Independent ophthalmology in Europe strives for survival, invests in a better future

Independent ophthalmology in Europe is facing an unprecedented decrease in demand for services during the current economic crisis.

Elective procedures, with refractive surgery at the forefront, have seen a steady drop over the past 2 years, with a decrease ranging between 15% and 60%. Cataract surgery in which premium IOLs are involved seems to be suffering less.

“Many people, particularly the middle class who used to be our main target, have fallen below the poverty line. There is widespread fear for the future, and also the majority of those who can still pay have become very thrifty, especially when it comes to elective procedures. They prefer to postpone them. As for cataract, working children are now paying for their parents,” Vikentia Katsanevaki, MD, PhD, an OSN Europe Edition Board Member, said.

Greece, where Katsanevaki runs a large private practice in Athens, was hit especially hard by the debt crisis. The economy has shrunk 20%, the unemployment rate is 25%, and the limited access to credit financing poses huge constraints to investment and growth. However, in countries with a strong economy, such as Germany, or in countries outside the eurozone, such as the United Kingdom, the crisis is also affecting people’s choices and forcing lifestyle changes.

Magda Rau, MD, an OSN Europe Edition Board Member who owns a private practice in Cham, a small town in southeastern Germany, said that her volume of laser refractive procedures has decreased by 15% because patients are less prepared to spend money on their quality of life and their looks.

“Cataract operations with implantation of premium IOLs have not decreased because cataract is a necessary surgery and people are willing to pay the extra money for a premium procedure for better quality. In addition, my practice is quite well-known for refractive cataract, and people come specially to have it done here,” she said. “In addition, recent new regulations in Bavaria have greatly helped to maintain the demand for premium IOLs. The rule requires insurance companies to pay for cataract surgeries with monofocal IOLs. Patients who prefer premium lenses must only pay the difference in cost between normal and premium IOLs.”

In the United Kingdom, the demand for private procedures has fallen. This is partly because the demand for elective refractive procedures has shrunk but also because the pool of people with private medical insurance has been reduced by about 6%.

“A lot of people have lost out from their private insurance because they have been made redundant, but also because a number of firms have limited their scheme. And there are private individuals who don’t renew their insurance policy because they find it has become too expensive,” Richard B. Packard, MD, FRCS, an OSN Europe Edition Board Member who practices in both the public and private sector, said.

Eduardo Baviera, managing director of the Baviera Group, a network of approximately 80 clinics in Spain, Italy, Germany and the Netherlands, confirmed that the laser refractive surgery market has suffered the most since the economic crisis started.

“The overall decrease across our clinics in Europe has been 40%, while in lens surgery, numbers have even grown from 10% to 30%. There is a huge trend toward refractive cataract surgery, which, in combination with the demographic trend, counterbalances the negative effects of the economic downturn. In addition, since in most countries the public sector is making restrictions on cataract, people are moving to the private market,” he said.

The overall demand for refractive procedures has remained higher in the south of Europe than in northern countries.

“Spain has half the population of Germany, but the number of treatments is similar. The penetration rate here is much higher. Also, for multifocal lenses, the Spanish market is more mature,” Baviera said.

Comparing small-town and city practices

Large cities offer a better market for private medicine, while practices located in small towns are suffering and reaching the point of having to close.

“People from both the mainland and the islands choose Athens to have surgery done, particularly for refractive and cataract. Small practices outside the capital have huge problems. Many are now unable to pay for excimer lasers and other technology they have [purchased] because patient flow has decreased dramatically,” Katsanevaki said.

In her second private practice in Prague, Rau said the number of refractive procedures has remained stable, and even experienced some growth, despite the weaker economy and lower salaries as compared with Germany.

“One reason is that we can keep our fees lower than in Germany because all the expenses of running a practice, including the salary of doctors and nurses, are lower. Also income tax is considerably lower in the Czech Republic. We pay only 18% compared to the 50% to 60% we pay in Germany,” she explained.

Another reason why the procedures have remained popular is that Prague is a big, lively capital city where being spectacle-free and looking young and dynamic are priorities, she said.

Similarly, in the United Kingdom, outside London, there has been “a considerable decimation of private practices. Quite a few doctors are abandoning the private sector and are doing extra NHS work in accredited private clinics instead,” Packard said.

