Can You Revive Your Refractive Surgery Practice?
Many wonder if refractive procedures can rebound despite a devastated economy. Here's what successful surgeons are doing to breathe new life into the market.
By Jerry Helzner, Senior Editor
It has become almost axiomatic in the murky world inhabited by economists that businesses providing products or services that fall into the so-called “consumer discretionary” category can do precious little to overcome a major drop in the consumer confidence index.
So after a tumultuous series of events in 2008 that saw the collapse of major Wall Street firms, a stock market meltdown, rising unemployment, a major government financial rescue package and a Presidential election that promised even more uncertainty, it was really no great surprise that the closely watched Consumer Confidence Index, originally instituted in 1965, fell to an all-time low of 37.7 in January of 2009.
But even before that dismal number was released, companies depending on big-ticket “consumer discretionary” purchases such as motorcycle maker Harley-Davidson, cruise ship operator Carnival and pleasure boat manufacturer Brunswick were already feeling the effects of the sagging economy. The same economic forces affecting these companies also spread gloom among ophthalmology practices deriving a significant portion of their revenue from another big-ticket discretionary purchase — laser vision correction procedures.
Today, industry analysts believe that refractive procedure volume is scraping bottom after a decline that began in that pivotal year of 2008. According to the authoritative industry monitor Market Scope, about a million procedures were performed in the US in 2008 after approximately 1.4 million were recorded in 2007. The procedure total slipped to about 760,000 eyes in 2009 and is expected to rebound slightly to about 800,000 eyes this year (see the accompanying Market Scope chart). Meanwhile, many practices continue to search for answers as to what they can do to survive this extended downturn, Here, we will attempt to provide ideas and insights that can provide a lifeline to practices struggling to overcome the oppressive impact of low consumer confidence.
Seeing a Bottom
Talk to doctors and business executives who are closest to the refractive surgery market and they almost unanimously concur that the worst has been seen in what has been a less-than-robust marketplace in recent years.
The improved outlook may relate in part to that much-discussed Consumer Confidence Index, which has rebounded from its low of 37.7 in January 2009 to levels in the 50s and 60s in 2010. (The July 2010 confidence number was retreating again at 50.4 as unemployment figures remained high.)
“We are seeing some preliminary optimism on the east and west coasts,” says Jim Feinstein, senior vice president for sales and marketing for TLC/Sightpath, which operates more than 50 TLC Laser Eye Centers around the country. We are also seeing more younger patients coming in for laser vision correction, which is giving us marketing opportunities encompassing social networking and interactive strategies.”
Market Scope confirms that the average age of laser vision correction patients has been moving lower, with the current average age around 36 compared to an average of 39 several years ago.
Louis Probst, MD, who performs laser vision correction procedures in Wisconsin, Illinois and South Carolina, has a broad perspective on the LASIK market in various geographic areas.
“Generally, LASIK procedures have now stabilized,” says Dr. Probst. “In Wisconsin, where our center largely serves a university-based demographic, we are doing quite well. In Illinois and South Carolina, our volume is not as good.”
And this from Jay Bansal, MD, who operates three open access refractive centers in Northern California. “The bottom of the market is in,” he says. “We will never return to the heyday of LASIK that we saw about a decade ago but we should be seeing real improvement in 2011. One of the bright spots is that there is less competition now.”
Fewer Patients; Fewer Competitors
For those who offer laser vision correction, the reduced competition is a decided plus. For one thing, the disappearance of discounters and what might be termed “drive-by” providers has allowed basic LASIK pricing to stabilize in the $2,000 per eye range, with additional charges for customized procedures and femstosecond laser-cut flaps.
Amir Arbisser, MD, CEO of Eye Surgeons Associates, based in Bettendorf, Iowa, presides over a large practice that encompasses a number of middle-sized communities in the “Quad Cities” area of northwest Illinois and southeast Iowa.
As this table from Market Scope clearly indicates, there is almost an exact correlation between the Consumer Confidence Index and the number of laser vision correction procedures performed in the United States.
