The Economics of Femtosecond Laser-assisted Cataract Surgery

John D. Bartlett; Kevin M. Miller

Disclosures

Curr Opin Ophthalmol. 2016;27(1):76-81. 

In This Article

Financial Scenarios

Femtosecond lasers are expensive. As such, it makes sense to evaluate the expected cost versus the expected additional revenue generated before purchasing a new laser and planning to perform FLACS. The cost includes the purchase price of the laser itself, of course, but should also include the cost of financing, a service agreement, the 'per click' or per procedure disposables cost, the cost of future software and hardware upgrades, and other costs, like the cost of building out a procedure room and increased technician time.

We have considered two hypothetical laser purchase scenarios (Figs. 1 and 2). These two scenarios, for simplicity sake, include the purchase price of the laser estimated at US $450 000, a service contract costing US $40 000 per year after the first year, and an interface device or per procedure fee estimated at US $400 per patient. One scenario assumes no financing fee and one with 7% financing. The costs are then calculated as a breakeven cost per patient for various numbers of cases per year and over a range of 5–8 years of service of the laser.

Figure 1.

Hypothetical breakeven financial scenario, part 1.

Figure 2.

Hypothetical breakeven financial scenario, part 2.

We feel that these ranges show the financial limits of the use of FLACS. At the high expense end, with just 5 years of laser lifespan, financing, and with a low volume of 250 cases per year, the cost per patient is estimated at US $956 per patient. Owning a laser at this level is probably not reasonable as it may be difficult to command premiums at a commensurate level. At the other end of the spectrum, with a laser lifespan of 8 years, without financing, and with a high volume of 1500 cases per year, the cost falls to US $461 per patient. At this cost level, patient charges could almost certainly support additional clinical revenue above costs. However, 1500 cases per year over an average 240 work days per year means that a femtosecond laser would need to be used for an average of 6.25 cases per day every day, a level of utilization that might be difficult for many practices or surgery centers.

It is worth mentioning that with increased competition among femtosecond laser producers, some manufacturers are willing to provide machines on a lease basis, with higher per use charges and mandatory minimum cases volumes instead of traditional purchase arrangements. These arrangements could allow ophthalmologists to utilize FLACS technology at lower upfront financial risk, but would blunt the potential economic returns.

According to a 2013 survey of FLACS users,[15] practices were able to charge an additional $1058 for the use of the femtosecond laser in conventional IOL cases. This would seem to support the use of FLACS even in the most stringent conditions of our scenarios. However, in the same survey FLACS users reported smaller increases in revenue when using the laser in toric or multifocal lens cases of US $664 and US $673, respectively. Hence, the average expected additional revenue for FLACS depends upon the rate of usage of premium lenses prior to instituting FLACS, as seen in Fig. 3, and if or how premium IOL use is bundled with femtosecond laser. Some reports from early adopters of FLACS report that up to 70% of their patients opt for the femtosecond laser whereas others report a 30% conversion rate.[15,16] As an out-of-pocket procedure, the use rate will be dependent upon a host of factors like the financial situation of the target patient population and patients' perceptions of the added value of FLACS. Given our experience with premium lenses, the 30% rate is probably more reasonable as a generalization. The scenarios in Fig. 3 illustrate the estimated increased revenue for practices with a variety of pre-FLACS premium lens usage rates, in which all those premium lens patients are among the either 30 or 70% of cases converted to FLACS. The higher the usage of premium lenses prior to FLACS, the lower the relative revenue gain achieved with FLACS. Here we can see that a practice that has positioned itself to provide lower volume but higher premium lens usage may find that the economics of FLACS are less advantageous, and may merely serve to cannibalize their preexisting premium services.

Figure 3.

Additional charges per FLACS case.

One last area of cost that must be considered is efficiency. FLACS takes longer to perform than routine phacoemulsification. The patient must be positioned at the laser, the laser adjusted, and treatment applied. Then the patient must be moved to another room for surgery or repositioned in the same room for the remainder of the cataract procedure. This extra time translates into a decreased number of procedures per day, with some FLACS users reporting a decrease in number of cases per day of as much as 30–50%.[17,18]

We have put all the numbers together for a theoretical surgeon (Fig. 4). We will assume that he or she is currently performing an average of 500 surgeries per year. Currently, 15% of these cases include refractive services.

Figure 4.

Additional practice revenue per year.

Under the least advantageous scenario our surgeon has decided to purchase the laser himself or herself, convinces 30% of his or her patients to pay for the laser, and experiences a 30% decline in productivity because of the laser. This results in 105 cases generating an additional US $102 375 of revenue, but with additional costs of US $164 010, a net loss of US $61 635. Clearly, this is not a sustainable situation and suggests that lone practitioners may not find FLACS a viable procedure. Certainly, the situation improves if our surgeon uses a shared laser with a total volume of 1000 cases per year. The total cost for 105 cases falls to US $54 810, netting the surgeon US $47 565. We think this is probably the most like general scenario, larger groups of average volume surgeons banding together to purchase a laser.

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