Dealing with private insurance

As deputy chairman of the Federation of Independent Practitioner Organisations, Packard is personally involved in policy discussions involving private health care.

“The main issue we have at the moment is with insurers, who have put us under considerable pressure,” he said.

Since July 2012, the largest U.K. insurance company, BUPA, with 40% of the market, has cut reimbursement for its subscribers by more than 60% for cataracts, with other cuts for various procedures. Packard said there has been great pressure put on consultants to accept lowering their fees; many consultants have refused to do this, so private insurance companies have turned to newly appointed consultants whom they had, in 2010, tied into contracts that impose limitations on the fees that they can charge at a low level.

“BUPA is now often redirecting patients to these junior and less experienced consultants who are on fixed fees, so that their subscribers don’t have to have any sort of shortfall. They are thus denying choice to people who thought they had bought choice through private insurance. In essence, patients insured with BUPA have to go to the consultants that the insurance company has chosen for them, not the one they and their family doctor want, as was the case before,” Packard said.

In Greece, only a minority of the population has private medical insurance. Most subscribers are in the baby boomer generation, which is too old to have laser refractive surgery and too young to have cataract surgery, Katsanevaki said.

“However, the percentage of patients who pay out of pocket is now lower compared to those who still come to us because they will be reimbursed by insurance. Until a year ago, my percentage of private vs. insured patients was 60% to 40%, and now it has reversed,” she said.

A similar trend is reported in Italy. Francesco Carones, MD, an OSN Europe Edition Board Member who owns a private practice in Milan, said that the decrease in demand has been about 20% for cataract surgery and 15% for refractive surgery.

“This might be just a temporary fluctuation, but what has definitely changed is the type of patients. The majority now don’t pay out of pocket but have the support of private insurance. Also, there are more patients who undergo refractive surgery at a relatively older age because they have more financial stability,” he said.

Struggling with reimbursement and pricing

All over Europe, a shift toward National Health Service-assisted procedures has been reported. Patients are prepared to accept the compromise of long waiting lists and lower quality of services to have cataract surgery done at a lower cost.

“This is of course increasing pressure on our already overloaded and underfunded public sector,” Carones said.

In many European countries, the austerity measures implemented to combat the financial crisis are having a dramatic effect on health budgets.

In Greece, the reimbursement for cataract surgery has been cut to €350 per eye, which is no more than the cost of the custom pack and the lens. This is giving way to unregulated forms of co-payment in public hospitals, Katsanevaki said.

“It’s a very sad phenomenon of black [market] surgery within the public system. People pay some extra money to doctors, something like €200, and have surgery done,” she explained.

Private practices try to survive by lowering prices, in some cases beyond reasonable limits.

“We’ve cut down the price of bilateral LASIK from €3,200 to €2,200, and we are still expensive. Some colleagues now do bilateral LASIK for €1,000. Such ridiculous prices drag the market down. This started a couple of years ago, and I think we are now hitting the peak,” Katsanevaki said.

To make cataract surgery available at competitive prices, some practices are using cheaper IOLs from India and China instead of brand-name products. Premium lenses are seldom used because they are too expensive, she explained.

Packard said that many U.K. patients are pulled in by chains such as Optical Express and Optimax.

“Refractive procedures are offered at £350, but all you can get for that price is 2 D of spherical myopia. Even a small degree of astigmatism or hyperopia makes the price escalate, but people are pulled in. In addition, most surgeons there are not U.K.-trained and are not consultants,” he said.

Rather than leading to defeat, the crisis might offer the opportunity for unexpected positive changes.

“We have already been forced to change in our profession in order to be more competitive and attractive to our customers. We’ve adopted new marketing strategies and are offering new services. The crisis has inspired a series of paradigm shifts that will provide the basis for a whole new scenario,” Carones said.

Carones reacted to the crisis by restyling his practice. He renovated the interior of the clinic, set audio-visual systems into the waiting rooms to inform and entertain patients, and opened a corner bar with coffee, beverages and snacks for his patients.

“We’ve also completely renewed our website, adding social networking features, and have signed agreements directly with insurance companies. We have upgraded our technology and purchased new devices to offer new diagnostic and surgical procedures. Over the last year, we have made considerable investments that allow us to contain the negative wave of the current crisis and to prepare for a better future,” he said.

