BUSINESS: Retailers A Steady Acquisition Pace Creates a Multi-State Medical Eyecare Model By Marge Axelrad Monday, May 15, 2017 12:00 AM Kelly McCrann, EyeCare Partners’ CEO, said the group is expanding to “optimize” eyecare practices. BALLWIN, Mo.—A sustained pace of acquisition and integration has created a new Top 10 U.S. Optical Retailer on this year’s signature Vision Monday report—EyeCare Partners LLC. Based on 2016 sales, the group’s eyecare practices, consisting of both major regional “hubs” and multiple independent OD and MD office “spokes,” numbered 230, generating collective sales of $275 million. As of early May 2017, Eye-Care Partners is already at 250 locations—with more acquisitions on the way, executives said. EyeCare Partners’ activities and philosophies represent the consolidation, backed by the capital resources of major private equity firms, happening throughout vision care, mirrored by similar developments in other health care specialties. The company’s view is to bring systems expertise, training, buying and merchandising efficiencies along with daily business management and capital to support eyecare professionals who want to focus more directly on patient care. In an exclusive VM interview, EyeCare Partners’ new CEO, Kelly McCrann, emphasized the view of the executive team which is reaching out to prospective new partners and establishing an infrastructure along with internal service support teams to help them achieve what he describes as “optimized” practice. McCrann, an experienced health care management and strategy exec who joined the group in the CEO role 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. The prior year, Clarkson itself had acquired 19-unit Cincinnati-based Thoma & Sutton. Subsequently in July 2015 as VM reported, 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 operation. 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 told VM, is to incorporate both ODs and MDs where it makes sense in a market. ECP’s current hubs and locations include: • 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 Larger ECP acquisitions, regional groups like Clarkson, EyeCare Associates, eyecarecenters, Rinkov and others, act as “hubs” to different regions. Noted McCrann, “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. “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. 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?’” He added, “We look for practices with the capability to grow; sometimes they’ve done some operational things and other times we can help them start from scratch. The main EHR system we utilize is our own Eyecare 360 platform which was developed by Clarkson and is proprietary to us, continuing to evolve. “Another place we help is in the optometric dispensary,” McCrann noted. “We typically improve the range of products in the office, help to enhance the merchandising. We take 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.” 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. Emphasized McCrann, “One thing that’s different about us is our philosophy to be full-scope optometry partners, as contrasted with retail optical, which is fine but not our thing. And our deal structure is responsive to the conversations we have. EyeCare 360 “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 concluded.