Measuring the Impact of Laser Refractive Surgery
A survey sheds light on key practice trends affecting both surgeons and nonsurgeons.
By Lewis Coopersmith, Ph.D., and Christopher Santin

According to a recent survey conducted by Health Products Research, Inc., the use of laser surgery to correct refractive errors increased an average of 75% per year since 1997. During that same period, the percentage of ophthalmologists performing laser surgery grew from just more than 20% to more than 30%.

Given those pronounced trends, Health Products Research followed up with another survey to analyze ophthalmologists' perceptions of how the growth in laser refractive surgery has changed key economic factors related to their practices and what changes they expect in the near future. (See "Survey Specifics") Some of the findings will likely confirm your intuitions and experiences, while others may surprise you.

What the survey showed

Here are key findings from that survey:

Higher surgery levels are associated with lower fees. Sixty percent of the surgeons surveyed performed four or fewer surgeries per week. Twelve percent performed 20 or more. The fee per eye ranged from $700 to $2,900. The median fee was $1,600 per eye. The median fee per eye decreased with increasing levels of weekly surgery. (See "Fee Per Eye is Lower for Higher Levels of Surgery," at right.)

Fifty-eight percent of all surgeons said their fee per eye decreased from the previous year; only 10% said it increased.

An economic analysis of results showed that surgery levels increased at a faster rate than corresponding decreases in fees. This is what economists refer to as "elastic" demand. It was especially evident at higher surgery levels. We estimate that at today's levels of laser surgery, a 10% drop in the average fee results in a 20% to 30% increase in the average surgery level.

Third-party coverage of laser surgery fees is on the rise and is likely to lead to greater demand. Patient insurance coverage for all or a portion of laser surgery fees is low. Sixty percent of surgeons reported that none of their patients was covered. However, approximately 15% of surgeons reported that 5% of their patients were covered, and another 8% reported 10% coverage.

Of note was that surgeons who performed five or more surgeries per week reported that 3.8% of their patients had coverage. Lower volume surgeons reported that only 1.9% of their patients had coverage. Among covered patients, the median level of fee coverage was 80%.

Change in levels of patient coverage over the past year was slow. Eleven percent of surgeons reported increases; 82% reported no changes; and 7% reported decreases. However, the percentage of patients covered was higher for higher volume surgeons and for surgeons with increases in demand for corrective surgery over the past year.

In the past year, the numbers of annual eye exams and contact lens and spectacle patients have increased more frequently for laser surgeons than for nonsurgeons. The concern that laser refractive surgery would shrink the number of contact lens and spectacle patients that a practice serves appears, for now, to be unwarranted. Sixty-nine percent of laser surgeons said they fit contact lenses or eyeglasses compared with 59% of nonsurgeons.

Both surgeons and nonsurgeons who fit reported fitting just fewer than 50 patients a week for eyeglasses or contact lenses. But a higher percentage of laser surgeons than nonsurgeons reported increases in both regular eye exams and contact lens or eyeglass patients. (See "Increases in Practice Activity".) These results were reasonable considering the increased public awareness in eye health generated by greater media attention and physician advertising associated with laser surgery.

That being said, an interesting difference existed between surgeons whose weekly surgeries decreased in the past year and those whose weekly surgeries increased or remained the same. Among surgeons with decreased surgery levels, 52% reported an increase in contact lens and eyeglasses patients compared with 33% for other surgeons.

Lower fees will lead to higher volume, and surgery will be more concentrated among fewer ophthalmologists.

The concentration of surgeries has intensified. (See "Change in Weekly Laser Surgeries".) High-volume laser surgeons were more likely to experience an increase in the number of surgeries they performed. Lower-volume surgeons were more likely to experience decreases.

Falling fees and the associated reduced profitability at low surgery levels most likely contributed to this trend. A high percentage of nonsurgeons (79%) said they anticipate continued reduction in the cost of laser corrective surgery. They most frequently cited increased competition as the basis for that expectation. These perceptions will probably serve as a disincentive for starting a laser surgery practice.

A lower percentage of surgeons (58%) said they expect fees to decrease in the future, but they gave two reasons for that expectation: competition and decreased technology costs. This percentage was about the same for all levels of weekly surgery, suggesting that the higher fees for low-volume surgeons have stabilized.

Lewis Coopersmith, Ph.D., is an associate professor of Management Sciences at Rider University. As vice president and consultant for Health Products Research, Inc. (HPR), a division of Ventiv Health, he designed market share tracking audits that serve as authoritative industry sources for contact lens and intraocular implants. You can e-mail him at lcoopersmith@hprmail.com.

Christopher Santin is a senior project leader for HPR. He conducted the survey used in this article as part of his degree requirement at Rider University. You can e-mail him at csantin@hprmail.com.