Newport Beach, California based ALPHAEON™ Corporation (, a wholly-owned subsidiary of private equity investor Strathspey Crown Holdings LLC, is on a mission to break new ground. A self‑proclaimed ‘lifestyle healthcare company’, they are making their mark by acquiring innovative technologies and products that, in their words, ‘promote patient wellness, beauty, and performance’.

In the ALPHAEON model, physicians own a substantial share of the company, and they are the ones who decide which products to acquire or develop, based on their clinical practices and years of expertise. The decision-making process is put back into the physicians’ hands, which seems to be striking a chord with many of them.

Doctors as investors

American doctors are growing frustrated with the prognosis of The Affordable Care Act, called ‘Obamacare’, which is causing them to look for new ways to maintain their income in light of changes in payment schedules from insurance claims. This is a great motivator for doctors to look favourably on a self-pay model, especially one that is promising freedom of choice and big returns.

ALPHAEON has positioned itself to capitalise on the fears doctors have of being squeezed financially and losing control. In the US at least, the proverbial Bermuda Triangle of health care includes Stark Law, HIPAA, and the dreaded Sunshine Act. Stark Law governs physician referrals and payments for those practices, HIPAA (Health Insurance Portability and Accountability Act) regulates patient privacy, and the Sunshine Act requires manufacturers of drugs, medical devices, and biologicals that participate in US federal healthcare programmes to report payments, gifts, trips, and even meals given to physicians and teaching hospitals. Physicians are expected to be transparent to anyone who asks — including patients — about the sources they rely on for information about medical innovations and new evidence, their role in medical research, and any relationships they have with industry that could affect their decisions.

This increasing level of regulation has instilled growing contempt for the eroding power over the way they practice in the hearts and minds of physicians of all specialties. Although most aesthetic practitioners are not directly impacted by the sweeping changes in private insurance and Medicare, ophthalmologists are the hardest hit, and the new laws are affecting the healthcare industry as a whole. So it’s no wonder that ALPHAEON is attracting board-certified specialists in their areas of expertise who strive to provide high quality care to their patients.

Leading cosmetic dermatologist Mary Lupo, from New Orleans, Louisiana, was Investor #4. ‘There were four dermatologists, all women, who were among the first 10 investors,’ she said. ‘I saw this as an opportunity for me to invest in something that I could have active involvement in, rather than being just a passive investor. I was also motivated by what is happening with regulations that continue to micromanage how companies can interact with their physician customers. My interest was originally borne out of frustration with that climate, and by being told that I cannot be paid fairly for what my time away from the practice is worth. We are about to undergo a seismic change in this industry and this will be a platform where we can still have innovation because the government will not be our customers. When CMS (Centers for Medicare and Medicaid Services) is a payer, it dictates the rules.’

She continued, ‘I was intrigued by the excitement of working with leading plastic surgeons, facial plastic surgeons, and oculoplastic surgeons, who I have much more in common with than dermatopathologists, for example. By being involved in a company like ALPHAEON, we can bring innovative products to market for the cash pay sector of medicine. We are a few years ahead of where I thought we would be at this point, and I am impressed with how quickly ALPHAEON is making acquisitions. I feel like I have more control about how my future will be guided, and I am very impressed with the forward-thinking of the early investors.’

ALPHAEON investor and General Partner, Louisville, Kentucky plastic surgeon M. Bradley Calobrace, is equally frustrated with how practicing medicine is changing.

‘ALPHAEON represents, for me, the ability to reestablish a positive relationship between the physician and industry manufacturers and product vendors. That relationship has suffered due to the ever increasing restrictions on the ability of our vendors to maintain close ties to their customers. The partnership between the physician and the industry has been critical in product innovation and expansion of new ideas in the lifestyle healthcare arena,’ he said.

‘Physicians find themselves relegated to pushing the products industry has acquired or developed, but we really have not been at the table helping to innovate the products or to decide which products, devices, or procedures will benefit the patient best. The physician’s role has been diminished, and I think patients suffer because of it. By focusing solely on lifestyle healthcare and fee-for-services only, with no third party payers, we have re-engaged the physician back into the equation,’ said Calobrace. ‘It just makes sense.’