OVERSIGHT Sightpath engineer Dave Coon (rear) assists Andy Dvorak, MD, in a laser cataract case at Dillman Eye Care Associates in Danville, Ill.

Mondays and Tuesdays are laser cataract surgery days at the Gainesville (Ga.) Eye Center. Except the surgery center doesn't own a femtosecond laser. Nor does it employ a tech for bladeless cases or stock IOLs. An outsourcing company provides all that: equipment (though the femto laser remains onsite at the ASC), skilled labor and supplies. "Their technicians come in and help with the cataract surgeries, which is easier for me, because I don't have to worry about providing or training techs," says Becky Burnett, RN, BSN, the center's clinical director. "They also take care of all the maintenance and supplies, so I don't have to worry about it."

Yes, the cataract outsourcing business isn't what it used to be. What started a decade or so ago as a fairly straightforward premise — providing phaco machines and microscopes and the technicians to help run them to facilities that wanted to host cataract cases without upfront capital equipment costs — has evolved. Now, leading cataract outsourcing companies like Sightpath Medical and Vantage Outsourcing are doing much more. They're renting out femtosecond lasers as well as phaco machines. They're also providing disposable supplies, managing maintenance contracts and even working with facilities that own their own femto lasers to help them manage costs and turn laser cataracts into a profitable enterprise.

"They may own the equipment, but not feel they have the technical expertise to do the cases," says Christopher Swing, CFO of Vantage Outsourcing. "That's one of the things we add — that technician who spends 12 to 18 days a month in surgery and works alongside cataract surgeons everywhere."

Perfect opportunity
In the pre-femto days, "life was pretty simple" for ophthalmologists, says Joel Gaslin, executive vice president of sales and marketing for Sightpath Medical. "Most facilities were accustomed to buying a phaco machine for $45,000 to $50,000." Granted, they also needed a microscope and maybe a backup phaco, and they'd have other ongoing expenses, "but it took maybe a quarter of a million dollars to get in the game," says Mr. Gaslin, "and they'd be able to do reimbursed procedures."

The femto laser complicated things, with its hefty $375,000 to $400,000 price tag, its $300 per-click fee, its $50,000 annual maintenance contract and the accompanying requirement that patients pay out of pocket for the bladeless procedure. Needless to say, there was a lot for facilities to think about. "They looked at it and said, 'Gosh how do I make this work?'" says Mr. Gaslin. "There's a limited appetite for how much you want to spend on this stuff. Yet you want have the new tools and toys and be able to offer the most up-to-date technology to your patients."

The quandary offered a perfect opportunity for mobile cataract services companies. They'd supply the femto lasers. All the facilities had to do was schedule all their laser cataract patients on a given day (or days) each month.

Minimizing risk
But both Sightpath and Vantage have seized the opportunity to go beyond that initial premise. Now they pride themselves on being as flexible as possible. Their focus depends on what customers need, says Mr. Swing. "That's really what our business is — it's a service beyond anything else."

Mr. Gaslin agrees: "We're like the Geek Squad at Best Buy. People realize: 'OK, I've bought this technology, now what do I do with it? How do I make it work for me?' It's a very complicated device to run, and if you're not doing a lot of volume, you get people saying: 'Who's going to run this today? I don't really want to run it.'"

The idea is to mitigate both technical risk and financial risk, he says. "I think of our business more as a service. It's a different way to access technology," says Mr. Gaslin. Sightpath, he says, now has a significant number of "fixed accounts, where we have equipment that lives there, and we provide some level of staffing for inventory management, as well as for managing the equipment and warranties."

Flexibility can be key for a customer like the Allied Physicians Surgery Center in South Bend, Ind. "We used an outsourcing company for years and years, but we got so big here, we opted to purchase our own machine," says administrator Charles Strasser, RN, CASC. So big, in fact, that Allied Physicians is now considering acquiring a second laser, and mulling the potential advantages of again partnering with an outsourcing company. "They seem more flexible now," says Mr. Strasser. "They're actually willing to place it in our facility and train one of our technicians to run it. That way we can use it when we want it and we'll have our own in-house technician."

Such an arrangement would also provide for a trial period, a chance to see whether volume will be sufficient to justify that second femto. "If we buy something and end up not having the volume, we're stuck with the machine," says Mr. Strasser. But by using an outsourcing company and simply paying the patient interface, or per-click fee, "we can have them pull it out after a year if the volume isn't there," he says.

Familiarity breeds expertise
Intimate familiarity with the equipment is a key commodity both companies provide. "That's the need that a lot of facilities are using us to fill," says Mr. Swing. "At first, they have this serious concern about paying somebody to bring in a piece of equipment instead of just buying it themselves. But what they find is that the technical expertise is a huge advantage."

Surgeons, he says, equate the support they get from outsourced technicians with the trained staff they have available at hospitals and larger facilities. "It kind of levels the playing field," says Mr. Swing.

STEP BY STEP An outsourcing technician provides valuable technical expertise to the surgeon.

Understanding costs
The real costs associated with providing laser cataract surgery can be tough to fathom, say both Mr. Gaslin and Mr. Swing, which opens the door for additional value-added service. "Profitability is what matters, and that's our battleground — helping people determine all their costs," says Mr. Gaslin. "Manufacturer reps will come in and say, 'If you do X amount of cases, you can break even.' Our tongue-in-cheek response is to point out that if someone were offering you an investment, and said, 'Give me $375,000 and 5 years later, after doing a bunch of work, you'll break even,' you'd laugh at them. But in the medical world we sometimes think that's a good deal."

A rep, he says, may provide a pro forma on a femto laser, based on 12 monthly payments and projected volume. "But physicians take time off — usually 8 to 10 weeks a year. And that changes the math," Mr. Gaslin points out. "It's not 12 months a year; it's 10. We have an app that takes into account vacations and the fact that someone has to run the device. There are also marketing expenses and other factors. We help people capture all costs, so they make good comparisons."

"Most people don't understand what equipment costs do to their per-case profitability," adds Mr. Swing. "They buy equipment out of capital budgets, and look at a profit-and-loss statement, which usually doesn't indicate depreciation. But their per-case cost can be pretty astronomical when you add in maintenance and other costs."

Facilities also forget to consider their transactional costs, he says — the cost of having somebody sit down and write a purchase order, of receiving supplies and putting them on shelves, of getting those supplies back off the shelves, of dealing with back orders, of coordinating with surgeons when there are back orders and deciding what products to use, of knowing where to get those products, and so on. "We eliminate those ridiculous costs, because they know exactly what their cost per case is when they use us," says Mr. Swing.

The outsourcing companies also provide a broad range of supplies, including microscopes and disposables — another key area to consider, says Mr. Swing. "As facilities become more focused on their costs, they're starting to realize how much product they destroy — through expiration, mishandling or contamination," he says. "That's something we eliminate with our process. Because we have a wide client base all over the country, if we have something that's close to expiring, we know where to put it to be able to use it."

Looking ahead
What's next? Maybe a kind of hybrid arrangement in which facilities that own their own equipment have the ability to periodically expand and contract according to their needs. "That's an interesting thing we're seeing, the opportunity to have an extra room periodically," says Mr. Gaslin. "They have their own supplies and agreements, but we can bring in everything for another room — instruments, a highly skilled technician, a machine and a microscope. It's a way to periodically take advantage of the potential to book more patients." OSM