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Cover Stories | Sep 2005

Laser Vision Correction’s Impact

A hurricane of changes during the last 10 years left a path of destruction and opportunities for reconstruction in the business of refractive ophthalmic services.

This article highlights some of the profound changes in our field since the FDA first approved the use of excimer lasers for the correction of refractive errors in select patients 10 years ago. One major result is that ophthalmology is now one of the most entrepreneurial segments of medicine.


Upon the availability of laser vision correction, the ophthalmic industry slowly came to recognize that marketing was essential to growing a business entity. As a result, ophthalmologists learned about a variety of marketing strategies, including LASIK guarantees (eg, 20/20 or your money back) and free consultations. Interestingly, in some business models, the cost of marketing was or is greater than the cost of equipment, supplies, or labor. In an effort to evaluate success or failure from their marketing strategies, many practices began analyzing their rate of leads generated and conversion to surgery. This analysis evolved to the point that practices had to upgrade their software and telephone systems, recruit sales people, monitor calls, and institute training sessions for staff. Additionally, some business plans called for organizing optometric networks as part of a definitive marketing strategy.

In the late 1990s, advertisements for LASIK often promised more than the standard procedure could deliver, and the industry came under the scrutiny of federal and state regulators. Some surgeons and corporations were fined, whereas others successfully cited the first amendment. Investigations by state medical boards, inquiries by the Federal Trade Commission, and lawsuits alleging deceptive trade practices ensued, and the administrative costs of defense against these complaints became significant for a number of practices.

For refractive surgeons in general, medical litigation became a rational concern and is now a question of not whether but when one will be sued. Attentive to this fact, companies offering professional liability insurance quickly and dramatically raised their premiums, and some even elected not to insure busy refractive surgeons who had had any previous claims against them. Subsequently, practices began carefully refining their informed consent processes, marketing scripts, and preoperative counseling routines. Like all of medicine, the issue of tort reform became important to refractive surgeons, who became proactive about learning how to deal with risk-management issues effectively and appropriately.


The early corporate refractive surgery models considered laser vision correction to be a commodity. They developed direct-to-consumer marketing plans and pricing models. These centers offered low-cost, average-quality LASIK and were initially successful. Many private practices could not compete with corporations offering low prices. When the corporate centers went public, however, a number of them quickly failed. These providers had neglected to raise their prices sufficiently to cover their additional costs and remain profitable. Moreover, the low-cost, commodity-driven corporate models put zero emphasis on the surgeon. Once the portion (we estimate 15%) of candidates who consider price only was exhausted, procedural volume became flat.

Of interest is the corporate models that raised their prices and put some emphasis on the surgeon. Some of these corporations have survived and are now experiencing a resurgence. They continue to rely heavily on direct-to-consumer marketing and competitive pricing, but they also offer efficient call centers and state-of-the-art clinics with retail hours. The corporate centers are focused on laser vision correction, so their operations by nature are very efficient.


Although appropriate patient selection remains important, a variety of technological advances (eg, better profiles for laser beams, eye trackers, laser flap creation, and iris recognition) have significantly decreased the rate of complications and allowed for the treatment of increasingly complex cases. Because improvements in technology have also leveled the playing field among providers, surgeons are again competing with each other based on their business strategy and surgical expertise as well as their pricing.


Unlike RK, for which the effective treatment range was safely limited to a 4-mm optical zone and low ranges of myopia, laser vision correction significantly expanded the range of treatment to 8.00D of myopia and 3.00D of hyperopia, and it addressed astigmatism. Suddenly, a large proportion of people were candidates for refractive surgery. Because insurance companies denied numerous requests to cover refractive surgery, which was the correct decision, financing became necessary and routine (see the sidebar Financing Options).
Similarly, excimer laser manufacturers quickly realized that annuities in the user cards would be more profitable than the one-time sale of the equipment. This has been the case in the US since laser vision correction was introduced in late 1995, but it is only now becoming an issue outside the US with customized treatments and per-use fees. In the US, creative procedural pricing enabled a large percentage of refractive surgeons to use the equipment with less capital investment.


Because patients pay for laser vision correction, refractive practices have had to adopt a different business model than other ophthalmic subspecialties. A typical cataract practice may return calls received after 2 PM on the following day. Refractive practices must have staff available to take the phone calls or return them quickly. The practice's appearance must be modern and clean, and its hours of operation must fit the needs of patients (evening and Saturday hours are the most popular). E-mail is becoming an important means of addressing patients' questions, scheduling surgery, and routine postoperative management.


Laser vision correction emerged and matured during the last decade. Baby Boomers (born between 1946 and 1964) who were a dominant part of the expansive growth of this field from 1996 to the present will, during the next decade, not be appropriate candidates for the procedure because of age-related crystalline lens opacities. Still, surgeons will use laser vision correction on this patient demographic to eliminate any residual refractive error after the implantation of IOLs that solve presbyopia. Laser vision correction's annual growth rate will be 3% to 5% going forward. Whether the primary or secondary procedure, laser vision correction will remain the gold standard by which all future refractive surgeries' success will be measured. 

Dan Chambers is the Executive Director of the Key-Whitman Eye Center, Dallas, Texas. Mr. Chambers may be reached at (214) 379-1842;
Jim Denning is CEO of Discover Vision Centers in Kansas City, Missouri. Mr. Denning may be reached at (818) 350-4529;
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