Offering quality to patients and keeping them happy are key issues in good and bad times, according to 
Katsanevaki.

“I always tell people who work with me that I don’t care how many surgeries I do, but that everyone I operate is happy. This is my motto,” she said. “Quality of services can make a real difference.”

Word of mouth and referrals from family doctors remain the most powerful channels for keeping a good patient inflow in mature practices, Packard said. However, keeping potential patients informed on what your practice can offer is also crucial.

“The online approach is very cost-effective,” Baviera said. “Through our website, we propose best quality and price for spectacle freedom at all ages. We try to emphasize that the new reality is there, is offered to you, and we are the highest-volume clinic and our quality standards are very high.”

Rau uses newspaper advertising and organizes public information meetings for potential patients once a month.

Investing in new technology

All surgeons interviewed for this article agreed that investing in new technology is important despite the difficult economy.

“Keeping your technology updated is always important, no matter how good or bad the situation is. It is something you owe to your patients and to yourself as a professional. There is constant innovation in ophthalmology, and if you don’t keep up with it, you lose ground quickly,” Rau said.

“Once the crisis is over, we’ll be ready to fully exploit the beneficial effects of previous investments. The situation is very similar to that of the stock market: Buy when it’s low and move with the wave to ride high when better times come,” Carones said.

“I am both a medical doctor and a shareholder in my practice. From the point of view of the investor, I should say we’d better keep a low profile for the time; as a doctor, I say we should invest,” Katsanevaki said.

Baviera recommended investing in what is clearly a good value for the patient.

“We don’t introduce new technology because it’s new, but because it’s better. Some of the new technology only makes a small difference in terms of the results compared with what we already have. Patients are willing to pay more if outcomes make a difference,” he said.

Investing in femtosecond laser technology for cataract surgery may not yet be advantageous, according to some of the surgeons.

“It is too early to buy it to just do sometimes not even perfect capsulorrhexis. The technique has to develop. The fragmentation is often not complete. The technique is not suited for dense cataracts. I don’t want to buy a femtosecond laser just to advertise for the clinic. It might be financially advantageous, but it is quite unnecessary at the moment,” Rau said.

According to Packard, there has been a lot of market hype regarding femtosecond laser-assisted cataract surgery. All the surgeons who are currently performing it are very good surgeons, and their results are not significantly better than the results they have with standard phaco, he said.

“There is marginal improvement, but so marginal that the patient wouldn’t even notice it. In the future we might find it useful, but it is too expensive now for the majority of patients,” he said.

“If I were convinced that with femtolaser I could offer truly better quality, I would not think about saving the money, but I don’t want to buy it because it’s fashionable,” Katsanevaki said.

Returning to growth

As an economist, Baviera foresees a progressive recovery from the crisis, which will open the door to new opportunities for ophthalmology.

“Europe is facing a crisis that is perhaps the worst in history, but my feeling is that it is part of a cycle. In some years we expect to recover, though the process will be slow,” he said.

In ophthalmology, he said, there are reasons to be optimistic because the demographics and current trends play in favor of a growing demand for laser and lens surgery.

“The current decrease in demand is driven by a combination of quantitative and qualitative problems, of real crisis and emotional crisis. Psychology definitely plays a role because the insistence and apocalyptic tone of the media have a great influence on public perception,” Baviera said.

“Doubt is the worst enemy,” Katsanevaki said. “If you can see clearly into the future, you can plan, but instability, the feeling of not being safe and not knowing what comes next, has harmful psychological effects on people

At the moment, Greek banks have cut off loans and leasing programs, which are vital for running businesses, including private medical practices.

“It is like a machine working without oil,” Katsanevaki said.

