Valuing Ophthalmology Practices in 2026: A Comprehensive Guide for Ophthalmologists, Owners, Investors, and M&A Professionals

Ophthalmology practices represent one of the most active segments in physician practice M&A, driven by favorable demographics, strong procedural revenue, and ancillary service opportunities that generate stable cash flows. Practices range from small general ophthalmology offices focused on medical eye care and routine vision services to large surgical platforms performing high volumes of cataract surgery, refractive procedures, and retinal treatments, often with in-office ASCs and optical dispensaries. While all ophthalmology practices benefit from an aging population and rising demand for vision care, their operating models, revenue mix between medical and surgical services, and reliance on ancillary income streams create distinct valuation considerations for sellers, buyers, and investors. Whether you're preparing to sell an ophthalmology practice, evaluating a partnership with private equity or a hospital system, or seeking to benchmark financial performance, this article explores the key valuation methodologies, drivers, and risk factors that determine the worth of an ophthalmology business.

Whether you're preparing to sell a ophthalmology practice, evaluating a partnership opportunity, or seeking to benchmark financial performance, this article explores the key valuation methodologies, drivers, and risk factors that determine the worth of a ophthalmology practice.

I. Industry Context: Why Ophthalmology Practices are in Demand

Ophthalmology practices are in high demand due to the convergence of demographic trends, procedural profitability, and diversified revenue streams that create compelling investment opportunities for both strategic and financial buyers. The aging U.S. population, particularly the growing cohort of Baby Boomers reaching peak years for age-related eye conditions such as cataracts, glaucoma, and macular degeneration, drives sustained demand for both medical eye care and surgical interventions. From a financial perspective, ophthalmology offers some of the highest reimbursement rates and profit margins in outpatient medicine, especially for high-volume cataract surgery and premium intraocular lens procedures that combine insured surgical fees with patient-paid upgrades. Practices with in-office ASCs, optical dispensaries, and ancillary services such as imaging and injections generate multiple revenue streams beyond professional fees, creating operational leverage and recurring income that enhance practice valuations. Private equity and corporate platforms view ophthalmology as particularly attractive because successful practices can scale efficiently through de novo locations, tuck-in acquisitions, and standardized clinical protocols while maintaining strong provider productivity and patient loyalty. Overall, the combination of demographic tailwinds, procedural economics, ancillary income potential, and scalability makes ophthalmology practices one of the most sought-after segments in healthcare M&A.

Key Growth Drivers

Key growth drivers for the industry include the following:

• Demographics & Aging Population: Rapid growth in the 65+ population, with Baby Boomers entering peak years for cataracts, glaucoma, AMD, and diabetic retinopathy; increasing life expectancy extends the duration of vision care needs.

• Technology & Procedural Innovation: Advances in surgical techniques (femtosecond laser-assisted cataract surgery, minimally invasive glaucoma surgery), premium IOL options, diagnostic imaging (OCT, fundus photography), and emerging gene therapies expand treatment capabilities and drive patient demand for cutting-edge care.

• Premium & Elective Procedure Growth: Rising patient willingness to pay out-of-pocket for premium IOLs, LASIK, refractive lens exchange, cosmetic procedures (blepharoplasty, Botox), and enhanced surgical experiences, creating revenue streams independent of insurance reimbursement pressures.

• Chronic Disease Prevalence: Increasing rates of diabetes and associated diabetic retinopathy requiring ongoing monitoring and anti-VEGF injections; growing prevalence of myopia and other refractive errors driving demand for corrective interventions across all age groups.

• Vertical Integration & Ancillary Services: Expansion of in-office ASCs, optical dispensaries, diagnostic testing centers, and co-managed care models with optometrists, allowing practices to capture more of the care continuum, increase per-patient revenue, and build referral networks that sustain long-term growth.

