U.S. patients heading to Canada for low-cost LASIK

U.S. surgeons are losing laser refractive surgery patients to Canada again, but this time the issue is price, not availability.

Issue: November 15, 1999

ByRochelle Nataloni

USA Today, Airline magazine and The Maine Sunday Telegram are among the publications that recently ran advertisements offering “LASIK: two eyes for $999.” The company advertising the cut-rate laser in situ keratomileusis (LASIK) is Lasik Vision Canada, a group of 11 Canadian clinics spread coast to coast from the Pacific Northwest to Toronto, with plans for expansion into the United States.

In fine print below the bold sale price in the ads are clarifications indicating that only the first 1,000 patients are eligible for the discount. Preop and postop care is included in the price; however, patients who travel a long distance usually do not take advantage of the postop care beyond a 24-hour checkup, according to the company’s director of marketing, James Watson. They opt, instead, to make their own arrangements with optometrists and ophthalmologists close to home for follow-up care. The Canadian company does not make arrangements for follow-up care for patients who do not avail themselves of that provided by Lasik Vision Canada.

The ads were specific to Lasik Vision Canada’s newest Canadian clinic, which opened in early fall in Toronto. Appointments have been made for all 1,000 of the promotionally priced procedures, but all the procedures had not been performed at press time, according to Mr. Watson.

What does this mean for U.S. patients who travel to Canada to take advantage of the savings? Even with travel costs and separate preop and postop fees, obviously, Lasik Vision Canada’s promotional offer can represent significant savings in comparison with the $2,100 to $2,500 per eye that most U.S. surgeons charge for LASIK.

Among the questions raised: Do patients fully appreciate the concept of paying for ancillary care separately? Do they appreciate the concept of finding an ophthalmologist or optometrist to pro vide postop care to a patient when no prior comanagement agreement was arranged with the operating surgeon? Do they appreciate the potential — albeit unlikely — for sight-threatening complications?

What does this mean for U.S. surgeons, especially those in states neighboring Canada? Will they lower their prices to remain competitive, or should they hold tough on price and emphasize the benefits of going to an experienced surgeon who is accessible geographically in the event of complications?

And finally, what does it mean for LASIK? Is this the beginning of price wars, where surgeons in neighboring communities use price to compete? Or could it be the start of quality wars, where patients are taught to appreciate that LASIK is not a commodity. As one refractive surgeon put it, “LASIK isn’t a can of Del Monte peaches. If it was, then it would make sense for patients to shop for the cheapest.”

Surgeon response

Refractive surgeons are responding in a variety of ways. William Holt, MD, a Portland ophthalmologist with the Eye Care and Surgery Center of Maine, told Ocular Surgery News that he and his partners were “astonished” when the ads started appearing in their local papers, “particularly,” he said, “since Maine borders Canada.” Dr. Holt said competing with Canadian refractive surgeons has been challenging all along because Canadians do not have to factor in per-procedure user fees and also because the exchange rate is extremely favorable to Canada. The $999 marketing strategy, however, has added considerably to that challenge. “This is just astonishing, and we are seeing some Maine folks go up there for surgery.”

Dr. Holt thinks traveling to a foreign country for care that is available closer to home can compromise patient follow-up. “The first thing these patients do upon returning home is to try desperately to find someone who will follow up,” Dr. Holt said. “Even in a patient where there are no complications at all, most of us will check them at 1 day, 1 week and maybe 1 month, and gradually taper down, but there are always questions about healing. In the early days, there were questions about the flap, and then there’s the longer-term question about whether we were right on our prescription or will this person be one of the 10% or 12% who needs an enhancement.”

Back in the day

In the days when patients from the United States traveled to Canada for photorefractive keratectomy because it was not yet available here, Dr. Holt said postop care was not compromised because Canadian surgeons truly partnered with U.S. ophthalmologists or optometrists. “We partnered with surgeons in Montreal who were wonderful; we worked with them and were cooperative. It was a real partnership. Patients would go back and forth as need be. That’s missing in this current situation,” he said.

Ocular Surgery News Chief Medical Editor Richard Lindstrom, MD, of Minnesota Eye Associates, said Minnesota ophthalmologists are not happy about the situation. “They are not happy that these patients basically are being dumped back here and told that their local eye doctor will have to see them,” Dr. Lindstrom said. “There is a longstanding ethical tradition in surgery that if a surgeon from a distance away is going to do surgery and then send the patient back, they arrange for postop care beforehand. There are some doctors in Minnesota who have refused to do the postop care because they don’t like the idea of the patient running off to Canada for surgery, and because they are concerned about medicolegal issues, such as if there’s a problem and the patient can’t sue the Canadian doctor, they’ll sue the U.S. doctor.”

Mr. Watson said avoiding comanagement fee sharing is one way his company passes savings along to the patient. “We don’t cut any corners on the medical side of things,” Mr. Watson said, “but because we’re a very large organization and we do a significant volume of procedures, there are some significant economies of scale that we can pass on to our patients.”

Stress quality, not price

Refractive surgeon Daniel S. Durrie, MD, said the crux of the matter is this: “If you’re in the market and you’re worried about price erosion, and you think you are providing a better service than the [physicians] who are coming in at a lower price, then you’d better tell the patient why you’re better. So far, ophthalmologists have not done a good job of differentiating themselves when they have a different product, whether that be cataract surgery or LASIK.”

