Issues in Custom LASIK: Return on Investment
Practices using the new technology provide a status report.
BY ROCHELLE NATALONI

Patients who invest in custom LASIK reap the rewards of state-of-the-art outcomes. But have the surgeons who make those outcomes possible, by investing in the new technology, reaping any financial rewards? Some interviewed for this article say they have. Others say that during this period when custom LASIK is considered the gold standard, but traditional LASIK continues to provide excellent results for the majority of patients, it's too soon to tell how custom LASIK will impact their bottom line. Meanwhile, positioning custom front-and-center and adjusting fees accordingly have moved practices toward profitability.

PHOTOGRAPHER: JAMES PORTO

Position Custom as Your Primary Procedure

Early custom LASIK adopter David R. Hardten, M.D., of Minnesota Eye Consultants, says his practice finances have been impacted in a mix of positive and negative ways. The equipment and key cards are more expensive than for traditional LASIK, so providing custom LASIK has required a larger investment. Also, it takes longer to plan and implement a wavefront-guided procedure. On the positive side, his volume has grown, his enhancement rate is shrinking, and all of the competition has not yet moved on to custom LASIK. "The interplay of all these factors will decide whether it is more or less profitable than standard LASIK," Dr. Hardten said.

Approximately 90% of the LASIK procedures Dr. Hardten performs are custom treatments. He has adjusted his traditional LASIK fee up, so that it is priced the same as a custom treatment. This, he says, takes price out of the decision-making model. "Since we have adjusted all of our pricing up, and not charged a differential for wavefront, we spend less chair time explaining why patients should have wavefront, and there's less agony on the part of the patients trying to decide something they would rather leave to the doctor," he said.

Most of the refractive surgeons interviewed for this article realized early in the transition process that they would need to make changes in scheduling and patient education to accommodate the wavefront measurement portion of the procedure, and the new element of choice between custom and traditional LASIK. Focusing on custom as the primary treatment offered has the benefit of simplifying the prospective patient discussion, according to Heather Ready, of VISX, manufacturer of the CustomVue system. "This helps to streamline the processing of the patient within the practice," she said.

Once this mindset is adopted by the practice, said Ready, the business of making custom LASIK profitable can begin. "The new procedure does require changes to testing and patient discussions; however, once these changes are implemented and refined, the amount of additional time needed to move a patient through the process is incremental. Practices have shared with us their enthusiasm about the results along with positive patient responses, and believe that custom has positively affected interest in the procedure and patient conversions to surgery. These factors are providing a positive economic impact," she said.

Analyze Fees to Reflect Advanced Technology

To begin making custom LASIK profitable now, Ready said surgeons should consider what it costs them to provide the procedure, what their economic goals are, and set a price based on that. "They need to understand what it costs to provide the procedure in terms of time, resources and supplies, and then consider their revenue and profitability goals, as well as the overall pricing in their marketplace. They can then set their prices accordingly," said Ready.

Holly Cross, senior product manager for Alcon's LADAR Vision System, said many of the practices that she is working with are re-evaluating their pricing model as a way to profitably incorporate custom LASIK into their armamentarium. "The vast majority of practices are charging a higher price for custom," she said. "For CustomCornea, the average price premium over conventional LASIK is $438. The reason for the increase is the additional value that advanced technology creates for the patient. Customizing the treatment is extremely valuable to the patient because it improves outcomes. Charging a premium for custom LASIK allows these practices to increase their margins per case, which increases profitability."

Refractive Business Still Tied to the Economy

Mitchell A. Jackson, M.D., director of Jacksoneye in Lake Villa, Ill., charges an additional $500 per eye for wavefront LASIK. "I do a wavefront-guided procedure on everyone who qualifies for it based on FDA criteria. I recommend medically that they have the procedure to ensure the best outcome," he said.

His LASIK volume hasn't increased since he adopted custom technology, but he attributes that to the economy, which he sees as only slowly beginning to rebound now. "I am netting more overall for the same number of procedures," he said. "As a result of my enhancement rate being lower with wavefront technology, my overall costs to the practice go down and my net profit increases," he said.

Like Dr. Jackson, Louis Nichamin, M.D., Laurel Eye Clinic, in Brookville, Pa., is charging an extra $500 per eye for custom, and recommending it to every patient who fits within the FDA-approved range. He started seeing an increase in patient volume prior to offering custom procedures in his practice. "Patients are coming back around -- in Western Pennsylvania at least," he said. "We're almost back to our 1999-2000 all-time-high volume."

His staff is still working on dealing with the added chair and office time required with custom. They do work-ups on a different day than they perform surgeries. "Office hours are less efficient now, but I suspect that like anything else, we will learn to process these patients efficiently," he said.

Warren Luster, director of Practice Development at Bausch & Lomb, said there are several things practices can do to begin making custom LASIK profitable now. "They should focus on patient education and expectations, proper patient selection and adjusting the schedule to efficiently accommodate the new processes," he said. He recommends that practices upgrade their Web sites to include custom, increase their investment in patient education materials, and increase their marketing and advertising budget. "The practice needs to understand that patients are willing to pay more for a safer laser procedure, and must confidently promote custom to all patients," he said.

In Los Angeles, Brian Boxer Wachler, M.D., is doing more procedures since bringing custom LASIK on board. "I am doing more procedures now that I use wavefront LASIK, and the reason is that wavefront technology gives patients who are apprehensive a degree of reassurance about LASIK," he said. "Patients also understand why the eye-tracker is important, which is also reassuring," he added.

Since he implemented custom LASIK, Northern California refractive surgeon Scott Hyver, M.D., has seen his revenue grow by 50%. Thanks to a combination of rebounding consumer confidence and an active wavefront marketing campaign, procedural volume is up 25% and the average selling price is 20% higher compared with last year in Dr. Hyver's practice. The availability of custom LASIK has had a significant and positive effect on both revenue and earnings, according to the practice's marketing director, Ralph Hyver. "We've rigorously trained our patient counselors so they understand and can explain the advantages of custom over conventional treatment. When the patient has the option of custom and conventional, nine times out of 10 they choose custom," he said.

The opposite has been true for the East Coast practice of Penny Asbell, M.D. She said custom LASIK has not increased the volume of LASIK procedures provided at her practice. "I think this is still a reflection of the general economy here in New York City, and that many patients will not spend this disposable income right now." Additionally, said Dr. Asbell, "People do not think custom adds a lot to the results for a normal eye with a normal refractive error."

A Different Approach

Stephen Updegraff, M.D., in private practice at the Updegraff Vision Laser and Surgery Center, in St. Petersburg, Fla., is doing more LASIK procedures than before custom technology was available -- but the increase isn't due to custom. He provides both procedures, but limits his recommendation of a custom procedure to patients he thinks will benefit most from it.

"We recommend custom LASIK to individuals who have occupations that are very demanding, such as pilots, and people whose quality of vision in low-light is paramount," he said. "For others who have a normal pupil and everything else is normal, we do our standard treatment, which has always provided excellent results. When we do a wavefront-guided treatment, the increased per-procedure fee is passed on to the patient, so I feel we have to justify that to the patient. It's very difficult to put a percentage on quality of vision."