Reimbursement Outlook

Ophthalmology reimbursement trends for 2026 reflect a challenging environment in which the Centers for Medicare & Medicaid Services (CMS) finalized a conversion factor increase of 3.26% to $33.4009 for most physicians, driven largely by a temporary 2.5% statutory increase from the One Big Beautiful Bill Act, though this gain is substantially offset by an 11% reduction in Medicare payment for cataract surgery (CPT 66984) from $521.75 in 2025 to $462.94 in 2026 due to a -2.5% efficiency adjustment to work RVUs and reduced practice expense values for facility-based procedures. The overall impact varies dramatically by practice setting and service mix, with significant payment reductions for procedures performed in ambulatory surgery centers and hospital outpatient departments (where the facility-office payment gap widened from 7% to 18% for YAG capsulotomy and from 11% to 26% for panretinal photocoagulation), while office-based services see modest increases, creating strong financial incentives for practices to shift procedures to office settings where operationally feasible. Practices face ongoing pressure from Medicare Advantage plans, which now enroll 54% of eligible Medicare beneficiaries and are implementing stricter utilization management practices including faster prior authorization timelines (7 days for standard requests, 72 hours for expedited requests) and enhanced transparency requirements as CMS tightens oversight to reduce administrative delays and improve patient access. Looking ahead to 2026, the outlook remains cautiously optimistic for well-diversified practices that can leverage office-based surgical capabilities, premium IOL upgrades, and high-margin ancillary services to offset reimbursement pressures, but surgical practices heavily dependent on facility-based cataract procedures may face significant margin compression as the temporary conversion factor increase expires after one year and regulatory dynamics continue to favor office settings over surgical facilities.

II. Top Reasons to Get a Valuation of Your Ophthalmology Practice

The following is a list of common reasons for commissioning a valuation analysis or appraisal of an ophthalmology practice:

1. Preparing for a Sale or Strategic Partnership

• To establish a defensible asking price when marketing the business

• To evaluate offers from private equity, strategic buyers, or joint venture partners

• To understand how your practice compares to market benchmarks

  
  

2. Internal Ownership Transition

• For buy-in or buy-out of partners or associates

• To support fair and compliant equity allocation among clinicians

• To plan for generational succession or family transfers

3. Compliance with Healthcare Regulations

• To support Fair Market Value (FMV) and Commercial Reasonableness (CR) assessments required by Stark Law and Anti-Kickback Statute in deals involving ownership by other healthcare providers

• To document compliance in joint ventures, especially when there is a referral relationships (hospitals, ancillary service providers, or physicians)

  
  

4. Estate & Tax Planning

• For gift or estate tax reporting to the IRS (especially for closely held businesses)

• To support asset protection strategies

• To plan for long-term wealth transfer or charitable contributions

  
  

5. Litigation or Dispute Resolution

• For divorce proceedings involving business asset division

• In shareholder or partnership disputes

• For economic damages assessments in legal proceedings

  
  

6. Business Planning & Strategic Growth

• To establish a valuation baseline for performance benchmarking

• To support capital raise, refinancing, or line-of-credit applications

• To identify value drivers and areas for operational improvement

III. Valuation Approaches for Ophthalmology Practice

Valuation professionals typically apply three core methodologies to estimate the value of an ophthalmology practice:

Income Approach (Discounted Cash Flow or Capitalization of Earnings)

This approach values a business based on the present value of its expected future earnings or cash flows. It’s most appropriate when a practice has a stable operating history and predictable future performance.

Key assumptions include:

• Normalized EBITDA or owner’s discretionary earnings

• Growth rate assumptions (organic and acquisitive)

• Risk-adjusted discount rate (typically 10–25% for ophthalmology)

• Capital expenditure needs

Pros: Based on the business’ future earning power

Cons: Sensitive to forecasting errors and discount rate subjectivity

Market Approach (Comparable Transaction Method, e.g. Market Multiples)

This method uses observed EBITDA multiples or revenue multiples from recent M&A transactions or public companies in the ophthalmology space. Typical multiples for small to medium -sized ophthalmology practices are within the range of 4x to 8x EBITDA, depending on a wide variety of factors.

This article includes more details and information about ophthalmology valuation multiples.

Pros: Easy to benchmark; useful in active M&A environments

Cons: Requires access to quality private market data and careful adjustment for size, margin, geography, and a variety of other factors

Asset-Based Approach

Used only when the business is underperforming or being liquidated. The value is derived from the net assets (e.g., equipment, leasehold improvements) minus liabilities.

Pros: Useful in distressed scenarios

Cons: Intangible value of the practice can be difficult to quantify under this method

IV. Key Value Drivers in Ophthalmology Valuation

Several specific factors can materially influence a ophthalmology practice’s valuation multiple:

Earnings Quality

Buyers and valuation professionals place significant emphasis on normalized EBITDA and / or cash flow. Adjustments often include:

• Owner compensation (if above/below market)

• Non-recurring revenue or expenses

• Related-party lease arrangements

• Post-transaction adjustments

• Out-of-period adjustments

Growth Potential

Discount rates and valuation multiples are a function of perceived risk and growth. Key considerations within the ophthalmology specialty related to growth include the following:

1. Sustainable surgical volume expansion and market penetration: Valuation is heavily influenced by a practice's ability to grow cataract surgery volumes, premium IOL adoption rates, and procedural case mix over time through expanded referral networks, effective marketing to aging demographics, and capture of market share from competing providers. Practices with consistent year-over-year growth in surgical volumes supported by strong relationships with referring optometrists, primary care physicians, and retina specialists demonstrate revenue durability and scalability that commands higher multiples, particularly when growth is organic rather than dependent on unsustainable one-time factors.

