December 9, 2000Laser Eye Centers Wage an All-Out Price WarBy MILT FREUDENHEIM Beneath a photographic blowup of bloodshot blue eyes, a surgery center in Fort Wayne, Ind., advertises laser procedures, urging people with poor eyesight to enjoy life without contacts or glasses and "see better, look better, feel better." And all for "$33 a month per eye or $995 per eye."Other centers charge more, the newspaper ad says — from $1,499 an eye to $2,699.Advertisements for surgery centers in other communities trumpet "introductory offers" of $499 an eye for the first 1,000 callers and cut-price holiday specials.Breaking a longstanding tradition of silence about most surgical charges, eye surgery centers across the country have started price wars waged through color display ads in newspapers and ubiquitous radio and television commercials. Among the advertisers emphasizing low prices are several young national chains of surgery centers that are moving quickly into many new cities."This is all new," said Dr. Sandra Belmont, director of the laser vision center at Weill Cornell Medical Center in New York and a spokeswoman for the American Academy of Ophthalmology, a professional group. Dr. Belmont and many other doctors deplore the flaunting of prices as unprofessional. They warn that people excited by the bargain prices may not pay enough attention to the ability and experience of the surgeons offering them. "Patients should not choose their doctor based on price," she said.But the surgery centers that are advertising say the price cutting does not affect the quality. They say candidly that eye surgery is now a commodity like corn flakes or aspirin. So common and accepted are the procedures, these people say, that they can even be viewed as they occur, for example, on "The Today Show," and through show windows in shopping malls, alongside the pizza shops and lingerie emporiums. "It is like any other product or commodity that people want to purchase when they realize it is affordable and is acceptable," said Ghassan Barazi, president of Icon Laser Eye Centers, based in Toronto, an active advertiser. "We tell the patients what that price will include," Mr. Barazi said. "It does not mean that the quality of the procedure should go down." He added: "Normally, we have an introductory price when we enter a new market, $499 per eye for the first 1,000 patients that call. The normal price, nationwide, is $999 per eye."Dr. David Kessler, dean of the Yale Medical School and the former commissioner of the Food and Drug Administration, protested that eye surgery entails "too many risks, too much at stake, to be treated as just another commodity." He added, "This is the corporatization of medicine in the most extreme form."But Robert J. Blendon, a professor of health policy at the Harvard School of Public Health, said the advertising "makes enormous sense; it informs a share of the public that they could afford it by seeing the price." The Supreme Court gave a green light to advertising by doctors in a 1982 decision that overturned an American Medical Association ban. The court ruled that truthful advertising by professional people was entitled to First Amendment and antitrust protection.Health care experts say the ads for laser eye surgery are harbingers of radical changes in acceptable behavior as the profession of medicine melds with business."Medicine is turning more and more toward the practices of the marketplace and business," said Arthur L. Caplan, director of the center for bioethics at the University of Pennsylvania. "Direct-to-consumer advertising of prescription drugs, bids on the Internet, doctors joining unions and battling employers about wages — it's part of a whole shift, a visible part of that iceberg."On the Internet, cosmetic surgeons offer bargain prices for liposuction and breast "lifts." But the price war for laser eye surgery is much more widespread, and includes print and broadcast advertising.This is hardly the first time that doctors fleeing managed care have rushed into a market where patients are willing to use their own money to pay for services. And with managed care diverting routine eye care to optometrists, many ophthalmologists are now primarily surgeons operating under brutal business pressures.The competition for patients is leading to price cutting. The price for laser eye surgery, including operations offered by companies and hospital centers that still charge $2,750 for each eye, dropped to $1,650, on average, recently from as high as $3,000. There has been a similar drop for cataract surgery; the costs, typically covered by health insurance, can be $1,400 to $2,000 for each eye, down from $3,000 when the procedure was new.Surgery centers are spending $200 a procedure, on average, on advertising, or $300 million annually, according to Dave Harmon, president of Market Scope, a research company in St. Louis. Market Scope collects information each month from 25 percent of the 3,500 surgeons performing the procedures. Endorsements are also fueling demand for the surgery. Tiger Woods gives testimonials for the TLC Laser Eye Centers chain — although TLC has tried to avoid price cutting — and Icon bills itself as the official eye surgery company for the Phoenix Suns basketball team.Fueled by the price cuts and endorsements, the number of laser eye procedures in the United States doubled last year to more than 950,000, according to Mr. Harmon. He expects the number of