Best Practices

Is Laser Cataract Surgery Viable for You?

By Bruce Maller

Many leading ophthalmologists would agree that femtosecond lasers represent a step forward in cataract surgery, improving the accuracy and predictability of capsulotomy, nucleus fracture and corneal incisions—and ultimately providing better outcomes for patients. Others argue that traditional techniques performed by a skilled surgeon offer state-of-the-art care without the financial and procedural entanglements that accompany the femto laser proposition.

I am certainly not here to debate the clinical efficacy of this exciting new technology. I do, however, want to bring some business perspective to the discussion. The business model offered by the manufacturers (four are currently in the market, with more to come) include the purchase of the laser as well as a per-procedure fee. As is always the case, the deal structure will vary; however, in the end, those are the basic elements of the model: a six-figure investment in the technology up front and another, smaller fee tied to usage patterns.

Stepping back and looking at the business aspects of femtosecond laser technology, I feel readers need to consider the following interrelated issues.

► Practices and surgery centers will need to make a substantial investment in plant and equipment during a time when operating margins are under increasing pressure.

► Facilities may have to make improvements to their physical space to accommodate the laser platform and related equipment.

► Most practices and surgery centers are confronting increases in the cost of doing business due to myriad regulatory and compliance issues.

► Ophthalmology is faced with increasing downward pressure on third-party reimbursement at a time when many consumers are struggling with the out-of-pocket expense for deductibles and copayments.

For additional insights into the impact of femto-second laser technology and to download the easy to use break-even analyzer shown above, visit the BSM Café at www.bsmcafe.com.

Conversion Conundrums

Converting your cataract surgery protocol from low-cost manual techniques performed with technology already on hand to the greater precision, but greater cost, of a laser-assisted procedure is a sea change—just be mindful that it doesn't put your practice under water.

Practically and strategically, three key questions should be considered:

1. Is it reasonable to ask consumers to pay more out of pocket for access to this technology?

Ophthalmologists have honed their current cataract surgical techniques to provide outstanding outcomes in nearly all cases. Surgeons need to put themselves in the position of the consumer or patient and ask themselves whether there is sufficient added value from a femto-assisted procedure that would justify the additional out-of-pocket expenditure. Consumers generally make good decisions when provided full disclosure of the associated features and benefits of new technology. The key is to provide a clear message that enables the patient to assess the risk and benefit of each treatment option and in turn make an informed decision.

Success will depend upon premium IOL sales, as the femto laser is touted as improving outcomes for these procedures. It may be illuminating to conduct a demographic and socioeconomic assessment of your patient base and community. Are these folks the sort who would pay out of pocket for the greater convenience of spectacle independence postoperatively? What percentage of your patient base is a reasonable target for conversion to laser cataract surgery and premium IOL selection? Once you have a sense of the additional revenue to expect, you can work backward and estimate how long it will take to recoup your investment.

2. Is it good business to add technology that will increase the facility cost per case by $500 to $700 with no expectation that insurers will increase reimbursement?

Ophthalmologists and surgery centers have spent decades focusing on improving the outcomes and efficiency of performing cataract surgery in the ambulatory surgery center. This improved efficiency has enabled eye surgeons to perform surgery with excellent outcomes while providing an opportunity to offset continued declines in professional and facility reimbursement. An investment in this technology will increase the variable and fixed costs per case. As such, procedure pricing needs to be given serious consideration.

It is difficult to predict whether commercial payers or CMS will react adversely if they perceive that surgeons or facilities are “balance billing” patients for what are otherwise considered covered services. Many industry observers and surgeons are relying on the 2005 and 2007 rulings that gave surgeons the ability to upcharge patients for the refractive component of premium IOLs. Obtain guidance from your advisors before implementing this technology so as not to run afoul of payer policy and in-network contract provisions.

3. How will this technology impact the operational flow in the practice/ASC?

It is important for the surgeon, practice management team and ASC staff to assess the operational flow and efficiency impact of adding this technology option to the equation. Introducing this option will increase chair time for the surgeon, operating room and clinic staff. The laser component of the surgery must take place outside the surgical suite, creating a two-stage process for all involved: patient, surgeon and support staff. Also, staff will need to take the time to explain the features and benefits—as well as associated cost—of this treatment option.

Experience has taught me that once ophthalmologists embrace new technology as the “right thing to do” for their patients, they find a way to make the business model work. I am confident this will be the case with this new and exciting technology.

Remember: having several good technology platforms to consider gives you leverage as the buyer to strike the best possible deal you can. The femto-second laser manufacturers cannot succeed if you don't. That puts you in the driver's seat. OM

Bruce Maller is president and CEO of BSM Consulting, an internationally recognized health care consulting firm. For more information about BSM and its resources, visit www.bsmcafe.com.