Dr. Holt is concerned about price erosion, having seen some of his potential patients make the trip to Canada for a cheaper price. But rather than hang tough, Dr. Holt says Lasik Vision’s promotional effort has made him and his partners look more closely at their pricing strategy.

“What we found is that if we really work at it, we could probably drop our facility fee, because our laser is largely paid for,” Dr. Holt said, “and we’ve asked our comanaging optometrists to take a cut as well.” Dr. Holt said these adjustments might allow him to drop his LASIK price from $2,200 per eye to $1,700 per eye. He says it is not so much an effort to compete head-on with a company that can offer LASIK as inexpensively as Lasik Vision Canada, but rather a “good faith, modest de crease consistent with good practice.”

Dr. Lindstrom, too, said the possibility of lowering LASIK prices at his clinic is not out of the realm of possibility. “We always suspected some company would come along and introduce the discount concept to LASIK. It is universal. There will always be patients who value a relationship with a surgeon and those who jump at a bargain, just as there will always be people who shop at Nordstrom’s and people who shop at Wal-Mart.”

Mr. Watson said, “We recognize that there will always be patients who will want to pay more because they believe that they will get better care by doing so.”

LASIK Institute board member Brian Boxer Wachler, MD, of the Jules Stein Eye Institute in Los Angeles, is taking another route. “We’re considering raising our price,” he told Ocular Surgery News. “Our current fee is $2,500 per eye. We’re always incorporating new equipment, and there’s a cost for using the latest technology. We are committed to providing the highest quality care,” he said. “Patients are becoming more savvy; they are starting to ask questions about how LASIK can be offered so inexpensively. They’re asking what part of their care is that group giving up to make it so inexpensive, and I say, ‘I don’t know, but that’s a good question.’”

A Canadian refractive surgeon in private practice, who asked not to be named, said he has lost patients to discount laser centers. Patients have been canceling on the day of surgery, and surgery candidates have been canceling consultations. “Several years ago in England there were more than 50 laser centers until one discount center opened. Then people started lowering their price, and then there wasn’t enough volume to go around and it put most of them out of business. So we’re holding strong [on our prices] right now, but we’ll see. We’re seeing more and more people who cancel on the day of surgery, people cancel their consultation — they shop around,” he said. “Of course there’s a big difference regarding lasers and microkeratomes and experience, but the public doesn’t appreciate that. People think that getting LASIK is like buying a stereo, and they look for the best deal.”

Back in the United States

Lasik Vision Canada has completed its expansion in Canada, and is now establishing a presence here in the United States. The company opened its first North American clinic in October in Seattle. At press time, only preop and postop care was available there, however, because a laser purchase had not been finalized, according to Mr. Watson. The company also has plans to open three clinics in California, in San Francisco, Beverly Hills and Newport Beach. The price for LASIK for two eyes at these U.S. facilities will be considerably higher than at the company’s Canadian sites, but still significantly less than most U.S. laser vision clinics: “slightly more than $2,000 for both eyes,” according to Mr. Watson.

Another Canadian discount LASIK clinic, Lexington Laser Vision, is making its mark in the United States, as well. The company provides laser vision correction only at its headquarters in Vancouver, but provides preop and postop care at several facilities in metropolitan areas throughout the United States. At press time, the company was running a LASIK promotion: two eyes for $1,075, or come in with a friend and each person gets bilateral LASIK for $975.

David Harmon, president and senior editor of Market Scope, a newsletter for laser industry insiders, told Ocular Surgery News, “In the short term, I think these developments will have little impact on the corporate centers because they’ll hold prices firm and the large surgeons will hold prices firm, as well. Some of the smaller surgeons, however, will reduce their price, trying to get closer to the [discounted] prices.”

He said that these developments will definitely lead to segmentation of the market based on price. “I think you’ll have high-priced places to go and low-priced places to go and that the high-priced places will concentrate on creating an experience for the patient so that the patient feels they are getting better service — something for their money — and the low-priced places will focus more on volume.”

For Your Information:

Brian Boxer Wachler, MD, can be reached at 100 Stein Plaza, UCLA, Los Angeles, CA 90095; (310) 794-7216; fax: (310) 794-7906.Dr. Boxer-Wachler has no direct financial interest in any of the products mentioned in this article, nor is he a paid consultant for any companies mentioned.

Daniel S. Durrie, MD, can be reached at the Hunkler Eye Centers, 5520 College Blvd., Overland Park, KS 66211; (913) 491-3737; fax: (913) 491-9650. Dr. Durrie has no direct financial interest in any of the products mentioned in this article, nor is he a paid consultant for any companies mentioned.

William Holt, MD, can be reached at the Eye Care and Surgery Center of Maine, 53 Sewall St., Portland, ME; (207) 773-0432; fax: (207) 773-7034. Dr. Holt has no direct financial interest in any of the products mentioned in this article, nor is he a paid consultant for any companies mentioned.

David Harmon can be reached at 1349 Gatewood Drive, Keller, TX 76248; (817) 514-0702; fax: (817) 514-1867; e-mail: daveharmon@mktsc.com. Mr. Harmon did not participate in the preparation of this article.

Richard Lindstrom, MD, can be reached at Minnesota Eye Associates, 710 E. 24th St., Ste. 106, Minneapolis, MN 55404; (612) 813-3600; fax: (612) 813-3660. Dr. Lindstrom did not participate in the preparation of this article.

James Watson, director of marketing at Lasik Vision Canada, can be reached at (604) 647-3729; fax: (604) 801-6465. Mr. Watson did not participate in the preparation of this article.