Laser assisted cataract surgery (LACS) was introduced to ophthalmology in 2010 with the FDA approval of the LenSx 550 femtosecond laser. At that time, LenSx was a privately held company and today it is owned by Alcon, the largest eye care company in the world.
Today there are nearly 400 femtosecond lasers for cataract surgery placed in the United States. Alcon leads this market with an eye-popping estimated 70% share and this should come as no surprise given their dominance in the industry. The term “placed” in the United States is what may prove to be the gradual, rising seismic event that impacts our industry for years to come and is the commercial strategy used by the three companies who comprise the other 30% of the market.
What intrigues people about this market is the raw size of the US cataract market, it is huge by any standard. To get an idea about why this is so captivating, consider these estimates:
- 5500 surgical facilities performing cataract surgery
- 8500 surgical ophthalmologists
- 3,600,000 cataract extraction procedures performed annually
- Medicare funds 80% of procedures
- According to U.S. Census Bureau projections, the number of U.S. citizens age 65 years and older is expected to rise from 38.7 million in 2008 to 88.5 million in 2050
- 10,000 people per day turning for the next 20 years
The above data should help to convince you that the market is large, growing and dynamic – characteristics sought by established businesses, entrepreneurs and speculators alike.
To answer this question, it’s best to reflect on where we’ve been from a technology, surgical procedure and reimbursement perspective.
The span of this changing timeframe for me is 23 years. During this period I have participated in the evolution of many surgeons along the continuum of adoption of new technology and an evolving procedure. This ranges from extra capsular cataract extraction (ECCE) to EECE with phacoemulsification, the quest for smaller incisions to aid in recovery and improve visual outcomes through Intraocular Lens Implant (IOL) technology and the new era of laser assisted cataract surgery and patient funded models.
The three legs of the stool that I mention above are technology, the surgical procedure and reimbursement. I call it a “stool” because the three of them are inextricably linked by their dependence on each other and the ability of any one to influence the other in a bi-directional manner. If one is removed, the whole thing topples over.
In the past, new technology was introduced by industry, sold to surgeons and paid for by a facility. To say that the patient wasn’t part of the equation is not accurate, they are almost always at the center of decisions made by doctors and surgical facilities. Like anything, there are exceptions and in my experience, these instances are rare.
Compare that to today where the patient is accustomed to advertising by MDs, medical groups and manufacturers that help them understand that they have choices and options. Along with these options, patients are presented with opportunities to avail themselves of these new technologies and services with an investment by them.
Another factor is the equipment involved. In the past, many in the industry side of ophthalmology viewed the phacoemuslification equipment as the “anchor of the O.R..” They viewed it this way because it was the highest capital investment for cataract surgery and once selected by the surgeon had a tendency to drive many other product related decisions such as IOLs, viscolastics and various consumable products used to perform the surgery. It’s a terrific strategy and the company that mastered this form of selling is Alcon and it’s referred to in the industry as “the Alcon Bundle.”
Today the foundational piece of equipment driving decisions in the O.R. is quickly becoming the femtosecond laser for cataract surgery. Why is this and how is it different from a phaco machine?
First, economics. A phaco machine costs around $50,000, lasts about 7-10 years, a surgical technician can run it, disposable costs to run the machine are about $50 per cataract procedure and an annual maintenance agreement is roughly $5000. Compare this to an FS Laser for cataract surgery that costs $400,000, has an annual maintenance contract of $40,000, requires a patient interface device for each case that costs $325 and you need a person that’s more of a “Geek Squad” type to run the device. It’s just a different deal altogether. And using the FS Laser for cataract surgery does not obviate the need for a phaco machine, you still need it to remove the cataract.
For many, this economic picture creates fear and confusion. Couple this with patients who now arrive in the office asking for certain surgical methods, expecting a certain outcome and it is not hard to understand why many are stressed out about where this whole things will end-up.
This new landscape is driving a change that many in the industry are afraid of and leaves them groping for rationalizations and hope that things can just stay like they are today. The good news is that things simply do not stay the way that they are today no matter badly how bad we want them to or denigrate whatever is new to artificially prop-up the current method.
Innovation is rarely a leap-and-bound type of improvement. Most often, it’s an incremental, and sometimes imperceptible, shift toward how things will be in the future. Granted, not everyone can and should be an innovator, it comes with a price. Yet, times are changing.
A patient armed with information, albeit sometimes inaccurate information, impacts the patriarchal relationship between patient and physician. A physician may spend as much time explaining to a patient why they are not a candidate for a technology that they have read about as they do discussing the surgery itself. This is the retail-like reality of the environment of today’s physician. There is rarely one, proven way to accomplish anything when it comes to the human body. We are, after all, individuals and that’s what makes us great! Offering options makes good business sense.
People want and expect choices.
Where is it going?
Predicting the future is risky. I believe that the femtosecond laser used in cataract surgery will cause ophthalmologists to think differently about how they interact with patients. The day that a retail component was foisted upon a decision process that was largely controlled by the beliefs, training and opinions of one person was like a Tsunami to that relationship. In the same way that a Tsunami begins with a seismic shift somewhere far out in the ocean and grows into a tidal wave that cannot be ignored, “retail” cataract surgery is here and it’s not going away.
Services and market data driven decisions will influence the practice of medicine over the next decade. People want options, messages that help them make better, more informed choices are what will help practices grow from where they are today to what they decide they want to be tomorrow. People want their physician to be collaborative, many are willing to pay for that privilege and things staying the same is not an option. Shifts happen.