Sticking with LASIK Despite the Times
By David Schneider, M.D., and Paul Dougherty, M.D.

We all know of at least one practice that's stopped offering LASIK because of how difficult it's become to maintain profitability. We can still point to others, however, who have been willing and able to continue providing the service to their patients.

Here, we'll hear from two such practices. One has adjusted its strategies and resource allocation as needed over the years to keep LASIK in its service mix. Another has stayed focused on refractive surgery, using the strategies that have worked since the opening of its laser center at the end of 2000, even though that's just when the economy began to head south.

From their stories, you should be able to glean several useful philosophies and ideas for your own practice.

Adjusting to Reality
By David Schneider, M.D.

"When the world comes to an end I want to be in Cincinnati," said Mark Twain. When asked why, he replied "Because everything happens 5 years later in Cincinnati!"

Well, this may have applied to the world before LASIK, but certainly not since, as Cincinnati has been a leader in the laser refractive surgery price war, shake-up and resultant downturn. While this certainly isn't what many of us envisioned when LASIK emerged, we must deal with it. Hopefully we can accurately "rightsize" the LASIK segment of our practices so that we can continue to provide this life-altering procedure to our patients while avoiding the bankruptcy courts. Let's leave that ignominious task to our corporate fee-discounting competitors!

An interesting history

When I started out more than 20 years ago, there was no marketing of ophthalmic procedures. One built a practice by word-of-mouth, or inherited or purchased another's practice. I started as a general ophthalmologist, slowly trying to build my cataract practice, waiting to ramp up my refractive practice.

Eventually, based on the advice of a consultant to capitalize on my fellowship-acquired RK skills, and the success and enthusiasm of other refractive surgery practices, I committed to adding refractive services. It then was apparent that an external marketing campaign was necessary.

My first marketing campaign consisted of newspaper ads (approximately 4x6 in.) on a consecutive Sunday/Monday/ Tuesday accompanied by radio spots on Monday, Tuesday, and Wednesday announcing an RK seminar. The campaign generated 750 inquiries and filled 16 seminars in the next 8 weeks -- at a cost of about $5 per lead. We were up and running, word-of-mouth kicked in, and we were busy from that point on. This led to our adding expert residency-trained optometrists to help with our ever-increasing patient volume.

All went well until the Ides of May, 1987. That was the date that Metropolitan Insurance (the major carrier in our area) determined that refractive surgery would no longer be a covered procedure under their plans. Between May 1 and May 15, I had performed 350 RK procedures, and more than 500 for the month. (They covered the second eye if you had your first eye done before May 15.) I wouldn't see that volume again until LASIK took hold, 10 years down the road.

Shifting gears

Faced with this precipitous loss of revenue and patient volume, we made a conscious decision to be more aggressive in marketing our services to seniors. Our growing presence in refractive surgery also helped boost public awareness in general, and my cataract volume was increasing as well. We opened a Medicare-certified in-office ambulatory surgery center and started doing nearly all of our Medicare cataract and glaucoma patients in our own center. This also built word-of-mouth referrals and helped to expand the geriatric portion of our practice. We settled into a fairly consistent case mix of 1,000 RKs and 1,000 cataracts per year through the next 5 years.

Then, lo and behold, in the early 1990s, my competitors discovered RK and started marketing their practices. This led to a doubling of our volume with only an incremental increase in our marketing budget. We had always committed to a basal level of marketing (5% to 10% of gross revenue) but have never really ceased marketing for any length of time despite the vagaries of the marketplace.

With the availability of the excimer laser, my practice skyrocketed and I had the means to add a general ophthalmologist, a glaucoma specialist, an established cornea/external disease refractive surgeon, and a retinal specialist.

Shifting gears again

Then, the events of 2001 altered the landscape for all of us on many levels. First came the slew of negative publicity about LASIK, with resultant consumer hesitancy. Next came the slowing economy and more consumer hesitancy coupled with reactionary discounting by some providers who didn't understand that you can't improve the bottom line by experiencing a small loss per case, no matter how many more you perform! Finally September 11 delivered the crushing blow that rendered our laser center reeling from a 50% to 60% reduction in volume over the fourth quarter of 2001. For the first time in many years, we were getting close to the edge financially and had to institute some serious measures.

For 16 years we had offered a free transportation service to those patients who were in need, but we reluctantly had to end that service. We instituted a temporary wage freeze to see how the first two quarters of 2002 shape up. We sought professional consultation (no, not psychiatric, though for some that is probably appropriate) from marketing and practice management gurus to attempt to maximize our endeavors.

We now pay much closer attention to our lead-generation cost and especially our lead-follow-up efforts, always remembering that it's much more cost-effective to convert someone within your system than to try to generate a new lead from scratch. We've made several other changes as well:

• We ask for referrals. During the early post-LASIK visit, I ask patients if they would do me a favor. They almost always say of course, and I ask them to please tell others about us. I also mention that our practice treats all types of eye problems in case they have friends or relatives who need help.
• We get the e-mail addresses of all of our leads so that we can reach them quickly and inexpensively if they haven't moved forward in the process.
• We have a list of past patients, grouped by age and preoperative refraction, so potential patients can have someone to speak with whose experience might match their own.
• Our operating surgeons call their patients at home the night of the surgery to inquire about their condition and answer any questions. Patients are impressed and grateful that their busy surgeon took time to personally telephone them.
• We use a bulletin board or billboard in the office waiting room touting our next seminar date or other items we want to market to our patients, including our Web site address.
• Our doctors personally walk patients to the front desk following a free screening and tell our scheduling person that this patient is an excellent candidate so let's set him/her up for a full consultation as soon as possible.
• We hand out customized VID cards for the computer .
• We've collaborated with another practice in our area on a series of billboard advertisements that feature the VISX WavePrint system to increase awareness of this new technology that both practices feature.
• We've stopped trying to convert pure price-shoppers because it's time-consuming and we're not the lowest priced.
• We've put large smiley-faces on the walls in front of the phones, so we're all reminded to smile and be positive and friendly when talking to patients and prospective patients.
• I recommended that everyone in our office read the book "Fish," and we played the Fish video at a recent staff meeting.

