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Discount laser centers no match for today’s comanaging ODs
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DALLAS — When discount laser surgery centers first began opening for business, concern spread throughout the ophthalmic community over the potentially harmful effects the low-priced centers would have on optometrists’ practices. Despite the fears that these centers would decrease the quality of care and tarnish the procedure’s reputation among the public in the mad dash for market share through pricing below actual operating costs, their economic model does not appear to be sustainable.
In fact, an unexpected result of the discount centers’ cut rates has actually been increased business for some comanagement practices as optometrists rise to the challenge with more competitive rates without compromising the quality of their care or service.
“None of the discount providers who offered below-actual-operating-cost procedures and less service have proven to be sustainable,” said John Potter, OD, national director for clinical affairs for TLC Laser Eye Centers here. “I can’t point to a practice in North America that has been sustainable in that economic model.”
Savvy consumers
The reason, Dr. Potter believes, is that given the complicated nature of LASIK surgery, consumers are now more wary of discount providers. “Consumers and patients are smarter than we give them credit for,” Dr. Potter said. He explained that patients may not have known much about the procedure when they started exploring the possibility, but when they are through investigating LASIK, they will know what to expect.
“You cannot make a perceived compromise in the surgical experience,” he said. “By the time patients are done, they will know if they have had a good experience. No amount of marketing can make up for that.”
However, observed Jeffrey Augustine, OD, center director for Clear Choice Laser Centers in Brecksville, Ohio, discount providers are confusing the public on price. In his view, the discounters are actually offering a la carte refractive surgery by advertising lower prices for just the surgical procedure, then charging separately for additional services that are essential to the overall success of the entire procedure.
“Pre- and postoperative care is 80% of your success, while surgery accounts for 20% of your success,” Dr. Augustine said. He noted that discounters in Cleveland charge $399 for LASIK surgery on one eye, then refer the patient to optometrists at additional charges. His comanagement practice charges $1,000 for those services. “When you add it up, it’s about the same in price,” he said.
Dr. Augustine agreed with Dr. Potter that the discount centers’ economic model is not working because they are cutting corners. As a result of the competition from discounters, Dr. Augustine said he is spending more time in consultations with patients, and he also responded with a detailed Internet site. “Discounters haven’t harmed my practice,” he said. “I’ve increased my consultation time, and I’m running a better practice that is more efficient from a personnel and management standpoint. We’re seeing a happy ending as a result of our response to competition.”
Improved technology
Dr. Potter observed that dramatic improvements in the technology of the lasers do not translate into lower prices and higher quality care and service. If discounters were expecting that improved technology would make up for lower levels of care and service, they were wrong, he said.
“I can’t bring you a safer, better procedure at less expense,” Dr. Potter said. “Better technology is not going to lower the price in the short term — maybe in 5 to 10 years, but every new technology costs.” As for quality, “Better lasers are not necessarily improving the quality that is being delivered by the discounters,” he said.
Ronald K. Norlund, OD, medical director of Indiana LASIK Center in Ft. Wayne, said that prices for LASIK surgery at his center were decreased to $1,190 an eye from $2,300 an eye. “It was a strategic move to preemptively deal with the discounters,” he said. One result of the price cut was that the volume of LASIK patients increased dramatically, and so did revenues and profits.
However, Dr. Norlund said that the increased number of patients was also due to the increased acceptability by the public of LASIK surgery. “As more and more people have LASIK surgery, other people are not as afraid to have it done,” he said. Additionally, more people perceive that they can afford the procedure.
“I don’t think competition is a bad thing,” Dr. Norlund said. “There are certain things you can’t compromise on at all, such as the quality of the equipment, the quality of the care and the skill of the surgeon.” Dr. Norlund said his center upgraded the LASIK equipment, and the surgeons have become more experienced. As a result, his center is delivering better quality care and service at a better price. “We’ve risen to the challenge,” he said.
For Your Information:
- John Potter, OD, can be reached at TLC Laser Eye Centers, 18352 Dallas Pkwy., Suite 136, Dallas, TX 75287; (972) 818-1239; fax: (972) 818-1240; e-mail: john.potter@tlcvision.com.
- Jeffrey Augustine, OD, can be reached at Clear Choice Laser Centers, 6255 Old Royalton Rd., Brecksville, OH 44147; (440) 740-0400; fax: (440) 740-0660; e-mail: JMAORSS@aol.com.
- Ronald K. Norlund, OD, can be reached at Indiana LASIK Center, Dupont Medical Center, 2510 E. Dupont Rd., Suite 124, Wayne, IN 46825; (877) 664-2499; fax: (765) 664-5244; e-mail: rnorlund@netusa1.net.