The Confidence Index hit bottom in January of 2009. It then rebounded, but is now falling again.
Dr. Arbisser remembers the days when LASIK competition was cutthroat. He cites a large Chicago ophthalmology practice that opened a laser-equipped satellite office in his area and advertised in the local media to attract refractive patients. He also remembers another Chicago practice that opened a local office and had a doctor who showed up once a week.
“When they obtained refractive patients here, they would fly them to their surgicenter in Chicago,” recalls Dr. Arbisser. “That has ended. These marginal services from distant providers have declined and their advertising no longer appears in our local media.”
Dr. Arbisser says that Eye Surgeons Associates has maintained its refractive volume with a relatively simple and straightforward marketing strategy.
“We've maintained our marketing program throughout this down cycle and have not experienced a decline in procedures,” he notes. “We feature one refractive surgeon whose team provides both excellent patient care and results. He has thousands of satisfied patients spanning years of service. This is against the backdrop of a well-respected and the area's largest multispecialty group.”
Jim Feinstein of TLC/Sightpath also notes the effect of reduced competition in the corporate area of laser vision correction.
“Some of the discounters are no longer in the picture,” Mr. Feinstein says. “There's definitely less competition now. I think having only two strong corporate providers (TLC and LCA-Vision) is a good thing.”
Better Technology; Better Outcomes
In speaking to ophthalmologists and executives who are involved in laser vision correction on a daily basis, the issue of improved technology as a driver of procedure volume brings mixed views. In marketing laser vision correction, featuring the ability of the surgeon is deemed far more important than promoting the technology.
“Everybody contemplating LASIK has been on the Internet and they come in knowing all about the newest procedures and femtosecond lasers,” says one refractive surgeon. “You are not going to impress anyone with your technology these days.”
“Today, surgeons must offer customized and bladeless procedures,” says Dr. Probst. “The patients expect it. Technology may be a driver, but it's a slow driver. We now have the technology to consistently produce great outcomes.”
Dr. Probst presented a study at this year's ARVO reporting on 1,510 eyes that underwent wavefront-guided LASIK using VisX CustomVue technology and IntraLase flaps. The results showed that 95.6% of the eyes were 20/20 or better at three months.
Dave Thomas, COO/Co-leader of LCA-Vision, cited a study recently done by his company in which 180 refractive surgery patients who had their procedures performed at three LCA-Vision centers all had 20/20 or better with no enhancements needed. Asked whether LCA-Vision would be able to promote these stellar results to improve procedure volume, Mr. Thomas said: “We're about to find out.”
In addition to focusing on outcomes, LCA-Vision is currently creating awareness by partnering with the “Wounded Warriors Project” to provide free laser vision correction to veterans with disabilities and their spouses or caregivers.
Steve Schallhorn, MD, of San Diego, and a colleague studied more than 28,000 wavefront-guided LASIK procedures performed with the VisX Star s4 using IntraLase and concluded that 20/20 or better outcomes are now the norm.
“Technical advances such as femtosecond laser flaps, advanced Fourier wavefront analysis, variable spot scanning, iris registration and custom ablation have continuously improved laser vision correction results,” Dr. Schallhorn wrote in a paper presented at the 2010 ARVO meeting. “Patients treated with the latest LVC technology can reasonably expect to achieve better than 20/20 UCVA and are more likely to be satisfied with the procedure when this expectation is met.”
Clearly, the bad old days of inexperienced surgeons using imperfect technology to produce poor — or even disastrous — outcomes are over. When most experienced LASIK surgeons can obtain the aforementioned high-quality results, delivering consistent high-quality outcomes should no longer be an issue.
Building and then maintaining a network of local optometrists who will refer potential refractive patients to your practice can be a great source of procedure volume. However, this is no easy task. Gaining the long-term trust of optometrists who may fear that they will lose their patients to your more comprehensive practice requires a great deal of discussion, diplomacy and tact.
