The Economics of Laser Cataract Surgery

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Many patients want improved refractive outcomes and are willing to pay for it. Will it work for your facility?


laser cataract surgery PATIENT FOCUS William L. Soscia, MD, prepares a patient for laser cataract surgery at the Center for Sight, in Sarasota, Fla.

It's pretty simple, really. Given the choice, no one wants less-than-perfect eyesight. That obvious truth is at the heart of a burgeoning and relatively new enterprise: cataract surgery that doesn't just blow away the clouds, it blows away the years. When all goes well, eyes get restored to their original factory settings, glasses get put away in junk drawers and contact lens solution is left to quietly expire under the sink.

Laser cataract surgery is a godsend for patients and for eye surgeons, who for years have endured shrinking reimbursements for standard cataract treatments. No, Medicare and most private insurers won't pay for first-class vision enhancement, but an increasing number of patients will.

"People use their vision every single waking moment of every single day of their lives," says James Dawes, MHA, CMPE, COE, chief administrative officer at the Center for Sight in Sarasota, Fla. "When you look at the cost, over the lifetime of a patient, we're only talking about a few dollars a day."

The procedures, says Mr. Dawes, represent a perfect value equation: an additional revenue stream for providers, enthusiastic patients who spread the word and resulting goodwill that further improves the bottom line.

"The No. 1 impact is that our patients are much happier," says Mr. Dawes. "And when they're happier, they tell other patients, because they now have dramatically improved lifestyles. They're seeing without glasses. That happiness spreads and manifests itself in the other parts of our practice, whether it's glaucoma or retina or primary eye care."

Good, better, best
Cataract patients at the Center for Sight have 3 choices: The top of the line is the "Advanced Vision" package, which costs $3,295 per eye and is designed to eliminate the need for corrective lenses. It includes the femtosecond laser, a multifocal IOL, an LRI or astigmatic treatment, and, if necessary, LASIK enhancement.

The intermediate package is called "Custom Vision," which runs $1,695 per eye and is designed to dramatically improve distance vision for patients who don't mind using glasses to read. "We treat the patient's astigmatism with an LRI or a toric lens, or maybe we treat the astigmatism with the femto laser," he says. "We also use the femto laser to do cataract surgery and LASIK enhancement, if necessary."

And for patients who feel they can't — or don't want to — pay out of pocket, there's basic cataract surgery. "We don't use the femtosecond laser for that, we don't treat their astigmatism, we don't use a special lens," says Mr. Dawes.

The route a given patient chooses isn't conducive to a spur-of-the-moment decision, of course. As such, among the many factors that figure into pricing are the considerable resources the center spends on educating patients.

"We have 7 patient care counselors who work with our patients," says Mr. Dawes. "There's a lot you have to do to educate patients about these options and what's covered and not covered. It takes a lot of resources from the practice side, resources that when all of us were just doing straight cataract surgery, we didn't really have to worry about. People came in, you did their surgery and they went home. This is a much more complex process."

The difficulty includes having to explain to many patients that they're going to have to dig into their own pockets. "The biggest challenge we face is patients being surprised by the fact that not all of their cataract surgery is going to be covered by Medicare," he says. "For the most part, patients don't understand what their insurance coverage is, and they're surprised. So how do you educate them? It's a complex process and it involves everything from print patient collateral to e-mail education, video education, web education and social media."

cataract surgery

'You're the doctor'
Of course there's always the possibility that a given patient will be overwhelmed by the sheer volume of information, says Karl G. Stonecipher, MD, director of the Laser Center in Greensboro, N.C., which offers similar advanced treatments. "I used to spend 30 minutes going through all the variables, covering every possible detail, only to have people say, 'You're the doctor. What do I need?'" says Dr. Stonecipher.

Eventually, he boiled the discussion down to 2 questions: "I say, 'You've come to me for a consultation. You've determined you have a problem. You can't see because of cataracts. Do you want to be without glasses?' Usually about 60 to 75% say they would like that. The second question: 'Are you willing to pay extra?' If yes, we can move forward."

He's careful not to make assumptions about what the answers will be. "With a lot of patients, you think they can't afford some type of premium channel," he says. "But it turns out they can."

