Is eye care slowly ‘industrializing?’

As the demand for ophthalmic services grows, while fees continue to fall and practice costs rise, the methods by which treatment is administered must be modified.

Issue: May 10, 2008

ByJohn B. Pinto

John B. Pinto

What do you think of when you hear the word “industrialize?” Smokestacks? Sweatshops? Grit? Nothing to do with the profession and the business of eye care, right? Think again.

In the career span of this column’s youngest readers, we will witness a profound shift in the way that eye care is delivered. We will have to.

Health care now consumes more than 16% of every gross domestic product dollar in America, and the cost of care is rising at nearly three times the growth rate of the general economy. Although the total U.S. population is growing at about 1% per year and the net number of practicing eye surgeons is growing at the same rate, the demand for ophthalmic services is growing at an estimated 3% to 5% per year because of the rapid rise in the number of seniors. We will have to industrialize the delivery of care just to keep up with the demand for services, much less to sustain surgeon incomes in the face of falling fees.

This “industrialization” is nothing new in eye care. It has been playing out slowly over the past two generations or longer.

Even the most vanguard eye surgeons could once only perform a few cataract cases per week. New techniques and technology now allow America’s busiest surgeons to treat dozens of eyes a week — four to six cases per hour in the fastest hands.
It was once common to see no more than 20 or 30 patients in a clinic day. The doctor took all measurements and did all special testing and worked out of one or two rooms. Economically viable practices now transit 45 or more patients per day, and 60-plus patient days are now fairly common. To accomplish this, the typical ophthalmologist is now supported by one technician for every six to 15 daily patient visits.
Technologic sophistication — and cost — is exploding. Forty years ago, in inflation-adjusted terms, the typical eye surgeon (with no computers, OCTs or personal lasers to buy) made total capital investments of $100,000 or less to equip a fairly modern office. Today it is easy for a soloist to spend $300,000 on a basic, starter suite of capital goods.

Of course, this ramp-up in cost and productivity has been accompanied by a persistent reduction in the value paid per unit of service. In just one dimension, the price paid for cataract surgery, the professional fee has fallen by 99% in the last 40 years. (Do the math. Remember when gold was $35 per ounce and surgical fees were $2,500? Today’s surgical fees are lower than the price of a good brake job, and gold has now crested the $1,000 per ounce mark.)

Count on the industrialization of eye care to continue apace. As much as you may bridle at this evolution in the medical arts, this shift is not entirely bad.

Natural progression

Before food production was industrialized — initially with the invention of farming and over and over again with draft animals, mechanized farming and synthetic fertilizers — feeding yourself was an uncertain, time-consuming enterprise.

Before the industrial revolution, most goods were precious, rare, costly and reserved for the wealthy alone because they were made by hand.

Until papermaking, printing and binding were industrialized in the 15th century, reading was a privilege reserved solely for the wealthy and the clergy.

The common man of 16th-century Europe owned one or two changes of clothes, not the closet full eventually allowed by industrialized weaving, cutting and sewing.

Until recording and playback technology allowed music to be industrialized, you either had to play your own music or be among the elite who could afford to hire an orchestra for Saturday’s party at the family estate.

Carpentry is being industrialized (with nail guns and pre-fab housing). Teaching is being industrialized (with larger classes and online education). Cobblers and farriers have nearly been industrialized out of existence. But the intimate, delicate, one-on-one professional delivery of eye care services is one of the last human pursuits that has not yet been materially industrialized.

Eye surgeons now stand alongside a diminishing pool of professionals — trial lawyers, gardeners, fly-fishing guides and a few others — way at the back of the long human line marching toward industrialization. But as a surgeon, you are indeed marching, along with everyone else on your practice team.

I know that the idea of industrializing this august, elegant profession is distasteful to many. But perhaps there are compensations, both to society and to the individual provider. Before the earliest steps in industrialized health care, the medical arts were primitive, home-based and largely ineffective. Would you de-industrialize immunization? Perinatal care? The billions of antibiotic doses manufactured each year? Computer-designed and robotically milled IOLs?

Not that everything mass-produced is all that great compared with custom. Most of us would prefer to drive a hand-built Rolls Royce instead of the family Toyota. Or wear a bespoke suit from a London tailor over ready-to-wear threads. Or grace our living room with a $200,000 custom-engineered sound system instead of our plug-and-play outfit from Best Buy.

But the point is that almost everyone in the industrialized First World gets to enjoy pretty good cars, clothes and stereos. At the same time, the workers in these industries tend to make more than old-time craftsmen ever did.

By continuing to industrialize health care and eye care, in the most appropriate ways, we will hopefully be able to enjoy the good aspects of industrial scale and avoid the aspects that are less wholesome.

Future of eye surgeons

How will this all play out, specifically in eye care? How will your professional life change? How well will your talents be valued and rewarded in the future? Here are some predictions for the next generation of eye surgeons, changes that will wash over the profession (and it will remain a valued, well-compensated profession) at an accelerating pace over the next 35 years or so.

