FEMTO FACTOR

Before you take the FLACS plunge

If you are thinking about buying a femtosecond laser, first you need a plan.

By Scott LaBorwit, MD

In making a decision to purchase a femtosecond laser for cataract surgery, a physician has several issues to think over. A primary consideration should be whether the technology will benefit patient care. But that’s far from the only major question. Some others to answer before taking the plunge include who else will be buying and using the laser, where will the laser be placed and how will it impact flow in the center, and how will the doctor educate both patients and staff?

Then there’s another major consideration — the cost of the laser. That quickly becomes an overshadowing concern since the commitment is formidable. Focusing on a purchase price alone could make any surgeon faint of heart. Instead, you need to establish a business plan to better guide your decision.

SHARPEN YOUR PENCIL

Before purchasing my first femtosecond laser, I sat down and created a business plan. It covered a five-year period and included conservative estimates on laser-assisted surgical volume. After I made a plan on paper, I then moved it on to an Excel spreadsheet.

If a laser cost $450,000 to purchase, and there’s another $400 per-case click fee and $30,000 each year in maintenance — well, you can see how many surgeons might walk away from the possibility of purchasing right there.

A business plan allows you to consider the purchase cost differently and look at the impact a loan and surgical volume will make.

BREAK IT ON DOWN …

Converting the costs into a monthly income and expense report will help a surgeon digest the numbers and get past that initial sticker-shock. In the example I used above, putting a down payment of 5% on a $450,000 laser would cost about $7,500 each month for five years. After the first year, service would cost about $3,300 each month. That means a fixed cost of $10,800 each month.

My volume was 100 cataract cases per month and I estimated 20% of patients would choose FLACS. How did I arrive at this figure? I knew my premium IOL ReSTOR (Alcon) population was about 25% of my cataract patients, so I thought (or hoped) perhaps another 20% would take the middle-of-the-road choice and opt for FLACS.

Additionally, experience shows that the average conversion percentage that a doctor could expect when starting a new technology is 15% to 25%.

If patients paid $1,300 for the procedure and the “click fee” was $400, then $900 was available per patient to help pay for the fixed cost. If 20 patients chose FLACS each month, then multiplying that number by $900 in turn created $18,000 each month above the variable costs — more than enough to cover the fixed expenses of laser ownership.

NUMBERS DON’T LIE

Once I plugged in the numbers, the monthly business plan demonstrated that purchasing the laser was possible even based on conservative estimates. Also, I believe you will find that once the laser is actually in the center, volume is frequently greater than expected. That’s because not only your own patients will want FLACS, but so will those of other surgeons, who will want to use the laser in your center too —further helping your bottom line.

That has certainly been my own experience. I made the purchase based on the expectation of doing 20 FLACS cases each month. However, once the laser was installed in my center, I was pleasantly surprised to find that instead of 20% of my patients choosing FLACS, the figures were usually more like 65% to 70%. A little over three years later, more than 140 FLACS cases are done each month between the two lasers I now have at two locations. These numbers include my own cases in addition to those of the seven other surgeons also using the lasers.

ZOOM IN, THEN ZOOM BACK OUT

Constructing a business plan helps break down the cost of the laser to a monthly payment. Putting this number next to the expected income from the laser gives you the information you need to decide if the investment is possible. Don’t forget that you still need to look at the big picture. The business plan works monthly, but does require a commitment — typically at least five years. A solid analysis integrating all the facets will help you know if purchasing a laser is economically viable. OM

Scott LaBorwit, MD, is a principal at Select Eye Care, with locations in Towson and Elkridge, Md., and is an assistant professor, part-time faculty, at Wilmer Eye Clinic of Johns Hopkins Hospital, Baltimore. His email is Sel104@me.com. Disclosures: Dr. LaBorwit is a consultant to and speaker for Alcon.