2. Ancillary service development and revenue diversification: Growth potential is tied to the practice's ability to add high-margin ancillary services such as in-office ASCs, optical dispensaries, advanced diagnostic imaging (OCT, fundus photography), intravitreal injection programs for AMD and diabetic retinopathy, and elective procedures like LASIK or premium lens upgrades. Practices that successfully build multiple revenue streams beyond professional fees—capturing both the clinical and retail aspects of eye care—create operational leverage and reduce reliance on any single service line, making them more resilient to reimbursement cuts and more attractive to buyers seeking platform growth opportunities.

3. Geographic expansion and de novo capacity: The ability to scale through opening satellite locations, acquiring smaller practices in adjacent markets, or adding surgeons and clinical capacity demonstrates a practice's potential for future EBITDA growth beyond current operations. Practices with proven systems for recruiting surgeons, replicating successful office-based surgical models across multiple sites, and maintaining quality outcomes and patient satisfaction at scale are positioned to execute roll-up strategies or become regional platforms, which significantly enhances valuation as buyers pay premiums for practices that can serve as acquisition vehicles rather than standalone assets with limited growth runway.

Risk Factors

Key considerations within the ophthalmology specialty related to risk include the following:

1. Reimbursement and payer concentration risk: Ophthalmology practices face significant exposure to Medicare payment policy changes, as evidenced by the 11% reduction in cataract surgery reimbursement for 2026 and ongoing shifts toward value-based care models. High dependence on Medicare and Medicare Advantage (which now covers 54% of eligible beneficiaries) creates vulnerability to rate cuts, prior authorization expansions, and utilization management restrictions that can materially impact revenue and margins, particularly for practices heavily weighted toward facility-based surgical procedures.

2. Physician dependency and succession risk: Many ophthalmology practices are built around one or two high-volume surgeons whose personal reputation, surgical outcomes, and referral relationships drive the majority of practice revenue. The loss of a key surgeon through retirement, disability, or departure can cause immediate and severe disruption to patient volumes and cash flow, especially in markets where patients specifically seek out individual providers rather than the practice brand, making practices with thin physician benches or weak succession plans significantly riskier and less valuable.

3. Regulatory and compliance risk: Ophthalmology practices operating in-office ASCs, dispensing optical products, or maintaining co-management arrangements with optometrists face heightened exposure to Stark Law, Anti-Kickback Statute, and state fee-splitting regulations that govern financial relationships and referrals. Non-compliance with Medicare conditions of participation for ASCs, improper billing of global surgical packages, unbundling of diagnostic testing, or questionable medical necessity documentation for procedures like YAG capsulotomy or premium IOLs can trigger audits, recoupments, civil monetary penalties, or exclusion from federal programs, materially reducing practice value and creating deal-breaking due diligence issues for buyers.

V. Current Market Trends in Ophthalmology M&A

Ophthalmology M&A activity peaked in 2021-2022 with record deal volumes driven by private equity's aggressive entry into the specialty, during which 245 ophthalmology practices were acquired between 2012 and 2021, and 2022 alone saw deal activity reach historic highs before moderating in 2023 amid rising interest rates and economic uncertainty. Transaction volume declined approximately 17% from 2022 to 2023 as the market entered a more mature phase characterized by fewer new platform formations and more add-on acquisitions by existing private equity-backed platforms, though the sector experienced a resurgence in 2024-2025 with over 40 transactions completed and a notable shift toward corporate conglomerate buyers such as Cencora's $4.6 billion acquisition of Retina Consultants of America and McKesson's acquisition of PRISM Vision Group, signaling new strategic interest beyond traditional PE buyers. Despite the slowdown from peak volumes, ophthalmology remains one of the most active and resilient physician practice M&A segments, with approximately 70% of ophthalmologists still practicing independently as of 2024, leaving substantial runway for continued consolidation as buyers pursue regional density strategies, multi-specialty integration, and platform recapitalizations in a normalizing interest rate environment.

