fluidics and tip designs afford you a safer and quicker procedure during cataract surgery.
But the newest machines still bear a price tag that can give a small practice pause. Is the latest generation of phaco technology worth the expense? Will it continue to be the predominate method of cataract extraction in the years ahead? Should you wait for prices to drop before making your next move?
Where is phaco technology going?
Ophthalmology Management surveyed top phaco surgeons and interviewed other experts to find the answers to these and other important questions.
In this article, we�ll quote some of these leading doctors, putting their responses in the context of evolving technology and decreasing cataract reimbursements. We�ll also discuss how phaco technology factors into the recently revived trend toward Ambulatory Surgery Center (ASC) development.
Is it about time?
The average "phaco time" � the amount of time ultrasonic power is used in the eye � for our panelists is 200 seconds on average, ranging from 20 to 720 seconds. Although the consensus is that modern phaco equipment reduces phaco time, phaco time is not a primary factor in the panel�s current instrument preferences.
The panel agrees that the latest phaco technology is much safer than previous instrumentation, and is directly responsible for better clinical results. On the other hand, the panel also believes that surgical technique is more important than the type of phaco instrument you use when it comes to reducing phaco times.
"Better control of vacuum and flow combined with improved surge control has made the phaco procedure faster and safer, with faster return of vision and fewer post-op complications," said William J. Fishkind, MD, of Tucson, Ariz.
"Technology and technique are inextricably married," said Louis D. Nichamin, M.D., of Brookville, Pa. "We really can�t maximally advance without both."
Stephen H. Johnson, M.D., of Newport Beach, Calif., agrees that phaco technology is only part of the equation.
"It�s the hand that holds the technology and the incision size the IOL (intraocular lens) goes through that makes cataract surgery what it is today," he said.
The trend toward small-incision IOLs reinforces the expected dominance of phaco in the years ahead.
Polymethylmethacrylate (PMMA) lenses, which require larger incisions, lost their leadership in the posterior chamber IOL marketplace in the second half of 1996, according to Health Products Research (HPR), a market research firm in Whitehouse, N.J. (See "PPMA IOL Usage Trends" on page 34.) As of the first half of 1998, 77.3% of posterior chamber IOLs implanted were foldable (43% silicone, 34.3% acrylic).
How much more efficiency can you achieve?
Quicker phaco obviously contributes to more efficiency in the gross sense of cataracts per hour. It is precisely the ability to remove more cataracts per hour that may spell survival for a cataract practice.
Increased efficiency and more procedures may be helping to fuel the growing number of ASC startups. But like technique, efficiency is also very much influenced by surgical skill.
"I use energy modulations � a burst mode of two pulses per second," said I. Howard Fine, M.D., of Eugene, Ore. "So although my phaco times are 1 to 1.5 minutes, my effective phaco time is around 20 seconds. This is the lowest amount of power I�ve ever been able to use with phaco."
It�s important to remember, however, that not every cataract surgeon is in Dr. Fine�s category.
Many aren�t capable of the speed required to stay afloat in a high-volume, low-margin environment � with or without the latest machines. And new technology may not increase efficiency for every surgeon.
"Any improvement in efficiency (from new-generation technology) depends on how efficient you are to start with," said Randall J. Olson, M.D., of Salt Lake City. "With phaco chop, my average time has been 2 to 2 1/2 minutes. The new Alcon system cut about 20 seconds off of that time, or about 20%. Will 20% make a big difference? Not in my case, perhaps. For the surgeon who takes 30 minutes, a 20% or 30% decrease could make a big difference."
But is the difference big enough for the slower surgeon to stay competitive? That�s a tough question that may lead to painful answers in the years ahead.
Some believe moderate-to-low-volume cataract surgeons will eventually abandon cataract surgery and leave it to the high-volume centers. Even some leading surgeons are developing a more skeptical outlook on the future of phaco and cataract surgery.
"We all spend our efforts on what pays the most per unit of time spent," said Dr. Johnson. "When I add up the time it takes per cataract patient � pre-op, scheduling, A-scan and testing, O.R. time, post-op visits and 90-day global risk period � I may soon consider not doing cataract surgery because of current reimbursement levels.
"In this situation, it will be hard to justify any expenses unless they are for significant advances."
Meanwhile, surgeons committed to cataract surgery for the long term cite improved surgical outcomes as one major reason. For example, reduced phaco time means subjecting the patient to lower amounts of ultrasonic energy, which is commonly linked to a lower risk of operative and postoperative complications.
