About 2 years ago, a well-known business consultant informed me that I really couldn’t afford to do cataract surgery anymore. He showed me how laser-assisted in situ keratomileusis (LASIK) is simply much more lucrative per unit of time.

I had to do some soul-searching.

Would I chase the almighty dollar or would I continue to do what I was trained to do — cataract surgery and other, more complicated procedures?

What I found, after adjusting my practice methods, is that you in fact can still make money doing an efficient cataract operation. In terms of dollars per unit time, however, there’s just no getting around it: The financial reward of providing efficient cataract surgery is far less than that of performing efficient LASIK.

On average, the national reimbursement for a cataract operation is $772.60, excluding facility fees. That number has decreased about 5% per year over the last 15 to 20 years, as you’re probably painfully aware. Yet, the number of cataract procedures grows by about 9% each year, and about 2 million cataract operations are performed in the United States each year. Something to consider if you’re thinking of getting away from offering this type of surgery.

LASIK, on the other hand, as we know, commands about $2,000 to $2,400 per eye, and we don’t have to haggle over any reimbursement issues. Some experts predict that nearly 600,000 patients will undergo refractive surgery in the United States in 1999. We’ll have to see how the numbers pan out, but it’s indisputable that this procedure is poised for tremendous growth. (See "Refractive Surgery Update.")

If you want to offer both cataract surgery and refractive surgery in the most cost-effective way possible, this article will explain how you can meet your objective. I’ll review how we succeed in our practice by using an ambulatory surgery center, key alliances and several management strategies — including the alternation of both procedures to achieve peak efficiency.

In my community, I’m honored to be referred some of the more difficult cases, and I suppose I’m seen as a resource in that regard. So I decided to continue to offer cataract surgery to my patients — despite the consultant’s advice — but only if I could regulate it, so to speak. I regulate this part of my practice by trying to perform the same number of cataract surgeries as refractive surgery procedures.

In India and other countries, sadly, many people need eye care but can’t afford it. I’ve heard a number of our colleagues in these countries say that they’ll do one free cataract procedure for every paying cataract procedure that they perform. I sometimes say — and only half-jokingly — that I do a free cataract for the United States government for every bilateral LASIK procedure I do.

I operate at two locations: a freestanding ambulatory surgery center (ASC) called the Phillips Eye Institute and my group’s own ASC, called the Minnesota Eye Laser and Surgery Center. I do about a third of my surgery at Phillips Eye and the remainder at my center.

We decided to pursue an ASC several years ago, primarily in response to anticipated reimbursement levels for cataract extraction. It became obvious to us that the physician fee was dropping to the point where the economic viability of cataract surgery was questionable.

On the other hand, the facility fee offered a cushion that could provide a satisfactory return if we could deliver cataract surgery efficiently.

The physician fee for cataract extraction in my area is $760, and will drop to about $680 next year. I expect that the fee will continue to shrink to about $500.

About half of my cataract patients are referred to me, meaning 20% of associated fees are cut out for referring doctors. Without netting a facility fee for the procedure, it would be very difficult to justify a $400 cataract operation.

So while the facilities at Phillips Eye are entirely satisfactory, we purchased the two-operating-room ASC, the Minnesota Eye Laser and Surgery Center, on the south side of Minneapolis-St. Paul. The facility fee, currently at $940 per procedure, makes it feasible for us to continue offering our patients cataract surgery.

Each of the five surgeons in our group is expected to perform cataract surgery — a much different situation than you would have found 10 years ago. At least part of the reason for that: It wouldn’t be fair to any one of us, economically, if we had to do them all.

One other important point: Anyone interested in establishing an ASC needs to give some thought to certificate-of-need requirements.

The national trend over the last decade or so has been toward a liberalization of such laws and regulations. But don’t take that for granted. It’s not a given that your ASC will automatically qualify. (See "Be Ready to Fight for Your Own ASC" at the end of this article.) Before you set too many plans in motion, be sure to consult an experienced attorney who can explain the certificate-of-need situation in your area.

