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Observations on present and future cataract surgery trends
As the U.S. population ages, focusing on geriatric eye care and increasing surgical efficiency will help surgeons expand the scale of their practices.
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As is now widely recognized by surgeons, their patients and third-party payers, cataract surgery is the most common procedure in America and a highly likely rite of passage for those of us fortunate enough to reach our sixth decade of life and beyond.
It has been a number of years — back when capitated programs for seniors were rapidly gaining market share — since I’ve examined cataract surgery rates and tried to relate them to economic trends and opportunities for the private surgeon. This was an interesting exercise a decade ago, inasmuch as the cataract surgery incidence in the mid-1990s among fee-for-service populations was about 50 cases per 1,000 seniors (65 and older), and closer to just 25 cases per 1,000 seniors in prepaid HMO plans where utilization was constrained.
We all looked at those figures and braced for an across-the-board drop in the incidence of cataract surgery. What we got instead of rationing, of course, was a precipitous drop in allowable fees for surgery. This has led in turn to the expected outcome we see today. Surgeons seem to be splitting into two groups. One group increased their caseloads to cost-effectively provide surgery and, at least in terms of volume, remain surgical specialists. The second group has cataract volumes that are much lower because for them it has become as profitable to provide medical eye care and dispense glasses as to operate inefficiently on a handful of cases each month.
Useful population trend resources
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Few high-output surgeons
Abstracting from various industry and institutional reports, the nation’s eye surgeons are now performing perhaps 2.4 million cataract surgery cases per year. That’s only a little more than 150 cases per active surgeon per year, but of course, Pareto’s 80-20 rule applies, and an increasing percentage of cases are performed by a decreasing percentage of surgeons. Most large urban centers now have a bimodal distribution curve of cataract surgeons, with a few 50+ case-per-month providers and a much larger number of surgeons performing 15 or fewer cases per month.
The high-output surgeons achieve their volumes in a variety of ways, including tenure in their respective markets, providing a superior experience for patients, developing regional referral networks and paying for direct-to-consumer advertising. Few of these surgeons reach these higher volumes overnight. One common thread among them is a competitive drive to invest many years and much capital to achieve leading status in their markets. Most importantly, though, given the current low rates of professional fee reimbursement for surgery, higher-volume surgeons are driven by a desire to reach those case volumes needed to support a private surgery center (in the range of 50 to 70 cases per month). An inefficient, low-volume cataract surgeon can only generate about $800 of revenue per hour and perhaps $300 of profit per hour in the OR, which is not much more than can be generated in an office practice. In contrast, an efficient and especially gifted cataract surgeon can generate $7,000 or more in hourly revenue and bring nearly $3,000 to the bottom line.
Rising senior population
Compared to a decade ago, the incidence of cataract surgery appears to be up. As the accompanying table shows, we now perform about 60 surgical cases per 1,000 seniors per year, so the rate of cataract surgery seems to be up about 20% in the past 10 years. I would venture that at least a part of this elevation is due to improving outcomes and the growing realization among both patients and providers than the cost-benefit and risk-benefit ratios are very favorable. With new technologies now coming on line, one can only expect more of the same, unless, of course, there are successful efforts in the years ahead to ration care.
The expected future case volumes outlined in the table may be leveraged upward by the increasingly poor health and dietary habits of Americans and the observation that obesity may significantly increase cataract risk, even among individuals who are not diabetic.
How should all of this impact your business and career decision making today? Unless today’s baby-boom-aged surgeons delay their own retirement or greater efforts are made to import surgeons from overseas, the number of cataract surgeries per year per average surgeon seems destined to climb steeply. For surgeons who will be active in their careers over the next 20 years, this may present a remarkable opportunity and incentive to focus on geriatric eye care, to become an efficient surgeon capable of performing three or more cases per hour and to plan for the scale of your cataract practice to grow to levels that can support an ambulatory surgery center.
Basically half of us, more or less, will become cataract patients in our lifetimes. Only a small fraction of those U.S. citizens who develop blinding cataracts miss out on the benefits of surgery. Compare that to the 20 million people in the rest of the world today who are blind with operable cataracts. In America we have roughly 7% of the world’s seniors, yet we perform a little over 20% of the world’s cataract surgeries. It should be the life’s work of every surgeon and every manager and every health policy expert to keep this favorable statistic intact, while doing our part through research, philanthropy and even personal mission trips to developing nations to help them catch up.
For Your 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 and the new book The Efficient Ophthalmologist: How to See More Patients, Provide Better Care and Prosper in an Era of Falling Fees. He can be reached at 619-223-2233; e-mail: pintoinc@aol.com; Web site: www.pintoinc.com.