Of course, as Dr. Olson noted, it�s impossible to take complications out of the time-and-efficiency equation.
"The dark little secret of cataract surgery is that a fairly large number of surgeons have a fairly high complication rate. Any improvement that technology offers can be helpful," he explained.
"The programmability of the Diplomax, the venting of the Alcon system � all these things provide a greater margin of safety and are important factors."
Many ophthalmologists prefer not to discuss shorter procedure times at all. They believe reimbursement cuts will only continue if surgeons keep making publicized claims of how they�re increasing the speed of their procedures. All of this talk, the silently concerned surgeons claim, only encourages the government to trivialize cataract surgery.
Other ophthalmologists seem past caring, as they try to squeeze more efficiency out of their cataract practices. After all, the thinking goes, how short can you make the procedure? And if you don�t know where you are in terms of procedure speed, how can you improve?
Rise of ASCs
The transformation of cataract surgery from an inpatient to an outpatient procedure in the mid-1980s was accompanied by a flurry in the construction of dedicated ophthalmic ASCs. This led to the establishment of the Outpatient Ophthalmic Surgery Society, whose membership quickly grew to about 600 ophthalmologists. The group has represented almost as many surgery centers.
At least part of the reason for that first ASC boom was the ability to couple increased efficiency with enhanced patient experience.
Now, according to Bruce Maller, of the BSM Consulting Group, Incline Village, Nev., ophthalmologists are demonstrating renewed interest in ASC development.
"Historically," Maller said, "surgeons doing 300 to 500 cases a year didn�t believe they could build an ASC. However, by scaling down square footages, building the operating room judiciously and using other techniques, it is definitely possible for more surgeons to build an ASC today."
Another consideration to keep in mind:
"Ophthalmologists and their lawyers are more comfortable about the legality of physician investment in ASCs under the Stark II and state self-referral laws than they used to be," said Michael Romansky, of Washington, D.C. He�s counselor of the Outpatient Ophthalmic Surgery Society.
"From a reimbursement standpoint, 10 years ago ophthalmologists were doing cataract surgery for a facility fee of $500, which did not even cover costs. It was a loss leader to attach to the professional fee. But today the professional fee is lower than the facility fee."
Obviously, in this situation, the phaco unit becomes a valuable component of increased volume and efficiency for the success of an ASC.
But more than phaco will be necessary to continue this success. For their part, attorney Romansky and the outpatient surgery organization are fighting to change or delay a proposed rule that would lower facility fee reimbursement for cataract surgery by 7% and YAG capsulotomy by 35%. They argue that the Health Care Finance Administration (HCFA) can�t expect ASC changes if the agency won�t even be ready for the hospital outpatient updates because of Y2K problems.
"We are guardedly optimistic that adverse payment rate changes will not be implemented before the year 2000," Romansky said.
Considering phaco cost and training
Our panel believes that the latest phaco equipment is worth the expense, and that surgeons shouldn�t wait for a possible price drop to invest in the latest technology.
Although cost wasn�t a big factor in their current choice of phaco instruments, the surgeons acknowledged that they�re not in as good a position today as they were several years ago to invest in new technology for their practices. The panel�s consensus is that the new-generation phaco instruments have a short learning curve, and that phaco manufacturers generally do a good job of training surgeons. But panel members said manufacturers fall short in explaining the cost-justification of their machines.
Perhaps as a reflection of their roles as leading surgeons � or simply a remaining vestige of the days of plenty in cataract surgery � the panel reports that they haven�t had problems getting access to their choice of phaco technology.
Look for major changes in the next 10 years
Phaco will continue as the predominant method of cataract extraction in the United States for the next 5 years, the panel predicts, and the technology will improve. Within 10 years, however, the panel�s consensus is that some other approach will take its place.
The reduction in Medicare reimbursement will continue to influence all aspects of the delivery of cataract surgery.
"Medicare payment cuts have jeopardized the surgeon�s access to new technology," said Dr. Fishkind. "Soon, the cataract patient will be relegated to long waiting lists and outdated technology, as surgeons are paid more to see office patients and can�t afford to repair old machines or purchase new ones."
Yet advances, most surgeons hope, will continue.
"Unfortunately, the lack of dollars in the system has slowed down, but not curtailed, advances," said Dr. Nichamin. "I still sense a distinct desire in the industry to explore new ideas and improve upon current instrumentation."
