Increases in Medicare Spending and Use after Private Equity Acquisition of Retina Practices

Yashaswini Singh, Christopher M. Aderman, Zirui Song, Daniel Polsky, Jane M. Zhu

Research output: Contribution to journalArticlepeer-review


Purpose: Private equity (PE) firms increasingly are acquiring physician practices in the United States, particularly within procedural-based specialties such as ophthalmology including retina. To date, the potential impact of ophthalmology practice acquisitions remains unknown. We evaluated the association between PE acquisition and Medicare spending and use for common retina services. Design: Retrospective difference-in-differences analysis using the 20% Medicare fee-for-service claims dataset from January 1, 2015, through December 31, 2019. Participants: Eighty-two practices acquired by PE during the study period and matched control practices. Methods: We used novel data on PE acquisitions of retina practices linked to the 20% sample Medicare claims data. Retina practices acquired by PE between 2016 and 2019 were matched to up to 3 non-PE (control) practices based on characteristics before acquisition. Private equity-acquired practices were compared with matched control practices through 6 quarters after acquisition using a difference-in-differences event study design. Data analyses were performed between August 2022 and April 2023. Main Outcome Measures: Medicare spending and use of common retina services. Results: Relative to control practices, PE-acquired retina practices increased the use of higher-priced anti–vascular endothelial growth factor (VEGF) agents including aflibercept, which differentially increased by 6.5 injections (95% confidence interval, 0.4-12.5; P = 0.03) per practice-quarter, or 22% from baseline. As a result, Medicare spending on aflibercept differentially increased by $13 028 per practice-quarter, or 21%. No statistically significant differences were found in use or spending for evaluation and management visits or diagnostic imaging. Conclusions: Private equity acquisition of retina practices are associated with modest increases in the use of higher-priced anti-VEGF drugs like aflibercept, leading to higher Medicare spending. This finding highlights the need to monitor the influence of PE firms’ financial incentives over clinician decision-making and the appropriateness of care, which could be swayed by strong economic incentives. Financial Disclosure(s): Proprietary or commercial disclosure may be found in the Footnotes and Disclosures at the end of this article.

Original languageEnglish (US)
Pages (from-to)150-158
Number of pages9
Issue number2
StatePublished - Feb 2024
Externally publishedYes


  • Health services
  • Medicare
  • Private equity
  • Retina
  • Spending

ASJC Scopus subject areas

  • Ophthalmology


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