Live From Louisville
Speaker 1: Welcome to another episode of Ophthalmology off the Grid.
Today’s episode was recorded live at MillennialEYE Live in Louisville. For this special edition of the podcast, our host Dr. Gary Wörtz was joined on stage by Drs. Bill Wiley and Lance Ferguson.
In this interview, they discuss recent cuts to cataract surgery reimbursement and offer historical perspective on how drastic cuts have been over the past few decades. They also cover practical solutions for managing a practice amidst reimbursement cuts and weigh in on the different ways surgeons can add value to their service offerings.
Coming up, on Off the Grid.
Speaker 1: Ophthalmology off the Grid is an independent podcast produced by Bryn Mawr Communications and supported by advertising from Alcon. For a full listing of podcasts for eye care professionals, go to eyetube.net/podcasts.
Gary Wörtz, MD: This is our third Ophthalmology Off the Grid Live. We had Ike Ahmed first, we had Blake Williamson last year, and now I'm so excited to share the stage with Lance Ferguson, my partner, and Bill Wiley. We're really, really happy to be doing this.
Today, we're going to be talking about something that I think is a really hot topic in ophthalmology. It's probably hot for the wrong reasons. We love talking about technology. We love talking about advances in ophthalmology. How do we treat patients; how do we take care of our ourselves and our business?
But I think one topic we have to talk about as ophthalmologists, especially with a lot of anterior segment surgeons, is the recent cuts in cataract reimbursement. This is something that, if you've been around ophthalmology for a while, we've seen this almost slow and steady burn from the 1980s, and just a few years ago we got a big cut, and I kind of felt like, okay, we survived the big cut, they're going to sort of lay off of us, and hopefully it'll be like this and won't get worse. I feel like this recent 15% cut was sort of another gut punch.
What I would like to do is, I'd just kind of like you guys to give me a little bit, and maybe we can start with Lance. Lance is my partner at Commonwealth Eye Surgery. He has been my mentor since I was a resident. I used to sneak out of pediatric ophthalmology rotations and go watch Lance operate. I got to see what it was like in the real world. So, I can't encourage skipping out of residency rotations, but if you can find someone in your local area, if you're a resident, that is a private practice ophthalmologist doing good work, it's very important that you go shadow them. For me, it ended up with me having my dream job and getting to work with someone I really enjoy.
Lance, why don't you start by just giving us a little bit of a historical background on where cataract surgery was when you got out of training and what you've seen over the years.
Lance Ferguson, MD: Okay. Well first of all, I think that’s really smart to go mentor people. The Faulkners in Cincinnati, I did the same thing, and those prospective employers are interested in residents who are interested. You get your name out there early. That's important.
I started practice in 1985, and the reimbursement for cataract surgery at that time was $1,800, and although I didn't use this, they also paid the assistant surgeon, there is an assistant surgeon, $400 to put drops on the eye during the case and perhaps know where to use a Weck-Cel sponge to sop things up for the surgeon.
When I was driving over from Lexington this morning, I looked at the inflation calculator, and that comes out to just under $5,400 per case today. I challenge anybody in the audience to find some work, line, profession, that over the last 30 years is reimbursing you at 10% of what they reimbursed you and to have this many people still engaged. The reason is quality.
If you look at the cases in those days — and quality is a very difficult index to measure — American College of Eye Surgeons, we’ve tried, it’s a little abstruse, there are some type of markers that we can, you know ... first aid, visual acuity, cylinder, but the RBRVS system is flawed in that it's only based on time. As we've gotten better and offered more and more, we’re doing surgeries where people are seeing 20/20 1 day out as opposed to when I started extracapsular surgery, 10.5 mm incisions, seven sutures, 6 weeks recovery, PMMA lenses with holes in them. It's so much better. We see this entire progression.
But it’s also exciting, because Monday morning, Gary calls me evergreen, but my feet are running before they hit the ground Monday morning, and I'm an old guy, I just got Medicare, and I told Gary, “I'm 65,” and he said, “how are you seeing?”
Gary: Of course, that's what a cataract surgeon says to anyone who turns 65. Got glare and halo?
Lance: I said, “I'm seeing fine Gary.” And he says, “Glare testing?”
Lance: Glare testing, right?
Gary: Yeah, at night, you could have that.
Lance: I know. Some type of thing. So, I'm holding on. But the bottom line is, we're doing much, much better work, and we're being reimbursed less and less for it. Everybody see the Academy video on this last round of negotiations? It's really pretty good. And they worked as hard as they could, but it's a flawed system because it doesn't include quality. The fact that it only includes time doesn't behoove us to say, “I can do the case in 5 minutes.”
