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Study: Low-price strategy in refractive surgery has no benefits, large profit losses
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WARSAW, Poland — A low-price strategy in refractive surgery leads to no benefits and large profit losses for health care providers, according to a study carried out at the Bellevue Eye Clinic in Kiel, Germany.
“We found that the level of price sensitivity is low amongst candidates for refractive surgery. About 12% of LASIK patients and 20% of refractive lens patients paid less than patient-related maximum willingness to pay,” Tim Herbst, project manager, said at the winter meeting of the European Society of Cataract and Refractive Surgeons.
Refractive surgery, both LASIK and refractive lens exchange (RLE), is a growing, highly competitive market in Germany. There are currently 300 LASIK centers and 290 RLE centers, where about 120,000 LASIK procedures and 10,000 RLE procedures are performed each year.
“Price differentiation is a major argument for demand stimulation, but the relevant decision factors are still largely unknown,” Herbst said.
Four hundred already operated and potential LASIK and RLE patients were included in the study. Paid price level vs. maximum willingness to pay were compared in the already operated patients.
“We found that 50% of the operated LASIK patients and 46% of the RLE patients would have paid more,” Herbst said.
The optimal price range for operated LASIK patients was between €1,000 and €1,900; for potential LASIK patients, between €900 and €1,500; for operated RLE patients, between €1,000 and €1,600; and for potential RLE patients, between €1,000 and €1,700.
Price sensitivity in both groups was low.
“A 1% decrease in price would increase the demand by only 0.33% for LASIK and 0.29% for RLE. The low-price strategy is clearly of very little benefit,” Herbst said.
Disclosure: Herbst has no relevant financial disclosures.