Eye-care industry growth may signal need for the office-based surgical suite

March 15, 2008

With many Americans nearing the age of 60, refractive surgery will be at the forefront of most practices, and Jay Greiling, president of EyeOR said he questions their ability to handle this increase in patients.

San Diego-The baby boomers have been through it all, but they aren't done yet. Over the horizon is another hurdle: impaired vision. At the annual meeting of the American Society of Ophthalmic Administrators, Jay Greiling, president of EyeOR, spoke about "The Future of Refractive Surgery: Using the Office-Based Surgical Suite." He estimated a 40% growth rate in refractive surgery within the next 5 to 10 years due to factors such as the baby-boomer generation.

According to the U.S. Census Bureau, there were 78.2 million baby boomers as of July 1, 2005. With many Americans nearing the age of 60, refractive surgery will be at the forefront of most practices, and Greiling said he questions their ability to handle this increase in patients. "The question is, can the practice perform these surgeries profitably in a traditional operating room, Medicare certified, and if they can, [can they do it] safely?" asked Greiling.

Growing market

"If you add them all together, we're talking about a market that's going to grow to almost half a million procedures by the year 2010 at a rather steep growth rate," Greiling said. "If we assume that the phakic implant charge to the patients is $3,500 and the RLE is $4,000 an eye the market size is almost approaching $2 billion dollars in the United States by the year 2010 on an annual basis."

From the standpoint of cash intraocular refractive procedures outside of Medicare, the mix of RLE and phakic implants is about an 80/20 mix, in which phakic procedures are at about 22% and RLE is at 78%.

"The highest [U.S. data] point is the cataract standard traditional monofocal lens, and these are number of procedures projected by MarketScope from 2004 to 2010," said Greiling. "As you can see, the others are moving up the scale, but by and large, Medicare cataract procedures in a practice are the majority."

Using the same assumptions as before, with RLE being $4,000, phakic implants at $3,500, multifocal or accommodative premium lens upgrades for Medicare patients being an extra $2,000, and standard cataract procedures at $750, and analyzing these numbers again from a standpoint of revenue generated by the practice, Greiling said he found that RLE led the way.

Currently, procedures are divided into these percentages: 54% are cataract with a monofocal lens, 10% are phakic, 22 % are RLE, and 14% are cataract with a multifocal accommodative upgrade.

By 2010, this is how much they will change: 25% will be traditional cataract Medicare patient with a traditional monofocal lens, 27% will be upgraded premium lens for Medicare patients, 34% will be RLE, and 14% will be phakic implants.

"It's really not a matter of whether the progressive refractive surgeon will do these procedures," said Greiling. "It's a matter of where's the best place to perform these procedures when taking into account all the factors of cost, benefit, safety, etc."