Lasik Vision surgeons walk out; Icon in negotiations

Lasik Vision surgeons at several Canadian Lasik Vision Centers walked out after not receiving payment. Lasik Vision has also shut down nine centers.

Issue: April 15, 2001

TORONTO — When the Icon takeover of Lasik Vision was announced in February it was touted as the coming together of two laser vision entities to become a super power in the value-priced LASIK wars.

However, past mismanagement on the part of Lasik Vision has taken the shine off the 70-center combined corporation. Icon purchased Lasik Vision with the intention of it becoming a wholly owned subsidiary of Icon.

In early March, Lasik Vision surgeons at several Canadian centers walked out after not being paid for several weeks for surgery performed.

Icon responds to walkout

Icon quickly sent out a press release stating that Lasik Vision has established a full-time patient response team to inform and accommodate patients affected by the takeover of Lasik Vision by Icon.

Icon chief operating officer Ghassan Barazi said that Icon and Lasik Vision apologized for any current scheduling inconveniences and assured all patients that both companies were dedicated to patient satisfaction and laser eye treatment at an affordable price.

He also stated that Lasik Vision is in the process of developing and implementing a comprehensive business plan aimed at the future business of Lasik and the possible integration of certain Icon and Lasik Vision operations. Lasik acknowledged that some patients scheduled into Lasik Vision centers were experiencing scheduling inconveniences as a result of corporate changes and the walkout by Lasik Vision doctors.

Mr. Barazi noted that the walkout by a majority of Lasik Vision doctors was initiated on March 2, 2001, and has temporarily interrupted patient services in Lasik Vision centers. He said the labor dispute is in relation to back-compensation for services performed prior to Icon’s takeover of Lasik Vision.

Since March 5, some Lasik Vision doctors returned to work and Lasik Vision has been making arrangements to reschedule affected patients. Mr. Barazi said Lasik Vision made an initial offer to all Lasik Vision doctors and is working to come to a fair and equitable agreement with them.

Icon cleans Lasik Vision’s mess

In an interview with Ocular Surgery News, Mr. Barazi said that while the doctor walkout has been an interruption in Icon’s plans for Lasik Vision, otherwise things are going smoothly.

However, he said he recognized the difficulty the merger was creating for both patients and surgeons.

When asked why Lasik Vision was not able to pay their doctors, he said it was simply a matter of lack of funds. He also quickly acknowledged that Icon has never defaulted on payment to a surgeon. He admitted the walkout was in response to surgeons being “fed up” with Lasik Vision.

Mr. Barazi said that Icon is speaking with Lasik Vision center’s creditors now about restructuring their debts. “And, we’re in negotiations with the surgeons to come back.”

However, the centers never closed, they were still being operated for pre- and post-op consultations, and some were staffed by Icon surgeons.

A published report in the Toronto Globe and Mail quoted an anonymous Lasik Vision surgeon who said that Icon/Lasik Vision was negotiating to pay the surgeons $75 an eye for LASIK, where as Lasik Vision, when they paid their surgeons, paid $150 an eye.

In response Mr. Barazi said that most Icon surgeons are paid per diem and not per eye. Their per diem rate is figured by experience, history and contract negotiation. But he did note that Icon must pay their surgeons what is feasible, although he would not elaborate.

When asked if he was worried whether or not the news of doctor walkouts and poor pay would give the newly reformed companies a black eye and make it difficult to recruit surgeons, Mr. Barazi said, “I think we have a very good environment to work in, with excellent centers. We have 79 surgeons working for Icon and as far as I know no surgeon has said they have a problem here.” He added that the company has a very low turnover rate among surgeons.

Conference call snafu

As far as the lack of payment on the part of Lasik Vision to their surgeons, Mr. Barazi said Icon was not aware of the situation until the two parties hosted a conference call for reporters. At that time several surgeons called in during the call to ask when they would be paid.

Lasik Vision President Neville Fridge refused to comment on the situation to reporters, citing it was an internal matter and not a matter for an investor call. He only said that the $7 million cash up front payment that Icon had made to Lasik Vision would pay off the surgeon’s back pay.

“Since we took over control we’ve been in friendly negotiations with the surgeons, coming in as new management,” said Mr. Barazi.

There have also been reports that Lasik Vision patients who asked for refunds were not receiving them; however, Mr. Barazi said that the Lasik Vision banks were being told to reopen funds to pay the credit card companies of the people who had asked for refunds.

Restrucuturing and center closings

“We’re undergoing a lot of restructuring as any company would that takes over a second,” said Mr. Barazi, citing problems ranging from reformatting call centers to moving around management. “However, we’re comfortable that everything will go smoothly.”

Icon has also closed several Lasik centers that were in overlapping areas, including the Lasik Vision centers in Toronto; London, Ont.; Burnaby; San Diego; and Honolulu. Icon has closed centers in Windsor and Vancouver. Lasik Vision continued with the closing of two centers in Santa Monica and Long Beach, Calif. that had already been slated to close prior to the takeover.

Patients in these cities have been informed of the change and have been rescheduled wherever possible into geographically convenient Lasik Vision centers. Where this has not been possible, Icon has agreed to ensure that those patients are scheduled in a geographical convenient Icon center.

Collateral damage

Another laser vision correction center has felt the sting of Icon/Lasik Vision’s problems. On March 7, a Cincinnati television station filmed LCA-Vision corporate headquarters in Cincinnati when reporting upon the problems occurring at a Lasik Vision.

Later that day, LCA-Vision issued a press release that it had extended office hours at its LasikPlus centers and expanded coverage of the company’s national call center to ensure that patients impacted by a competitor shutdown could still receive surgery.

LCA-Vision CEO Tom Wilson made it clear in his press release that LCA-Vision’s LasikPlus and Lasik Vision of Canada are two distinct brands operated by two separate companies. “Over the last few days, we have learned of some confusion in the marketplace between our LasikPlus brand and another laser vision correction provider that has a name similar to ours. It has been reported that a number of Lasik Vision centers have been closed and that Lasik Vision’s surgeons have refused to work due to a dispute over back pay. LCA-Vision has not closed any of the company’s 33 U.S. LasikPlus centers and currently has no intention of closing any.”

LCA-Vision owns and operates 33 LasikPlus value-priced laser vision correction facilities in the Unites States, as well as one center in Canada and one in Europe.

For Your Information:

Ghassan Barazi can be reached at Icon Laser Eye Centers, 1 Yonge Street, Suite 1014, Toronto, Ontario M5E 1E5 Canada; (519) 254-5889; fax: (519) 254-0547; e-mail: gbarazi@iconlasik.com; Web site: www.iconlasik.com.