 63 locations at that time. Clarkson had acquired 19-unit Thoma & Sutton of Cincinnati in 2014.
In July 2015, ECP acquired EyeCare Associates’ 19 offices in Alabama and then acquired eyecarecenters, with 61 offices in North and South Carolina.
Today, these are four of the major groups which are serving as regional hubs for the EyeCare Partners’ operations.
Those hubs are leading medical eyecare practices, most of which are optometry-oriented, while some are ophthalmology focused. Individual offices are brought into the hubs as “spokes.” The longer-term vision, McCrann said, is to incorporate both ODs and MDs where it makes sense in a market.
The current lineup of key ECP hubs and their locations are:
- Clarkson Eyecare (Mo./Ill./Fla.) In 2016: 9 acquisitions (1 MO, 8 FL) for 74 total locations
- Thoma & Sutton Eye Care (Ohio) 18 locations
- EyeCare Associates (Ala.) In 2016: 3 acquisitions for 24 locations
- eyecarecenters (N.C.) In 2016, 6 acquisitions for total of 29 total locations
- Rinkov Eyecare Centers (Ohio) In 2016, 11 locations, new group to ECP in 2016
- EyeCare Associates of Kentucky (Ky.) – 6 locations, new group to ECP in 2016
- Eye Elements (Ga.) – 5 locations, new group to ECP in 2016
- The EyeDoctors Optometrists (Kan.) – 19 locations, new group to ECP in 2016
- Quantum Vision Centers (Mo./Ill.) – 27 locations, new group to ECP in 2016
- Ophthalmology Consultants (Ill.) – 6 locations, new group to ECP in 2016
“Oftentimes, firms like ours have a large development team, but at EyeCare Partners, our partner docs in each of the hubs can speak to colleagues and friends to make connections and have conversations,” McCrann said in the interview with Vision Monday. “And we are getting a lot of inbound inquiries.
“We work with brokers, too. But our main interest is in two key areas—operations and financials. What are the support services we can bring to them and what would life be like for their practices if they partner with us? We ask, ‘how do we make life better?’”
The current lineup of key ECP hubs.
EyeCare Partners also attempts to help new offices in the group improve the optometric dispensary, McCrann said, by enhancing the range of products and improving merchandising efforts in a collaborative approach. “We serve partners and patients in 250 locations today, representing a broad range of geographics, demographics and socio economics, so a singular product image makes no sense,” he added.
Among the resources that EyeCare Partners can bring to a practice are marketing, medical technology investment, improved IT systems, significant marketing, social media and CRM support, lab support, revenue cycle management, call centers, HR and staff benefits. James Wachter, OD, co-chairman of ECP, is chief professional officer and interacts with doctor teams as well.
McCrann also emphasized that, in EyeCare Partners’ unique approach, the philosophy is to be full-scope optometry partners in contrast with retail optical, “which is fine but not our thing. And our deal structure is responsive to the conversations we have,” he explained.
“Our partners are not just older practitioners, who in years past may have exited their practices by selling to a younger associate. Today, people are graduating schools with a lot of debt and are not in a position to do that. But the nature of practice is evolving out there—the total sale of a practice is not always appealing to a 45-year-old practitioner. So we are talking to early-stage and mid-stage eyecare professionals as well.”
McCrann sees much more opportunity for continued EyeCare Partners’ growth. “In my experience in dentistry, after 20 years of activity, the investment by capital/services organizations only penetrated the high teens or 20 percent of the market, though it continues to evolve.
“ECP has virtually quadrupled in size in two years. For us, I think it would be reasonable to be in the neighborhood of a collective 300 practices by the end of this year. Down the road, my aspiration would be to quadruple again, and maybe reach 1,000 practices.
“Among both optometry and ophthalmology—we think it makes good clinical practice to integrate the two, foster more collaboration, which also results in a better clinical experience for the patient,” McCrann said.