I operate on Monday, Wednesday and Friday, and I see patients on Tuesday and Thursday. At least for me, that schedule — 2 clinic days and 3 surgery days — is the most efficient.

As I mentioned, about half of my cataract patients are referred to me by other ophthalmologists or optometrists. Many of these referred patients utilize what we call our See-and-Do Program.

This option lets patients who are referred to us from out of the area get examined and also receive surgery on the same day. The See-and-Do Program enhances efficiency, particularly for the patient. If someone lives 100 or more miles away, it’s inconvenient for them to come in for an exam on one day and return for surgery another day. And it’s more efficient for the surgeon to avoid this dilemma as well.

I have an office adjacent to the operating room at Phillips Eye Institute. My staff works up patients; between cases I’ll stop in and do a slit lamp and fundus exam, and confirm the referring doctor’s findings. I’ll counsel the patient and then perform the surgery. It’s a very efficient system, but obviously requires you to have an examination room next to your surgery center.

At my ASC, we’re able to set up two operating rooms to perform successive cataract procedures, alternating between the rooms. However, at both Phillips and Minnesota Eye, we have an excimer laser adjacent to the OR, and our typical approach is a mix of cataract and refractive procedures, alternating between the rooms.

In a typical hour of surgery, I’ll perform a cataract procedure, followed by a bilateral LASIK procedure, followed by another cataract procedure, followed by another bilateral LASIK procedure. Alternating between cataract and refractive procedures leaves time for the staff to prepare the respective rooms and equipment.

Because excimer laser requires a turnover time, the alternating approach we take is ideal. This method could also work well for you if your practice has only one excimer laser, and you wish to make productive use of the turnover time between your laser cases.

At about six cases per hour (that includes two cataract and two bilateral LASIK), I’m the fastest surgeon in our group. I’m doing as many cases as I’m able and willing to do, given current available technology, the mixture of procedures that I perform, and the time I need to spend with patients (I talk with all of my patients before surgery and afterward).

Our slowest surgeon does about three procedures an hour. While we set no minimum number of cases, we do keep track of our production.

We tend to divide every day — both surgery and clinic days — into half-days: 7:30 a.m. to noon and 1 to 5 p.m. We want the surgeon to examine the maximum number of patients and make sure the entire staff is operating at peak efficiency during those periods.

In clinic, our surgeons see between 6 and 12 patients an hour. Again, some of us will typically examine more patients than others.

We recently decided to add optometrists to our staff. They, together with ophthalmologists and the optometrists who train with us, help examine our pre-operative and post-operative patients. The optometrists also contribute to the overall efficiency of this part of our practice.

It’s a simple matter to figure the revenue from my typical 8-hour surgery day. (See "Dr. Lindstrom’s $100,000 Daily Schedule," at the end of this article.) Even if you have to hire two additional technicians to reach this level of production, the expense is more than justified. If technicians help in both cataract and refractive procedures, the expense is distributed over both.

I charge $4,500 per patient for bilateral LASIK. Revenue for one cataract extraction (physician and facility fee) comes to $1,700. The one factor that might skew the potential profitability of these procedures is overhead. In fact, the overhead for LASIK and cataract surgery in our practice is similar. That includes the overhead related to pre-operative and post-operative care.

The bottom line: If you’re not using your own facility, LASIK is about four times as productive as cataract surgery. If you’re using your own facility, LASIK is no more than twice as productive as cataract surgery.

A number of practices around the country are doing well performing only cataract surgery. We’ve learned a lot about efficiency in cataract surgery from leaders such as Alan Aker, M.D., David Brown, M.D., and William Maloney, M.D. In our practice, we’ve tried to copy them where we can and simply add refractive surgery to the mix.

Indeed, the decreased reimbursement for cataract surgery must be seen in light of increased efficiency. In 1980, I received $2,100 for cataract surgery, but at the time I could do only one case an hour. If you’re doing three cases an hour today, you’re making about as much, and if you’re doing six an hour, you’re making twice as much. I haven’t calculated what this means in terms of adjusted dollars and modern overhead, but I offer this insight as an example of how previous reimbursement levels must be weighed against current gains in efficiency.