The biggest obstacle, says Dr. Stonecipher, is what happens when older patients go home and tell their offspring what they've decided. "Unfortunately, the people who most often put an end to the plans are the children. They say, 'Don't spend my inheritance. You're 83 years old, you don't need this.' Patients go home after deciding to have the procedure and then they get talked out of it."

The best preemptive strike may be to include families in the decision-making. "We typically bring patients' families in with [the patient]," says Mr. Dawes. "We encourage as many people to be involved in the decision as possible. It's better to get everybody on board from the beginning."

Setting the price
When it comes to setting prices, there are many factors to consider, says Mr. Dawes — among them lenses, the surgeon's time, staff time, equipment costs, and both pre- and post-operative costs. Then, of course, there's the question of what patients are willing to pay.

"I periodically have done focus groups to determine what kind of value people place on being able to see without glasses after cataract surgery," says Mr. Dawes. "That's one of the ways we've set our pricing. Because we're one of the leaders in the market and the country in terms of offering these new types of products, we don't always have competitors to gauge ourselves against. So I've found it most productive to talk to potential patients and get their direct feedback."

Once the prices are set, they're set. "We don't discount. They're set in stone," he says. The hardest part was getting started. "It requires a lot of effort and time, days with sleeves rolled up and the commitment to make things work."

And now? "If everything is properly executed, all of the tools that go into creating a refractive cataract surgery program will definitely pay for themselves," says Mr. Dawes. "It's all about the patient. Make the patients happy and everything else will work itself out."

THE OUTSOURCING OPTION
The Simple Way to Add Laser-Assisted Cataract Surgery

pay per-procedure DELIVERING DISCOUNTS Sightpath Medical lets you pay a per-procedure rate instead of having to buy equipment.

Looking for affordable access to in-demand femtosecond technology? Consider partnering with a mobile cataract outsourcing company to bring everything you and your surgeons need for a successful case day, including the femtosecond laser, manufacturer-certified technicians, surgical supplies, training and clinical support.

Laser cataract surgery can be profitable, but only if the volume of potential business is large enough to justify the capital outlay, which is considerable if you're planning to buy your own equipment. Those economic factors probably play a large part in why mobile femtosecond laser cataract surgery is catching on. Sightpath Medical (sightpathmedical.com) says 100 facilities in 30 states are using its mobile femtosecond laser suite for cataract surgery (known as MoFe, for mobile femto for cataract) less than a year after its launch. Vantage Outsourcing (vantageoutsourcing.com), another prominent player in cataract outsourcing, says it plans to provide the femtosecond technology "at a cost-effective price point while allowing for greater versatility" sometime this year.

Sightpath engineers will deliver the machines to your facility the night before your scheduled procedures and set everything up for you. In return, you'll pay a pre-negotiated, per-procedure fee.

The arrangement is ideal for someone like Peter Kohler, MD, whose Eye Center of Central Maine in Waterville, operates in a comparatively sparsely populated area and does advanced procedures on 2 Mondays a month. "The surrounding towns have a population of maybe 30 or 40,000 people," says Dr. Kohler. "I didn't feel comfortable going out on a limb and buying the equipment, not knowing what the volume was going to be."

Sightpath asserts that to break even after buying a femtosecond laser, you need to perform 23 cases a month. By contrast, it says, you can generate a profit with 10 cases a month using its service.

"The volume has actually been greater than I expected," says Dr. Kohler. "I'm probably in the gray zone of 20 or 25 cases a month, which might just about justify the purchase of a laser, but I still like the convenience of having a trained engineer come in with his or her experience to run it. I don't have to store the machine or worry about maintenance. There's no insurance. I have access to their marketing tools. There are a lot of not-so-obvious layers to the arrangement that make it very desirable for me."

Dr. Kohler's association with the company goes back to 1998 — "even before it was called Sightpath," he says — and he says the arrangement has been "incredibly seamless," even though Maine winters can challenge the hardiest travelers.

"Out of 15 years, the weather has been an issue maybe a couple of times," he says. "The important point is that the Sightpath model enabled me to gain access to this expensive technology and offer it to my patients in rural Maine. I can offer my patients cutting-edge technology right here in small-town America."

— Jim Burger