Improvements in eye surgery technology over the past 20 years have changed the medical practices of many ophthalmologists in Michigan and given patients lower-cost treatment options.
While Medicare has ratcheted down physician and hospital reimbursement — with commercial payers following suit — lower-cost ambulatory surgery centers with cutting-edge technology have enjoyed payment increases, leading to a boom in outpatient surgery.
But the economic recession of 2007-09 forced the biggest change on practitioners who specialize in elective, cosmetic and refractive surgery, including Lasik, as large numbers of patients put off surgeries.
"We had a huge practice for Lasik — 40 employees and seven physicians. We were rock and rolling, we were so busy," said Robert Beitman, M.D., who founded West Bloomfield-based Beitman Laser Eye Institute in 1988.
In late 2007, Beitman and his four offices were performing 4,000 annual Lasik procedures at $1,500 per eye. By late 2008, those volumes dropped by 70 percent.
Refractive surgery helps to adjust focusing ability by reshaping the cornea, or front surface of the eye, reducing the need for glasses or contact lenses. Lasik — or laser-assisted in-situ keratomileusis — is by far the most popular, but other similar procedures include photorefractive keratectomy, which uses the Excimer surgical laser to reshape the cornea for better vision, and intrastromal corneal ring segments to treat myopia.
"Competition was huge before," Beitman said. "We had a large market share. People were advertising. I liked it because when a new ad came out, my phone rang all the time."
To deal with the downturn, Beitman modified his practice in several ways — consolidating into one office, adding more advanced technology and catering to a more affluent group of people who paid for higher quality and amenities, he said.
"We raised our prices slowly to about $2,000 per eye. Our volumes have stabilized at 100 procedures a month," said Beitman. "Now we have six employees, an optometrist (Jeffrey Rautio), and I am the only medical doctor."
Each year, 1.4 million cataract operations are performed nationally at a cost of $3.5 billion. Half of all Americans will have cataract surgery by age 80, and 30 million will do so over the next 10 years, according to the U.S. Centers for Disease Control and Prevention. Surgery removes the cataract, the cloudy lens, and replaces it with an artificial lens.
While the majority of eye surgeries have moved to outpatient centers, hospitals have adjusted by improving efficiencies and opening up freestanding centers of their own, said Paul Edwards, M.D., chairman of the department of ophthalmology at Henry Ford Health System.
Most of Henry Ford's 5,000 annual cataract surgeries are performed in its outpatient medical centers, but 2,000 retinal procedures are conducted in hospital operating rooms, Edwards said.
"Reimbursements have been declining the past 20 years," he said. "We used to get $2,000 per case for cataracts. Now it is $600 per case."
Besides higher overhead costs, surgeries at hospitals are also more expensive because it takes longer to get patients from surgery to recovery and to their hospital rooms, Edwards said.
"Ambulatory centers are used to rapid pace, getting them in and out and to their homes," he said. "The main change the past two or three years is the equipment. It is getting better all the time."
For example, Henry Ford purchased a new operating microscope for cataract and retinal surgery that cost nearly $100,000 and allows the system's 32 surgeons to be more precise.
"Ninety-nine percent of work now is done in the outpatient setting. We are doing less and less at the main hospital. Usually (inpatient surgery) is major issues — serious ocular injuries, infections and blindness in one eye," Edwards said.
He said the volume of Lasik and other elective or cosmetic procedures — droopy eyelids (blepharoplasty), eye lifts and brow lifts — have been declining the past 10 years because people have fewer disposable dollars.
"We were able to offer Lasik well below market cost at $999 per eye. Now it is about $2,000, and we are doing less of them," he said. "We are offering many more with enhancements to correct aberrations."
Edwards said new technology can map out aberrations in the cornea and lens and correct for the difference. "We get a lot better results," he said.
For example, Medicare pays for implants in cataract surgery that correct in one plane of vision — either for nearsightedness (distance vision) or farsightedness (near vision). Some of the newer multifocal intraocular lenses have the ability to correct vision in both planes, but Medicare does not pay for the premium lenses, he said.
"Patients like the multifocal lens, but they are expensive and (the physician services) must be paid out of pocket," Edwards said.