procedures to exceed 1.5 million this year. Industry executives say 60 million people are, in theory, candidates to have the shape of their eyes surgically altered.In the most common type of laser eye surgery, which takes 10 to 15 minutes, a surgeon slices the eyeball, lifts a hinged flap and directs a computer-programmed laser to change the curvature of the eye. The flap is put back and left to heal. At $1,650 a procedure, on average, Americans will spend $2.43 billion this year on laser eye surgery. Almost all of them will pay out of pocket. Insurance almost never pays for the procedures, which insurers classify as elective cosmetic surgery. While independent ophthalmologists perform 4 in 10 of the procedures, eye surgery chains performed almost half of all laser eye surgeries in the latest tally. Hospitals accounted for the rest. Not all the surgeons are equally capable. "We see the best, and we see the worst," said Howard Braverman, a doctor of optometry in Miami who is president of the American Optometric Association. Optometrists often advise patients on whether the surgery is appropriate. Some receive a sizable fee from the surgery centers for evaluation beforehand and care after the procedure."We see the business side of medicine," Dr. Braverman said. "Companies will come into a city and hire a surgeon who isn't busy and make him a refractive surgeon. He becomes the low-priced surgeon."He said that ophthalmologists who lacked experience might be unable to deal with complications after surgery. "There will always be some complications," he said. Although several studies have shown a correlation between a surgeon's length of experience and successful outcomes, there have been no studies of whether there is a link between the cost of the surgery and the outcome. Aaron Levine, a medical malpractice lawyer in Washington, said he knew of at least 50 people who had had serious complications after laser surgery. "Their vision was worse after the procedure," he said, but most had signed informed-consent documents saying they were aware of the hazards, which made it hard to seek damages.Ron Link, executive director of the Surgical Eyes Foundation, which operates www.surgicaleyes.org, a patients' information Web site, said he knew of 30 more such cases. The site has heard from more than 1,400 patients who have reported complications, he said. "The surgeon's experience is the most important thing," said Irving J. Arons, a vision industry consultant in Peabody, Mass. "With the best doctors, the complication rate is probably less than 1 percent."Dr. Richard Foulkes, an ophthalmologist in Hinsdale, Ill., outside Chicago, said there really was a difference among surgery centers. He used to work for a laser surgery discount chain that asked him "to do 30 patients a day, or three patients an hour — that was too much." Now he runs the Chicago operations of Icon. "We perform approximately two cases per hour, 15 minutes for the procedure and 15 minutes to get to know your patient and study your charts," Dr. Foulkes said.Lasik Vision, a Vancouver-based company that started the price-cutting competition in Canada in early 1998 and opened its first clinic in the United States in Seattle last January, said it now performed more procedures than any eye group. "Let's face it, we're the pariah of this industry," said James Watson, executive vice president of Lasik Vision. "They all hate us because we were the people who lowered the price."
I participated in an newspaper investigation on Lasik eye centers. A reporter friend recruited me. When I looked at surgery last year I was told by my surgeon that I probably should not have the surgery since I have a rather high correction (~-9.5) with a moderately thin cornea. Specifically, he said there would not be enough cornea left to do a "touch up" if the first operation did not prove satisfactory. My doc said, "I would be one of the best to do the surgery if you want it, but I recommend against it." I asked if he would allow his son to have the surgery under the same conditions (a friend from high school), my doc said "never."I visited seven surgery centers in the Denver metro area with fees ranging from $700 to $1500 per eye. My eye exam/screening was conducted by a "technician" in all cases. In all 7 cases I was informed that I was a marginal patient. Two said they did not recommend the procedure for me and would strongly recommend against it. Three said my thin cornea was a problem and recommended I not have the surgery, but they would do it if I wanted. The final two surgeons said there was a risk but minimized it and recommended the surgery saying I probably won't need a "touch up." (Never mind there would be little to touch up.)Although all the surgery centers identified the risk, they differed in their interpretation. (BTW: The cheapest clinic was one of the "no way" group.) My recommendations:- You have a pair of eyes, be sure to get a pair of opinions unless you have a reason to trust your practictioner. - If the doctor identifies any additional risk such as a thin cornea, diabetes, etc., listen carefully to the recommendations. Research the risk. My personal advice would be to forget about surgery. The risk of complications is just not worth it!- Price does not necessarily equal quality. (I wish I had noted the type of car driven by each doctor!)Be careful out there!terrynor
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates, Analyst Rat