Using Dr. Brown’s "Phaco Flip" supracapsular technique, I’ve lowered my "skin-to-skin" time for cataract surgery from 12 minutes to about 6 minutes. We perform sutureless, clear-corneal surgery under topical anesthesia, using no disposable blades. We use minimal medications and one of the less-expensive viscoelastic agents in most cases.

Patients who are referred to us are usually sent back to the referring provider for post-operative care. Our own cataract patients are scheduled for only two post-operative examinations: at 1 day and then 3 or 4 weeks after surgery.

It’s important to try to get the best deal — the lowest costs for the materials you use in your practice. But your best strategy is to maximize the effectiveness of the surgeon.

Our surgeons spend more time in the operating room than in the clinic. If you complete four cases an hour and are able to save $5 on the cost of the intraocular lens, you’ll save $160 in an 8-hour surgery day. If you can increase your speed from four to six cases an hour, you’ll do 48 cases instead of 32 during that 8-hour period, representing a significant boost in revenue.

We advertise only our refractive practice; our cataract practice survives on word of mouth and referral. Our practice is affiliated with Vision Twenty-One and Laser Vision Centers, Inc., both of which consider Minneapolis as one of their most mature markets.

Part of the strategy of Vision Twenty-One is to set up and develop Local Area Delivery Systems (LADS) to offer efficiency and cost advantages in administration and management of materials. Vision Twenty-One owns a large retail optical chain in our community. This optical chain represents 38 optometrists who see approximately 150,000 patients per year. Our practice has benefited from referrals through this system. (Note: Dr. Lindstrom is chief medical officer of Vision Twenty-One and Laser Vision Centers.)

Part of retooling the cataract surgery surgical portion of your practice may be the need to develop referral sources through health maintenance organizations (HMOs), physician networks or physician practice management companies (PPMCs), such as Vision Twenty-One. After all, if you don’t have patients coming in for surgery, your increasing efficiency won’t matter much.

We’re lucky to have some very talented consultants in the eyecare field who have experience with all sizes and types of practices.

If you’re serious about increasing efficiency and volume, don’t be too proud — or too pennywise — to invest in a little expert advice.

Developing an efficient practice is hard work, but it’s paid off for us in many ways. Several of the surgeons in our practice, including me, now have time to devote to academic appointments. My surgical practice consumes about 60% of my working time; the remainder is available for teaching, consulting and research.

I was here during the "good old days" of the late 1970s and early 1980s, when it seemed that all ophthalmologists were doing well. Yet I don’t think things have ever been better than they are right now.

Our practice is now more efficient. We’re patient-driven. And we simply have more procedures and better care to offer our patients.

I believe that ophthalmologists who are sensitive to the needs of their patients and who strive for efficiency will continue to hold a valued — and well-compensated — place in their communities.

In many areas of the country, certificate-of-need (CON) requirements have been relaxed during the past decade, allowing the establishment of many new ASCs. But not in the Roanoke Valley of Virginia.

For the past year, 13 ophthalmologists affiliated with the Vistar Eye Center in Virginia have battled the mammoth Carilion Health System over an ASC the doctors want to build, primarily to provide cataract surgery. In fact, the Roanoke Valley is one of few metropolitan areas in Virginia that doesn’t have an ophthalmic ASC — usually an indication for routine granting of a CON.

Both state health officials and Carilion have argued that an ASC would threaten an important source of income for the hospital system. In a last-ditch effort, the Vistar doctors convinced a state lawmaker to introduce a bill into the legislature that would allow the ASC to proceed.

In late February, after a strong lobbying effort by Carilion, the bill was defeated. While the Vistar doctors are appealing the state health department’s denial of their request for a CON, the doctors say they have spent $180,000 on the application and can’t afford to fight the state in court.

The final decision on the fate of the ASC will be made in the spring by State Health Commissioner Randy Gordon.

— Keith Croes, Contributing Editor