It is not good. Ophthalmology has got a great big target on its chest with Medicare. We're the largest consumer of the Medicare dollar of all the specialties. So, we've got a big target on our chest. I wondered who the winners were, and our orthopedic fellow brethren, they actually got a raise for laminectomy and discectomies, and I don't know if they have undergone the same type of technological advancement as cataract surgery.
We need to be our own advocates in that regard. That gives us kind of a perspective. We're making 10% of what we did, and we're working twice as hard and doing a lot better, so where do we go from here? I think the answer for everybody in this room is refractive cataract surgery, and we'll get a little bit more into how we get started with that later.
I think that it will give you not only better care for your patients — you put your fingers together and put the patient at the top of that apex, you'll never go wrong — but if we do refractive cataract surgery, you will enjoy your life much more and you'll get a greater sense of professionalism. We'll talk about that entry in a bit.
Gary: Bill, when this cut came out, were you expecting it, number one, and number two, how's this going to impact your business? Because it's not like we can go to our employees and say, “you're going to make 15% less.”
Bill Wiley, MD: Right.
Gary: We can't go to our industry partners and say, “we're going to pay 85% of what we used to pay for all of our consumables.” All of our fixed costs remain fixed. Our overhead remains fixed. This 15% comes purely out of what's leftover.
Bill: Right? I mean, if you'd done the math, Gary, let's say the average cataract surgeon bills $1 million in cataract surgery, and let's say he takes home, the average surgeon makes $250,000, and then if you say, okay, 15% less, you might think a 15% drop in your $250,000, not the end of the world, they're still making good money. But the problem is, you're taking it off that top line. So, you're taking $150,000 off that million dollars potentially …
Gary: $250,000 down to a $100,000; you're losing $150,000 of income.
Bill: That's right. Basically, you're taking a personal income hit of over 50% potentially. I remember back when I started in 2002, we had a Medicare cut. I think at that point we were making, let's say, $800 a cataract, and they cut us 5%. I looked at our business at that time, and we were almost all cataract at that time, or 100% cataracts, and I was worried. I did the quick math, and I'm like, “I'll take a 5% haircut.” And I'm like, “well wait a minute.” At that point it's going to be, let's say, going from $250,000 down to $200,000, so it's a pretty significant haircut. I remember thinking, “well maybe we've got to diversify our offerings.” When I started, we didn't have premium lenses. You didn't have an option a to have a cash pay sector. At that time our practice was 100% insurance reimbursement.
When I look at our practice today, we're basically 60% cash pay and rising. So, you've now got this cash pay segment that you can set the price, the market will set that price. What is your value to the market? You have the ability to adjust that year-to-year, day-to-day if you wanted to. So now, all of a sudden, we're taking a 15% haircut, but cataract surgery maybe is only a portion of what we're doing, and then it's only a portion of that payer mix. You're taking it out of that, let's say, 40% insurance reimbursement part of our practice. So, I think diversification is really helpful.
Back then, we didn't have opticals in our practice, we didn't have cash pay, premium lenses, we didn't have laser eye surgery like we do now. So, there's all these different diverse areas of income. To be honest, when I heard that 15% haircut, I said, “you know what? Maybe this is going to be pulling the Band-Aid off, and it's going to break the system, and we can rebuild.” At some point, we can't take that haircut anymore and it's going to really force us to rebuild. At that point, do a lot of surgeons come out of this insurance reimbursement system? If you're 60% cash pay, maybe you go to 100% cash pay at that point.
Gary: And that's the interesting dichotomy as you look this. On one hand, we have the benefit of refractive surgery, cash pay systems, and refractive cataract surgery, and it's hard to overstate how important that is to our business. If you're a resident or you're in training or you're a young ophthalmologist and you're thinking about just doing straight Medicare, standard cataract surgery, it's going to be hard to survive.
Lance, what are your thoughts on adding refractive cataract surgery to your practice? If you're either, let's say on the one hand, just coming out of training, maybe you haven't had a lot of experience in that setting, and so you’re developing your refractive skills, or you're mid-career and you've said, “at this point I can't continue to function and run my business and care for my employees with this.” How would you encourage people to sort of get started in this refractive game?
Lance: Well, let's start with the residents first. I don't know about you all, but when I got out, it was kind of hard for me to ask anybody to pay me for anything I did. After being a resident so long, I just said, “I'm going to get paid for this? I mean this has always been fun, but now we're actually getting paid for it.” Your value to these individuals is much better than what you're probably receiving. Your sight's so precious, and I don't have to tell you all of the way the patients react to it. So, if I were a resident coming out right now, I would begin my plan to develop refractive cataract surgery. I think that can be done with three easy steps, and you don't need a femtosecond laser, you don't need an excimer laser, and you don't have to be doing a hundred cases a week to tweak your LRI nomogram.