Of Henry Ford's 5,000 annual cataract operations, 10 percent to 15 percent of patients select the multifocal lens and pay out of pocket for the additional physician services Medicare does not cover, Edwards said.
At Michigan Outpatient Surgery Center in Fraser, Norbert Czajkowski, M.D., said of his practice's 1,600 cataract procedures each year, about 500 patients choose specialty lenses, either multifocal implants or toric lenses for astigmatism, or blurry vision.
"Our patients are thrilled with the results, and this counterbalances our lower payments for the standard cataract," he said.
Under reimbursement rules, Medicare pays a facility fee of $950 per eye for cataracts, which includes a $150 allocation for the standard lens. The cost to the facility for the standard lens, however, is $350, said Kathy Donigan, R.N., business manager for the Michigan Outpatient Surgery Center.
Physicians are paid $650 per eye for the surgical services to implant the standard lens, Donigan said.
But if a patient wants a specialty lens, the additional testing, counseling and higher cost for the lenses could run up the per-eye cost between $1,600 for the toric lens and $3,000 for the multifocal implants, Donigan said. Those charges do not include the cost of the $900 multifocal lens and the $500 toric lens, for which Medicare does not allow patients to be billed.
Steve Shapiro, M.D., acting chief medical officer of HealthPlus of Michigan in Flint, said HealthPlus and most other health insurers cover procedures that are medically necessary.
"Sometimes cosmetic surgery can be a medical issue," Shapiro said. For example, sagging or droopy eyelids can be medical if the patient's field of vision is limited above a certain amount, he said.
"We have a test we give patients with blinking lights to measure their field of vision," Shapiro said. "Most health plans will cover the procedure if the field of vision loss meets medical criteria."
But the new technology involving cataract surgery is not covered by Medicare or commercial insurance, Shapiro said.
"If you want to enhance your vision, that is fine," he said. "We will pay the amount for the basic coverage, and you pay the difference."
Czajkowski, who also heads the Fraser Eye Care Center and the Eye Care Center of Port Huron, said a growing number of small-practice surgeons are paying to use his facility for their Lasik procedures. He has issued medical credentials for about 25 surgeons.
"Business is good, but (with) the recent pay cuts (13 percent from Medicare), it has taken a lot to make ends meet now," said Czajkowski, noting that Medicare had threatened a 30 percent physician reimbursement cut. "Expenses go up continually, and it is has made it impossible for smaller practices to continue."
With five surgeons and four optometrists, Czajkowski said, his practice just added a sixth doctor.
"The larger practices are becoming larger because new doctors coming out find it too expensive to open their own practice," he said.
Donigan said the center was one of the first to open in Michigan in 1983, before the state had a certificate-of-need requirement in 1984.
"We worked with the state of Michigan to develop the CON regulations and used the model in Florida," Donigan said. "Surgery centers really ballooned in Michigan in the 1980s as other specialties got into the business."
To cut costs and maintain good patient services, Czajkowski said, his practice recently eliminated corneal transplants because reimbursement is below costs.
"We have to make patients feel you are spending more than adequate time with them, but we have relegated some of the dialogue to assistants," he said.
Over the next several years, Edwards said, the decline in professional fees for physicians will result in consolidation of some surgery centers.
"Our department has been growing, and more private doctors will join ambulatory care centers as a way to cover their overhead and pay for the new technology that is coming out every year, (much) of which is not being covered by insurance," Edwards said. "We have to be as efficient as we can to keep our costs down for patients."
At the Livonia Outpatient Surgery Center, Nate Kleinfeldt, M.D., co-owner with Saad Ahmad, M.D., said business is booming in cataract surgery because of the aging senior population.
Kleinfeldt also owns the Coburn-Kleinfeldt Eye Clinic, which has offices in Livonia and Dearborn and the recently opened a Warren clinic. The practice has six ophthalmologists and conducts about 2,600 cataract surgeries a year.
While reimbursement has declined the past several years, Kleinfeldt said his clinic has increased patient volume an average of 10 percent from referrals.
"All we do every day is eyes," he said. "It takes us 10 minutes to do a core cataract. Any hospital, in general, takes 20 minutes."
Kleinfeldt said patients can expect to have their cataract operations completed in less than an hour, compared with three hours at a typical hospital.
"We have a surgery center not to just do surgeries faster, but better," he said.