“Hopefully, the eurozone ministers, the International Monetary Fund and the European Central Bank will eventually agree to reduce our debt level. Only then we’ll be able to get back on a path of growth,” she said. – by Michela Cimberle

• Eduardo Baviera can be reached at Clinica Baviera, S.A., Serrano, 43-45, Planta 6, 28001 Madrid, Spain; +34-917819886; fax: +34-917819883; email: ebaviera@clinicabaviera.com.
• Francesco Carones, MD, can be reached at Centro Oftalmo Chirurgico Carones, Via Pietro Mascagni 20, 20122 Milano, Italy; +39-02-76318174; fax: +39-02-76318506; email: fcarones@carones.com.
• Vikentia Katsanevaki, MD, PhD, can be reached at Orasis Eye Center, 7 Ymittou St., 17564 Paleo Faliro, Athens, Greece; +30-1-940-8100; fax: +30-1-940-7785; email: vikentia_katsanevaki@yahoo.gr.
• Richard B. Packard, MD, FRCS, can be reached at Princess Christians Hospital, 12 Clarence Road, Windsor SL4 5AG, United Kingdom; +44-1753-829204; fax: +44-1753-831185; email: eyequack@vossnet.co.uk.
• Magda Rau, MD, can be reached at Augenklinik Cham, Cham, Bavaria, Germany, 93413; +49-99-7186-1078; email: info@augenklinik-cham.de.
• Disclosures: Baviera, Katsanevaki, Packard and Rau have no relevant financial disclosures. Carones is a consultant for Alcon Laboratories.

Is lowering the price of procedures an acceptable strategy in response to the economic downturn and reduced patient volume?

Lowering prices may help patients, increase volume

The strategy of lowering prices to face the economic downturn has been adopted by almost all ophthalmologists in Greece. There are two main reasons: hard competition and patients’ financial inability.

In Greece, for many years we have had more doctors than we really need; 70,000 doctors are too many for a country with 10.5 million people. The lowering of doctors’ fees started 5 or 6 years ago, especially by the new doctors who tried desperately to attract patients in a very difficult market. Additionally, more than 1.5 million people in the private sector are unemployed due to the financial crisis. Most of them cannot afford to pay high fees to a private doctor. Social security services are insufficient and underpaid. For example, an ophthalmologist gets €10 as a fee when he examines patients covered by social security. Worst of all, the doctor may receive this money after a delay that can go up to 2 or 3 years. Currently, the state owes more than €6 billion for medical services to doctors, hospitals, pharmacists, etc. As a result, patients must cover most medical expenses for private health care from their pocket. Unfortunately, their financial ability deteriorates daily. The recent decision by the Eurogroup for additional support of Greece opens new horizons for optimistic thoughts, especially in the private sector.

We agree that the current economic crisis is an extraordinary situation, not comparable to anything similar we experienced in the last 30 to 40 years in Europe. By lowering prices, we offer the ability for more patients with low budgets to visit us, in hopes of increasing our volume of patients and, of course, our income until this crisis is over.

Pandelis A. Papadopoulos, MD, PhD, FEBO, is the director at the Ophthalmology Clinic, Athens Metropolitan Hospital, Greece, and visiting professor of ophthalmology at Slovak Medical University. Disclosure: Papadopoulos has no relevant financial disclosures.

Offering choices will not diminish value

Although France has not been affected by the crisis as deeply as other countries, fear for the future is making people more cautious with their spending. A 20% decrease in the revenue of private medical practices and all liberal professions was reported for 2012. My practice definitely lost patients over the summer, although numbers started to grow again around October.

Difficult times impose changes, but I do not think we should diminish the value of what we do by lowering our fees. There are other strategies that we can use to maintain a good volume of patients. What I do, not just now but routinely in my practice, is offer different levels of service and technology, with adequate prices, for the same procedure. LASIK, for instance, can be performed with a microkeratome or with a femtosecond laser. IOLs can be monofocal or multifocal. Prices will vary accordingly, allowing patients with different incomes to afford procedures. The type and quantity of diagnostic and follow-up examinations can also be adapted to what individual patients can afford. A retina patient can have OCT at every visit or every other visit.

Here in Cannes, our clients range from low income to the wealthiest on Earth, and we want to be able to respond to both. I charge double the average price to the rich Saudi who wants the most updated premium procedure and the clinic all to himself for half a day. To the average patient, I explain that there are different techniques, of which some of them, such as PRK or microkeratome LASIK, are cheaper but equally safe and effective. I show the whole range of what we can offer at different prices, explain the advantages and disadvantages, and leave the choice to the patient. What he or she must be assured of is that the result will be equally good.

Alain Telandro, MD, is an OSN Europe Edition Editorial Board Member. Disclosure: Telandro has no relevant financial disclosures.