Profitability: LASIK Versus Phakic IOLs

As the Chief Executive Officer of the Barnet Dulaney Perkins Eye Center in Phoenix, part of my responsibility is to stay on the cutting edge of new vision correction technologies. I cannot speak as a surgeon; however, I do have more than 15 years' experience introducing the latest ophthalmic technologies into our practice.

When considering the addition of a new technology, I always look at profitability, patient satisfaction, and the amount of risk associated with the product or procedure. From a business perspective, phakic IOLs are the current wave of refractive surgery. If you are not vested with phakic IOLs as part of your business model, you run the risk of becoming antiquated; you must maintain current, in-demand options that patients will undoubtedly request. In these difficult economic times, with steep competition, phakic IOLs distinguish you from the practice offering only LASIK.

The Barnet Dulaney Perkins Eye Center is also a research and development center. As such, we have participated in more than 20 clinical trials, including the US Food and Drug Administration (FDA) trial of the Visian ICL (STAAR Surgical, Monrovia, California), started by David Dulaney, MD, approximately 12 years ago. By the time the ICL received FDA approval in 2006, we had implanted 213 phakic IOLs. More important than the volume, we had an enormous amount of time experience with patients. Now, we routinely perform 30 to 50 phakic IOL procedures per month, with 30% to 40% of our vision correction procedures as lens-based solutions. However, our volume was not always this high.

CHANGE YOUR INTERNAL SYSTEM FIRST
The truth is that implementing the phakic IOL into our practice did not render the success we had anticipated until we changed our internal system. In that first year after FDA approval, we were performing only four per month. The following year, as the demand for correcting high myopia increased, physician concerns with the risk for ectasia came into play, and the sensitivity to some of the risks of LASIK heightened, we improved only to performing six procedures per month.

At that point, we had more experience than anyone else in the country and we knew the lack of volume increase had to be an internal issue due to how we were presenting phakic IOLs to patients as a solution. Once we redesigned how the phakic IOL was introduced to our patients and modified clinical protocols to make the whole experience more like LASIK, the results not only happened overnight but have since been sustained. As of this month, we are now over 1,000 phakic IOLs implanted.

The sidebar Evaluating the Barriers to the Phakic IOL supplies a brief description of the major barriers we faced. Like most practices, we were offering phakic IOLs as the procedure of exclusion, meaning we offered the phakic IOL if the patient was not a candidate for LASIK. Now, we view the ICL as a premium solution to vision correction. We advocate the phakic IOL for all ranges that the lenses are available in, starting at -3.00 D. We use it for moderate myopia as well as high myopia. This has been a good change for the practice, and our volume has increased tremendously.

HIGH-DEFINITION CORRECTION
LASIK is a good solution—but phakic IOLs are a better solution for many patients. We use the following analogy: Although many TVs have a great picture, high-definition TVs with high-definition delivery systems offer the best quality. The phakic IOL is like the high-definition option. However, many surgeons continue to focus on LASIK for a couple of reasons, including perceived safety and profitability.

Is LASIK a safer option over phakic IOLs? I have analyzed claims data on 175 vision correction lawsuits over the past 5 years, looking at the risk factors and issues that create litigation against refractive surgeons.¹ Virtually none of the issues applies to the phakic IOL: flap-related complications, ectasia, decentration, poor night vision, informed consent, and dry eye. A damages claim must also be part of the lawsuit, showing that the damage is irreversible. Because the ICL may be removed, the eye should return to its original status when the patient first came in. Their eye has not been altered, so you mitigate much of any damage claim. Certainly, there are still risks with the phakic IOL, like developing a cataract, infection, and implant sizing; however, the incidence is almost negligible and resovable.

Most surgeons do not account for the cost of risk in their profit and loss analysis. But, it is a large component of profitability. The phakic IOL is a much lower risk procedure, for the surgeon and the patient, compared with LASIK.

Is LASIK more profitable compared with phakic IOLs? Even at a pretty aggressive price point, ICLs are more profitable. We charge $2,995 for the ICL and $1,995 for LASIK. Whereas LASIK has always been sensitive to the economic environment, lens-based vision correction solutions do not follow the same economic fluctuations. (See Consumer Confidence Index for more information.) Additionally, we have noticed that as we increase the number of phakic IOLs relative to the number of LASIK procedures, our profit margin increases. We have kept the overall number of procedures the same but changed the blend.

I designed a refractive surgery profitability model that allow one to input elements of revenue and cost to assess the profitability of phakic IOLs versus LASIK. This model depicts the practice's operating margins and shows how altering the price or volume for both procedures will affect the bottom line. For example, Figure 1 looks at the profitability of 120 refractive procedures (a mix of phakic IOLs and LASIK). When all 120 procedures are LASIK, the annual profit margin is $579,255. If 70 procedures are phakic IOLs and 50 are LASIK, the annual profit margin balloons to $903,387. At our center, we have found that the price point for phakic IOLs must be within $500 to $1,000 of our most expensive LASIK procedure. Then, we are not pricing ourselves out of the market.

This refractive surgery profitability model is available to anyone via their STAAR Surgical representative or by e-mailing me for more information.

CONCLUSION
With all of my experience in business modeling, the biggest piece of advice I can offer someone who is considering the phakic IOL is to quit thinking about it and just do it. It is the lens-based solutions that will prevail in the refractive market. After remodeling our practice, our profitability has been steady, and patients have been satisfied with their long-term outcomes. Phakic IOLs have differentiated our practice from other refractive centers, and this will give our business a more stable foundation in this tough economic market.

Mark Rosenberg is the Chief Executive Officer of the Barnet Dulaney Perkins Eye Center, Phoenix. Mr. Rosenberg may be reached at tel: +602 508-4808; e-mail: mrosenberg@bdpec.com.

1. Rosenberg M. Update on Captives and Malpractice. Paper presented at the Aspen Invitational Refractive Symposium; Aspen, Colorado; March 9-12, 2008.