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Up Front | Mar 2002

Refractive Surgeons to the Rescue

Save the Medicare system $2 billion annually.

The baby boomers are a hot topic in the medical field. Those born between 1946 and 1964, approximately 76 million people, represent the largest single sustained population growth in the history of the US. As depicted in Figure 1, beginning in the year 2010, the first of this generation will reach the age of 65 and enter the Medicare system, increasing the number of patients eligible for Medicare benefits from 33 million to 39 million. Table 1 shows projections of the Medicare age population. At first glance, these large increases in the Medicare population might seem to represent a windfall for ophthalmologists, as most would expect that an aging population would require more cataract surgery. However, we already know that ophthalmology will not benefit as expected from this boom. Drug companies have direct influence in setting the wholesale prices allowed by Medicare, but ophthalmologists do not. One example of this is the drug, Visudyne (Novartis Ophthalmics, Duluth, GA), used in photodynamic therapy. Just this year, the surgeon's fee for photodynamic therapy was reduced from $332 to $316; however, the cost of the drug did not lower, and Medicare still pays $1,458 for each vial. Consequently, the manufacturer is able to charge the previous year's price, and the surgeon receives lower fees. To add insult to injury, the surgeon acts as the distributor for the drug, while the manufacturer markets directly to the consumer to create demand. The amount of money Medicare pays for the drug is subtracted from the total amount that Medicare pays to all ophthalmologists. Something is really broken here, but perhaps I will cover that in another article.

To refresh our memories regarding how Medicare deals with paying for increasing cataract procedures, let's review Table 2, as seen in the February 2002 article in this section. The Center for Medicare and Medicaid Services (formerly known as Health Care Financing Administration) uses a simple formula to address the costs associated with treating the growing Medicare population. Essentially, Medicare pays the same total dollar amount for ophthalmology services each year, and if volume increases, Medicare simply pays less per procedure. In other words, the size of the pie stays the same, but the slices just get smaller. From 1993 to 2002, ophthalmologists' cataract surgery fee was cut a by a total of 42%, or approximately 5% each year. What do you think Medicare will do with the cataract fee beginning in 2010, when an additional 6 million eligible patients enter the system? If we assume that Medicare will project cataract surgery to be 72 per 1,000 on Medicare age population, using this formula, Table 3 indicates that Medicare will reduce cataract surgery reimbursement even further as the population ages.

In business, as in life, we need to make lemonade out of lemons. Ophthalmology has experienced great success with LASIK, and there are new technologies under development that will certainly continue this positive trend. Refractive surgeons have all but conquered myopia with LASIK, and LASIK is the gold standard that all other procedures will have to surpass to survive. The only accomplishment LASIK has not mastered in treating myopia is leaving the cornea prolate. New hyperopic treatments are also in development. Anamed, Inc. (Lake Forest, CA) is currently in FDA trials with its PermaVision intracorneal lens for the correction of hyperopia, a method by which the lens is implanted in a sutureless synthetic keratophakia procedure to correct hyperopic refractive errors. The Holy Grail of refractive surgery, of course, is a safe and effective means of treating presbyopia. Early attempts at treating presbyopia include monovision with LASIK, monovision with clear lens replacement, LTK, CK, radio waves, laser presbyopic reversal, custom excimer laser ablations to create a multifocal cornea, and of course, multifocal IOLs.

I believe that accommodating lens technology will show significant effectiveness in treating presbyopia. The accommodating IOL approach could achieve great near, intermediate, and distance vision. The most significant effect that the accommodating IOL could have on ophthalmology, however, may not be as a presbyopic treatment, but in its effect on Medicare. The average age of patients undergoing refractive surgery remains around 40 years, and most patients are undergoing LASIK with monovision targets to stall the effects of presbyopia. If these patients live long enough, 100% of them will need bifocals to ease their presbyopia, and 100% will eventually need cataract surgery, even with monovision ablations. However, once accommodating IOL technology is refined to the next generation, a major shift away from LASIK could occur. One advantage of implanting an accommodating IOL is that the patient's near, intermediate, and distance vision would be functional as they age into the normal presbyopic age category, not to mention that the cornea will still be prolate. The most important advantage to patients and the Medicare system would be that patients using this lens should not need cataract surgery, because the natural lens is removed. In addition, these patients will have already paid out of their own pocket for accommodating IOL refractive surgery prior to becoming eligible for Medicare, which could save the Medicare system at least $2 billion annually.

The year 2010 is not very far off. The bureaucrats could do society a big favor by supporting this technology. It is ironic that ophthalmologists, who have suffered the most under the Medicare payment system, will be the same group that actually helps reduce one of the largest expenditures (cataract surgery) in the Medicare system. Ophthalmologists are, in effect, opening a lemonade stand for Medicare.

Jim Denning is the CEO of Discover Vision Centers in Kansas City, Missouri. He may be reached at (816) 350-4529; jdenning@discovervision.com
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