I know many people are very reluctant about doing peripheral AKs, and they've never been taught that as a resident. So, where do we start? It's really, I think, just a three-step process. I think the first thing you need to do is determine your surgically induced astigmatism. You need to know your SIA right off the bat, not only superiorly and laterally and temporally, because you need to operate on axis. That's your first step in learning how to do this.
You use your regular case, and I know there's some residual astigmatism, unless you're using like the Callisto or something of that sort, but you get on axis, and you'd be surprised at the amount of people that you can get down to within a less than half diopter cylinder.
Also, I'd like you to try and consider using different size keratomes. I don't want to interfere with your technique, but the 3.2 at 12 o'clock is going to give you about three quarters against the rule. You'll change the size of your incision. Provided you keep the geometry stable, you won't have any wound leaks, as long as that box looks the same as far as your incision goes. So, you should know that flat out. That's step one.
Step two is you have to have access, not owned, but have access to an excimer laser and PRK skills. I think Dr. Eiferman here in Louisville is actually incorporating the residents. They come and watch us, but I think because of some liability issues, they are not allowed to actually participate. But they're actually going to be doing that, and I think all the residency positions. But if you didn't get that in your residency, find a mentor. It's not that difficult as far as a technical skill is concerned, but you need to have that in your bag of tricks. You need that in your armamentarium.
The third step, after you do those things, is to move to torics and actually move to specialty lenses, and that's a little bit farther down the road. Now we've got a person that says, “Ok, I can get you if you are…” and don't talk 20/20, 20/30 … “can you do the majority of your visual tasks at distance uncorrected?”
That's what I am selling you as far as a premium experience. If we can get you to do the majority of your physical tasks at distance or near, and I can get you there, but you've got to have a way to touch it up. You've got to be able to advance. You're more than just doing a placement of your incision. You have to have buffed that cornea out to make sure you get them there, and then once that happens you can begin charging for it. I think you'll have to eat it a little bit as far as the PRK goes, but maybe charge 500-800 bucks for a PRK. If you figure a 10% enhancement rate, then you'd have to add $80 to your procedure. But I think that's a great way to start. You don't have to make a huge investment. You can simply stay with what you're doing, operate on axis, and then correct it with a PRK.
Bill: Yeah, those are all great ideas, and I think operating on axis and looking at astigmatism is definitely underutilized. I remember when I was training, it was before we had IOL masters, we just had manual care autonomy and keratometry, and I'd asked the residents below me, I said, “Ok, well what are the cases?” They'd say “Oh, 44 by 46, and I'd say, “What axis?” and they're like, “Well I didn't check the axis, it's just 44 by 46.”
At that point we didn't really care what the steep axis was, and then I remember thinking, “Every cataract surgery you do is truly refractive surgery, and you should look at it that way.” Even if they're not paying out of pocket, just look at that eye. Look at the astigmatism and where it is, where can you operate, where can you reduce that, and get good at every case you're doing, and then when you start charging, you're going to have that confidence that you'll get them to where they need to be.
Other things that are potentially paradigm shifts that will kind of potentially level the playing field as far as technology and skillset is a new lens that we've been using called RxSight, or the light adjustable lens. What's cool about that is, you don't need fancy preoperative diagnostics. You don't need a femtosecond laser. You just put this lens in, and all you need is a light delivery device that could be housed at the surgery center. You come back 2 or 3 weeks later and use light to adjust that lens to fit the eye, and you can hit almost any refraction that patient is desiring.
So, I can see that type of technology really leveling the playing field and letting almost any surgeon that is doing cataract surgery offer a premium outcome and not necessarily have to worry about a toric lens in alignment and positioning, or a multifocal lens, are they going to have glare or halo?, and do you have a skill set to touch them up or access to a laser to touch them up? So, I see that the light adjustable lens may truly be a paradigm shift, getting a lot of surgeons into the market for premium advanced cataract surgery.
Gary: I think another point to all this, I just want to share a little of my story, and we're kind of talking about walking before you run, and as soon as you get out of training, it's very easy to want to immediately have all the toys, all the technology. You kind of feel like there's this starting price, or there's a fee to entry to become a refractive surgeon. So, when I came out of training, I immediately bought an excimer laser. I equipped a nice office with fancy furniture.
Lance: Expensive excimer laser.
Gary: Expensive. I had an OCT, a fundus camera, way too much equipment, and I realized pretty quickly that that stuff doesn't always pay for itself. Now, it can if you're smart about it, if you understand, have an established practice, you add a piece of equipment to your established practice, yes, that's a good way to go about it.
But I would encourage anyone who's starting a practice or starting out to be very, very cautious, because what we're talking about here is overhead, and that's the other side of the coin. We really can't control individually what we're paid for cataract surgery, other than doing the refractive piece. What we do have control of, and this is the other side of the coin, is overhead, and that's something that I think, Lance, you've really shown me the way on this. Managing your overhead. What are your thoughts on that, about taking technology and using it for long periods of time? Extending useful life. I mean, what's your philosophy on that? Because, I feel like by keeping expenses down, you can sort of insulate yourself against cuts in the future.