“It's not even that we try to take patients from ODs,” says Andrew Rabinowitz, MD, of Phoenix. “Many patients decide for themselves that they would prefer to trust their eyes to an MD. When I receive a referral from an optometrist, I am very careful to tell the patient that the OD did a good thing by diagnosing what could be a problem and acting in the best interest of the patient. I encourage the patient to continue his or her relationship with the OD.”
Dr. Arbisser says he has encountered what he calls “self-protective” behavior by optometrists in his area who prefer to co-manage potential refractive patients with a distant provider rather than work with his highly respected local ophthalmology practice.
TLC has been quite successful in building optometrist referral networks, with one reason possibly being that TLC focuses on laser vision correction and is no threat to take patients from an optometry practice.
An upside to the current slump is that larger optometry practices that may have once considered bringing in their own surgeon and laser(s) to perform refractive procedures onsite may now have abandoned that idea and may be more willing to refer to local ophthalmology practices.
Alcon's AcrySof CacheT phakic IOL is in late-stage clinical trials in the US. It could provide a boost to phakic IOL procedures.
The Appeal of Phakic IOLs
The recent annual Duffey/Leaming surveys of refractive surgeons have shown that phakic IOLs are the procedure of choice for correcting the vision of high myopes. Though more expensive than a LASIK procedure, phakic IOLs may offer more potential for volume growth than most ophthalmologists believe.
Advocates of phakic IOLs assert that these lenses can provide superior vision to a patient for many decades, have low complication rates with appropriate patient selection and monitoring, require a low level of postop care and can be explanted without much difficulty if the need arises. In addition, implanting phakic IOLs can provide a relatively easy entry into refractive surgery for cataract surgeons.
Some US surgeons who have extensive experience in implanting phakic IOLs give them high marks for providing excellent quality of vision for pre-presbyopic higher myopes and moderate myopes. The large majority of these patients are not good candidates for LASIK, but some practices report that even LASIK qualifiers — such as professional photographers and race car drivers — have opted for phakic IOLs based on individual needs for the best possible visual result.
And phakic IOLs may soon become more visible. Alcon's angle-supported AcrySof CacheT phakic IOL has won high praise from surgeons who have implanted it in late-stage clinical trials. With Alcon in the phakic marketplace, awareness of this option could soar. In addition, the long-awaited approval of the Visian toric phakic, whenever that occurs, could provide an additional boost.
Advertising and Marketing
There is no single strategy that will result in maximizing the return from dollars spent on advertising and marketing, especially in a slumping market. Some practices have told Ophthalmology Management that they minimize (or even eliminate) these expenditures and depend on delivering superior outcomes that result in word-of-mouth referrals from satisfied patients. Other practices find that lower-cost initiatives such as targeted direct mail are effective. Still other practices focus on reaching people who have healthcare savings accounts, as these individuals are more likely to spend as laser vision correction because they don't view it as an out-of-pocket expense.
A partner in a large Southwestern practice offers this advice: “If your marketing strategies have been working for you, continue them,” he asserts. “But this is no time to spend heavily on a new type of campaign that you have never tried before. If the campaign fails, you will not have money to spend when the LASIK market bounces back. And when the market does come back, laser vision correction will be quite profitable because there will be less competition.”
And of course, offering appealing financing options is a must for any practice providing laser vision correction. Be sure to work with a financing company that has a good track record in laser vision correction and that employs a strict but user-friendly application process to qualify patients.
The Back-to-Basics Approach
If none of the above-mentioned options appeal to your practice and you truly believe that refractive procedures will have to stay on the back burner for awhile, you can do what some practices are doing and build other areas of the practice to make up for the current shortfall in refractive revenues.
This could mean adding a glaucoma or retina specialist to the practice, or perhaps paying more attention to treating the widespread (and often neglected) problem of dry eye.
In any case, pure demographics will soon take a hand in providing surgeons with more candidates for laser vision correction. Though the average baby boomer is now about 60 years old and no longer a candidate for LASIK, the huge cohort of children of the baby boom generation are now in their late 20s and early-to-mid 30s and thus reaching prime age for laser vision correction and phakic IOLs. This is the generation — often called Generation Y — that will be the target market for the next boom in laser vision correction. OM