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Up Front | Apr 2008

What Is the Forecast for LASIK Volume?

The business' technology, economics, and demographics all have an effect.

If you view the current LASIK market by looking at some of the big providers' falling stock prices, the horizon may seem gloomy. There is more than the current economic atmosphere to consider, however, when thinking about the future of LASIK. It is important to take the bigger picture into account and the contributing factors that will help determine the long-term outlook for LASIK. Various aspects will help determine where the market is headed.

FACTOR NO. 1: TECHNOLOGY
Three major elements influence LASIK's volume. The first is technology. Excimer lasers helped to establish the LASIK industry, and microkeratome-created flaps subsequently made the procedure marketable to patients. Feeding the success of LASIK were the expanded approvals for the use of excimer lasers to treat high myopia, mixed astigmatism, and hyperopia. Femtosecond lasers, customized wavefront abberometers, and iris recognition have all incrementally grown the LASIK market as well.

FACTOR NO. 2: ECONOMICS
The second aspect is economic conditions. Refractive surgery is an elective procedure, which translates into a dependence on patients' disposable income. Since the FDA's approvals of excimer lasers starting in 1996, the industry has experienced two booms and two busts: the dot-com boom/bust and the current subprime real estate boom/bust. It took about 3 months for the industry to feel the effects of the dot-com bust. The negative effects lasted around 16 months. I think the same will be true of the current subprime real estate bust. It will probably have a negative influence on LASIK growth through June 2009.

FACTOR NO. 3: DEMOGRAPHICS
The third issue is demographics, which have a longer influence (15 to 20 years) on the volume of laser vision correction surgery (Table 1).

In 1996, when excimer lasers started to enter the commercial market, the average age of baby boomers was 41. Interestingly, the average age of the laser vision patient was also 41 up until approximately 2002. Since then, the mean age of the laser vision correction patient has slowly declined as the baby boomers' age and as the Generation Xpopulation enters the market. At the Information Resources Information Sharing Meeting (the gathering of a secret handshake group) held in July 2007, practices surveyed reported that the average age of myopic patients seeking laser refractive surgery had decreased to 37. Noteworthy is how close this age is to the median age of the Generation Xgroup. In 2008, the leading age of the baby boomer is 62, the trailing edge is 44, and the average age is 53 (Table 1). Most surgeons might agree that the baby boomers have aged past the "sweet spot" for myopic laser vision correction. In fact, the market will most likely report a slight increase in hyperopic procedures as a direct result of the aging of this population. In my opinion, hyperopic laser surgery will follow the same marketing mix as contact lenses. Currently, the contact lens market is composed of 82 myopes and 18 hyperopes (with multifocal contact lenses included in the hyperopic numbers).

The Generation Xgroup, which is about half the size of the baby boomer group, is currently the prime market for myopic laser vision correction. It is a smaller population and thus has had a direct effect on slowing the market's growth. The next group after Generation X, however, is known as Generation Y. Interestingly, it accounts for two times the number of people in Generation X—creating, in essence, a typical double camelback curve (Figure 1). The LASIK industry has at least 10 years before experiencing significant impact from Generation Y, however, as the leading age of this group is 26 years, but the average of the group is only 17.

OVERLOOKED COMPETITOR TO LASIK
The often overlooked competitor to the LASIK market, especially for the future Generation Y consumers, is the contact lens industry. Contact lenses have changed drastically over the past 5 years, and they offer new and extended-wear designs that are attractive to patients ranging in age from 13 to 55 years. Many of the old complaints about contact lenses (discomfort, dry eye, lack of versatility, difficulty of use, safety) have been answered in the new designs, and, thus, the age ranges for those who are largely tolerant of contact lenses have jumped an average of 5 to 10 years.

The price point is important also. A modern pair of contacts costs about $25.00 per month, whereas financed laser vision correction costs about $125.00 per month for 2 years.

The best approach for those marketing LASIK in the future remains lifestyle advantages. Regardless of how inexpensive and improved contact lenses are, LASIK reigns when it comes to lifestyle activities such as swimming and sports.

THE FUTURE OF THE INDUSTRY
Overall, I believe the laser vision market will remain healthy. Given the movement in demographics, it is safe to assume that myopic laser vision procedures will grow from 2 to 4 during the next 5 years. In my opinion, this growth will improve 1 per year until it reaches 10 to 12. The current candidates for this procedure have declined as a result of the population in the Generation Xgroup's being the prime age market. The market can be expanded, however, by accessing patients with lower degrees of myopia and by attracting younger patients through savvy marketing.

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



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Apr 2008