“Hyper” practices will proliferate. At first, this will not be driven by technology. Until technology can catch up, the only way for you to generate industrial volumes of patients as an eye doctor is to become a kind of machine yourself. Working harder, longer hours allows a 30-patient-per-day ophthalmologist to see 45 patients. Working harder, longer, more intensely and smarter hours can double this figure. Given the high fixed costs of running a private practice, these incremental patient volumes can keep up with and exceed the best efforts of third-party payers to give you a pay cut. Some surgeons — the quick-thinking, athletic and perky ones — are especially talented at this kind of ramping up. If you combine this tempo with redoubled efforts at affability (mastering the 30-second social exchange with patients who once loved chatting with you for 3 minutes), you cannot only elevate revenue but patient satisfaction.

Incomes will be redistributed. The historical, wide, bell-curve distribution of incomes in ophthalmology will continue to change, with a reduction in average, inflation-adjusted income for the majority of providers but an opportunity for significant incremental income for doctors who are willing to be at least a little bit industrial (and capitalist) in their practice management strategy, employing nonsurgical providers, technical staff and emerging technology to augment their personal productivity.

Depending on the future pace of health payment reform, bulk contracting may ensue. In the 1990s, there was a limited Medicare experiment to bid out blocks of cataracts to surgeons willing to lock in several thousand cases for a low, fixed global fee, including facility charges, professional fee and lens implant. Although this experiment was ultimately abandoned, bulk contracting for cataract care is still occasionally seen in the VA medical system. A return to block contracts would obviously help those few providers in a position to win the contracts and harm everyone else. Moves in this direction could shift American ophthalmology to the environment in some European countries, where a far higher percentage of ophthalmologists maintain a nonsurgical practice.

There will be far higher capital investments per provider. The typical eye clinic invests about $250,000 to $500,000 to support a single ophthalmologist. The vanguard clinic of the future may be investing $1 million or more per provider to automate the more mundane aspects of diagnosis and treatment and ramp up productivity. Opportunities will abound for equipment companies that are able to help beleaguered doctors increase their efficiency. This is analogous to, but obviously will stop well short of, what has happened in manufacturing around the world, in which multimillion dollar robotic systems, tended by a small number of technicians, are able to perform work faster, better and cheaper than human hands alone.

Mid-level providers will proliferate. The average ophthalmologist in private practice today is supported by perhaps a quarter of an optometrist and two or three technical staff. This leaves the typical surgeon spending up to half of each clinic day doing work that could be done by support staff. The most effective way to boost a surgeon’s economic productivity is to have him doing largely surgical and higher-level medical work. In the future, an individual surgeon will work with two or more optometrists and far more technicians than is the case today. The “MD-OD Integrated Care Model” is already proliferating. (See page 16 of this issue for more on this model.)

Eventually, we will have smart health cards. These cards, pulled out of a wallet or embedded in a subcutaneous chip, will contain the patient’s medical record as well as his health coverage benefits. Such cards will be scanned at a kiosk at check-in (just as we do today to check in at the airport for a flight). Just like at the airport, the patient (read “eye care passenger”) will then walk to each of the proper testing “gates,” be worked up by specialist-technicians, provisionally diagnosed by a super-tech or computer, given a draft treatment plan and (at the end of the assembly line) receive a final, brief over-read by the attending ophthalmologist. Portal to portal in 30 minutes or less, leaving plenty of time to pick out a new pair of glasses (if these still exist in the future.)

Risk of global competition

I do not expect your job as an eye surgeon is going to be outsourced to India or Mexico anytime soon. Although it makes some economic sense for expensive in-patient care to be off-shored and to take a hip joint replacement “vacation” in Mumbai, most forms of eye surgery are comparatively inexpensively delivered locally. Indeed, the reverse may occur. If the dollar continues to plummet, some East Coast surgeons can expect a growing European clientele.

The continued industrialization of health care and eye care will not eliminate the core art of medicine or the ability of especially talented, hands-on professionals to establish custom, niche practices. A few “concierge ophthalmologists” are already setting up shop in America today. Fine artists still paint. The best of them are in high demand. And the happiest would rather retire than become commercial artists. The same dynamics will play out in the next few generations of eye surgeons.

For more information:

John B. Pinto is president of J. Pinto & Associates Inc., an ophthalmic practice management consulting firm established in 1979. Mr. Pinto is the country’s most-published author on ophthalmology management topics. He is the author of John Pinto’s Little Green Book of Ophthalmology, Turnaround: 21 Weeks to Ophthalmic Practice Survival and Permanent Improvement, Cashflow: The Practical Art of Earning More From Your Ophthalmology Practice, The Efficient Ophthalmologist: How to See More Patients, Provide Better Care and Prosper in an Era of Falling Fees and The Women of Ophthalmology. He can be reached at 619-223-2233; e-mail: pintoinc@aol.com; Web site: www.pintoinc.com.