Keith Croes, a veteran journalist in the eyecare market, is the owner of Croes Communications, Plainsboro, N.J.
Survey Results
What the Experts Had to Say
Our survey asked the surgeons listed below to respond to 15 critical questions by circling a number 1 through 5. Number 1 indicates a strong yes and number 5 indicates a strong no.
The number 3 is considered the neutral point. Numeric averages under 3 therefore represent a consensus yes (thumbs up) and averages over 3 represent a consensus no (thumbs down).
When considering these responses, keep in mind that all of our panel members own their phaco systems; none of them rent or lease their systems. Eighty percent of them share their systems with other surgeons. All of them implant foldable intraocular lenses in most cases.
| 1. Five years from now,
will phaco continue to be the predominant method of cataract extraction in the U.S.? Ten years from now? |
Yes 1.6
|
| 2. Is the latest generation of phaco technology worth the expense? | Yes 1.9 |
| 3. Should U.S. phaco surgeons wait for prices to drop before investing in the latest phaco equipment? | No 3.7 |
| 4. Was cost a big factor in your current choice of phaco instrument? | No 3.4 |
| 5. Were phaco times a big factor in your current choice of phaco instrument? | Neutral 3.0 |
| 6. Does your current phaco unit of choice result in much faster times than your previous technology? | Yes 1.8 |
| 7. Is the latest phaco technology much safer than previous phaco technology? | Yes 1.6 |
| 8. Is the latest phaco technology directly responsible for better clinical results than older phaco technology? | Yes 1.8 |
| 9. Have you had any trouble learning how to use the latest phaco technology? | Yes 1.5 |
| 10. Do phaco manufacturers do a good job cost-justifying new phaco technology? | No 3.3 |
| 11. Do phaco manufacturers do a good job training surgeons how to use the latest phaco technology? | Yes 2.4 |
| 12. When it comes to phaco times, is surgical technique more important than the type of phaco instrument used? | Yes 2.5 |
| 13. Are you in a better position now than several years ago to invest in new technology? | No 3.9 |
| 14. Have you ever had a problem getting access to your choice of phaco technology? | Yes 2.1 |
| 15. Do you believe the newest phaco technology leaves little room for improvement and that you will see few major changes in the years ahead? | No 3.8 |
Source: A Croes Communications survey conducted for Ophthalmology Management, Jan., 1999
Management Implications of Phaco
Whether to buy or lease depends on your situation. Consider two issues: tax consequences (get your accountant to review the ramifications) and cash flow. Most financially robust practices tend to fund growth out of their cash flow. Ophthalmologists as a rule are debt-adverse.
Most modern phaco machines are variations on terrific. What we�re seeing is the last gusher out of the development pipeline that companies funded from this sector 5 to 10 years ago. You can expect the rate of technology turnover to be somewhat slower in the years ahead. As in a lot of mature industries, only a few companies will be vying.
Cataract surgery is going to increase. More cases will be concentrated among fewer surgeons, who will provide high-quality surgery at high profit. Phaco companies may bifurcate their technology, offering high-ticket instruments ($50,000 to $100,000) and "blue-plate specials" at a lower cost. High-volume practices are efficiency and reliability sensitive; lower-volume ASCs are much more cost-conscious.
Source: Pinto Associates
|
Phaco Demographics
Before reviewing current and future phaco options, review the evolving cataract market. Most surgeons know all too well the reduced reimbursements associated with CPT 66984, the Medicare code for cataract/implant surgery. By comparison to the surgical fee, the facility portion of cataract surgery reimbursement has begun to look downright attractive, a situation that has led to an increase in the development of ASCs for general ophthalmic surgery.
Meanwhile, barring the effects of better nutrition or some type of cataract prophylaxis, the aging population will likely result in a rise in the number of cataract extractions performed per year.
In 1997, 38.6 million Americans were covered by Medicare. Within that population, about 2.5 million cataract procedures were performed, for a rate of 6.5%. (Because many of these procedures were bilateral, the rate doesn�t necessarily reflect the total number of beneficiaries who received cataract surgery). HCFA projects that 44 million Americans will be covered by Medicare by 2007. If the same percentage holds true, about 2.9 million cataract procedures will be performed in 2007.
According to Health Products Research (HPR) of Whitehouse, N.J., 93% of cataract extractions done in the first half of 1998 were done using phaco, up 3% from the same period in 1997. The question is, can surgeons continue to provide the latest-technology phaco as reimbursement shrivels and the number of procedures rises?
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