Ophthalmology EBITDA Multiple Trends

Larger ophthalmology practices typically command higher EBITDA multiples than smaller independent clinics due to their scale, diversified revenue base, and reduced operational risk. These platforms benefit from centralized management, robust referral networks, and greater negotiating leverage with payers and vendors, factors that enhance profitability and stability. Additionally, buyers place a premium on the platform’s ability to support future growth through acquisitions or de novo expansion, while smaller clinics may be more dependent on a single provider or location. This combination of scalability, infrastructure, and lower risk profile makes larger platforms more attractive and valuable in the eyes of strategic and financial buyers.

According to our database, multiples for practices with EBITDA of over $10 million annually range from 10x to 15x EBITDA.

Cash Flow Multiples for Small Ophthalmology Practices

There are a number of small ophthalmology practices listed for sale at any given time, but it's difficult to glean much useful information from data on smaller businesses where context around the level of owner involvement is unavailable. An ophthalmology practice making $400k per year in cash flow for an absentee owner is much different from an ophthalmology practice making $400k per year in take-home for a full-time owner-operator. Our study of current and recently removed businesses for sale shows a range of multiples from 1.76x cash flow to 2.82x cash flow at the 25th and 75th percentiles, with a median of 2.23x. Revenue multiples rage from 0.6x to 1.05x at the 25th and 75th percentiles, with a median of 0.68x.

VI. Final Thoughts: Keys to Maximizing Value

If you're an ophthalmology practice owner or executive planning to explore a sale or equity partnership, consider the following strategies to enhance your valuation:

• Build and formalize surgical capacity and premium service lines: Invest in office-based surgical capabilities such as an in-office ASC for cataract surgery, establish premium IOL programs with predictable patient conversion rates, and develop high-margin procedural services like intravitreal injections for retina patients. Documenting consistent surgical volumes, premium lens penetration rates above 30%, and efficiency metrics (cases per OR day, turnover times) demonstrates scalable procedural capacity that buyers value at premium multiples.

  
  

• Diversify and strengthen referral networks beyond individual surgeon relationships: Formalize co-management agreements with optometrists, establish institutional relationships with primary care groups and health systems, and implement physician liaison programs to build sustainable referral channels that aren't dependent on a single surgeon's personal reputation. Creating documented referral protocols, tracking referral source performance, and demonstrating growth from multiple channels reduces physician dependency risk and increases practice enterprise value.

  
  

• Develop ancillary revenue streams and vertical integration: Expand beyond professional fees by adding optical dispensaries with strong capture rates, diagnostic testing services (OCT, visual fields, fundus photography), ambulatory surgery center ownership, and other ancillary services that create multiple profit centers. Practices with ancillary services representing 25-40% of total revenue demonstrate operational leverage and margin expansion potential that commands higher EBITDA multiples from buyers seeking platform opportunities.

  
  

• Professionalize management infrastructure and reduce owner dependency: Hire an experienced practice administrator, implement robust financial reporting and KPI dashboards, develop standardized clinical protocols and surgical workflows, and build a management team capable of operating independently of the owner-physician. Demonstrating that the practice can maintain performance without daily owner involvement, through documented systems, training programs, and delegation, transforms the practice from a "job" into a saleable asset and significantly increases buyer confidence and valuation.

  
  

• Optimize payer mix and demonstrate strong compliance and quality outcomes: Balance Medicare, Medicare Advantage, and commercial insurance to maximize reimbursement while minimizing payer concentration risk, maintain clean compliance records with documented policies for Stark Law, Anti-Kickback, and ASC regulations, and track quality metrics such as surgical complication rates, patient satisfaction scores, and adherence to evidence-based protocols. Practices with superior clinical outcomes, minimal compliance risk, and favorable payer economics trade at substantial premiums as buyers face less due diligence risk and can confidently project future cash flows.

About HealthFMV

HealthFMV specializes in appraising healthcare businesses and services arrangements, including ophthalmology practices.

• Business Valuation: We perform independent, third-party valuations of healthcare businesses to document regulatory, tax, and financial reporting compliance, resolve ownership disputes, and help ensure both parties to the transaction are comfortable with the financial terms.

  
  

• Transaction Advisory: We work with healthcare business owners, organization executives, providers, and their health lawyers to develop transaction structures and deal terms that further their business objectives while maintaining compliance with the complex healthcare regulatory environment.

  
  

• Services Arrangements: We prepare fair market value and commercial reasonableness opinions for a variety of healthcare services arrangements including management services, hospital-based specialty stipends, case rates and PC/TC splits, block leasing, and shared savings distributions, among others.

Contact Will Hamilton at whamilton@healthfmv.com with questions about our healthcare valuation services or to discuss your specific situation. Visit scoperesearch.co for more information about our healthcare M&A research services.