Through all of this, we've remained committed to our plan, and continue to pursue a premium-priced value experience for our patients. It's our refractive efforts that need bolstering now, so that's where we're expending the most time and resources. Internal marketing that is cost-effective, or at least relatively inexpensive, is the best approach given our still uncertain times. Furthermore, aggressive external marketing to seniors just isn't cost-effective in our market right now because of the many restricted insurance plans and the low reimbursement for cataract surgery. Plus, we don't have an optical dispensary.

Reason to be positive

For now, these measures appear to be effective. Our first-quarter numbers have been strong (up more than 100% over fourth quarter 2001) but still not as strong as our previous two first quarters. I believe we won't know how the year is shaping up until this summer, but I'm still convinced of certain things. Refractive surgery is a growing industry, and we've only scratched the surface of reaching a vast potential of candidates.

I'll continue to plan for both the refractive and senior aspects of my practice and keep my intraocular skills sharp because phakic implants will be the next craze. All of us must decide where we fit in to this schematic, but I for one am committed to keeping my practice at the forefront of this great specialty. All of us must strive to maintain quality and value for our patients, our practices and ourselves.

Staying the Course
By Paul Dougherty, M.D.

In December 2000, I opened my own solo laser vision correction practice in Camarillo, Calif. I had just purchased the practice from a laser vision management company and moved to a larger, more visible location. Even though this was just as the economy was beginning to stagnate, we increased our average monthly LASIK volume in 2001 more than 90% compared with the year 2000, while maintaining our premium pricing.

In January 2002, we performed close to 200 new paid refractive surgery procedures. We opened a second laser center in Santa Barbara last month.

Dr. Dougherty's laser center is in a freestanding building as part of a high-end commercial plaza. The large number of cars that pass each day typically results in an additional 6 new procedures a month.

Why we've been successful

I attribute our success -- despite the general downturn in the LASIK market -- to multiple factors:

Ongoing commitment to quality surgery. We offer the best technology both in terms of lasers (We use Nidek and VISX), keratomes (BD K-3000) and diagnostics (Orbscan and OPD Scan). We rigorously monitor outcomes and adjust nomograms regularly. We pay strict attention to sterile technique and we never cut corners (i.e., perform surgery without gloves, masks and caps, or re-use the same blade on multiple patients). Also, we constantly monitor and control temperature and humidity in the laser rooms to assure consistent outcomes.

Customer service. In addition to ensuring the best visual outcomes, we also focus on customer service. No expense was spared in building our laser center. From marble in the restrooms to a flat-screen, high-definition TV and gourmet coffees in the waiting room, the ambiance in our laser center speaks of quality.

We've developed schedules that minimize waiting times for patients and the perception of a "cattle call." I see every patient, including the free consultation patient, at some point in the process.

Every staff member who's hired, from the receptionists to the technical personnel, are specifically screened for customer-service skills. We quote one up-front price regardless of refractive error. This price covers everything, including enhancements, post-op care for a year, pre-op exam, medications and collagen punctal plugs.

Singular focus. We focus our practice on refractive surgery, rather than have it as a sidelight to general ophthalmic care. We do perform IOL surgery, but it's usually done for refractive purposes. All of our staff members are well-versed in LASIK and are enthusiastic about the procedure. Many have had the procedure. I underwent the procedure myself 5 years ago.

Our practice name includes the words "laser vision." No patient will confuse our practice with a general eyecare practice.

Well-thought-out marketing. While fewer than 5% of our patients come from external marketing sources, we feel that marketing is important for public awareness about our refractive services and to distinguish us from other practices. Despite our rapid growth, we increased our external marketing budget only 10% in 2001 compared with 2000.

We market quality care by an experienced surgeon rather than a generic laser center. Patients come to a surgeon, not a company. We've also avoided marketing specific technology. There are many excellent FDA-approved technologies available, but many of the differences between them are not well understood by the general public. I feel that marketing technology rather than the surgeon only confuses the patient and decreases surgical volume for everyone. Also, because the same tools are available to every surgeon, it's difficult to distinguish your practice from others who have similar technology.

Another important strategy has been not marketing price. The biggest barrier to having LASIK is fear, not price. Marketing price only confuses patients about the true value of what they're purchasing. As we've seen at the discount chains, there's no direct correlation between price and volume.

Working with O.D.s. Another factor that has allowed us to grow despite the recession has been our cooperation with optometry. While our O.D. referral volume has remained flat in the past year, the referrals we did get allowed us to increase our word-of-mouth recognition. Also, we encourage our non-O.D. referral patients to consider post-op care with their optometrist, if he/she is someone we work with.

It can be done

We've been pleased with the growth of our refractive practice in the past year, and believe we illustrate that LASIK can be profitable if it's provided based on sound principles.