Lance: Well, that kind of investment's always a decision. We've been lucky. Gary terms it as wise, as far as our purchases, but I like to be on the cutting edge, but not necessarily the bleeding edge. When I was your age, I was on the bleeding edge. I really wanted to try every new technology, but I think a stepwise approach is really the smartest thing. You need a team. You need to build an army. You need to have an accountant that understands depreciation. You need to make sure those things matter. Let's go back to Bill's thing. You're making 1 million bucks in cataract revenues. You’ve got a 50% overhead. Ok, bam, you get a 15% cut, and now you're making 850, but guess what? The overhead didn't go down. In fact, it's going to go up because you’ve got to increase your costs to pay to keep successful people in your army around you. You're going to have an increased cost of supplies. I mean, BSS doubled in price. Diamox was a nickel a tablet. It's like 2.50 a tablet. You see sometimes 100% increases. You really need to get your pencil sharpened to get down to that before you make these big investments.
Let's go back. Okay, at 850, it's still five, so you're making $500,000 in the first instance, now it's 350, and the next time it's going to be under two. I'm not saying that's the only reason to do things, but I think everybody sitting out here who’s doing a good job is at least worth more than that when you look at the average, particularly when you compare it to many other professions and many other items that people buy, jet skis or the latest computers.
So, get down and make sure you really look at everything, every line item in your practice that you do, and say, “Can we do this better? Can it make more sense? Can we let people go home earlier? Why are we getting so much overhead here?” Those are the things, if you get a good team, a good practice manager on, but you have to be a driver in this. You have to sit down with these folks and really get this all ferreted it out before you make these big investments. Otherwise it'll bite you.
Gary: Bill, what are your thoughts on advocacy? I've been one who sort of watched from the sidelines. I see things happening and I don't always know what I can do or what I am going to do as an individual to address this. So, I thought this one thing I can do is I can lend my voice to this discussion. That's kind of why I wanted to do this. But do you have any thoughts on what we can do as a collective group to try to change the narrative that cataract surgery is easy, it's fast, and these guys and gals are making too much money and we're just going to keep cutting them so we can keep making them work harder for the same or less amount of money? How do we change the narrative, and is that possible?
Bill: Yeah, good question. I mean, I think it can be hard as an individual to change that narrative, but you can join organizations that are like-minded. I'm a member of a society called Society for Excellence in Eyecare, and it's been strong with advocacy in the past, particularly let's say with ophthalmology and optometry and co-management and things like that. We've definitely moved the needle and helped push some initiatives. Maybe we can do something with these cuts. But then you have organizations like ASCRS or AECOS, other organizations that have like-minded individuals that maybe as a group we can help push that narrative in our direction.
I think we do have to be careful, as sort of a field, a lot of times our groups do sort of divide us as maybe, the Academy is leaning one way, and ASCRS is leaning in another way, and we start to think, “Ok, well how do we really get on the same page?” I think we do have some opportunities to bring some of the organizations together on big initiatives like this when we're all thinking maybe like-minded, but I think there are opportunities, and I think you should look to your colleagues and see where are they grouping up. You kind of have that collective dollar to push that needle.
Gary: I remember back when I was in medical school there was this ... narrative that there were too many anesthesiologists and anesthesiology is going to be the worst field to go into. All of a sudden, because of this narrative, no one went into anesthesiology. Anesthesiology became, like, the easiest residency to go into. Then all of a sudden there was this vacuum of anesthesiologists, and it became, again, really competitive and a great field.
I think we have to be a little bit careful when we hear a narrative and we start hearing people push the panic button to keep our feet under us and remember that the sky is not falling. As much as this can hurt, as much as this is something that we need to insulate ourselves and protect ourselves against and do everything we can, we have to remember that. We're a little biased, but I strongly believe this is the most special field in all of medicine in terms of the way we impact people's quality of life, and whenever we can deliver some quality to patients like that, there's always going to be a market for it. I just want to ask Lance and Bill, where do you see the opportunities in the future? What makes you excited about where ophthalmology is going? I don't want this just to be all doldrums about cataract surgery, but what are you excited about in the future?
Bill: Yeah, great thing. I think, regardless, we're still in the greatest field of medicine and there's huge opportunities. You look at where we've come and where we're going. There are so many great technologies that are available. I look at the cash pay segment. It's basically allows the market to set our value, and if we can determine a better product, a better way to see distance or near or have whatever kind of vision or lifestyle, and if we can achieve that, the market will pay and we'll be reimbursed. So, we're in a great, great position. With that in mind, I think there's opportunities as we're getting cut. Look at where are some other revenue sources or ways to kind of make ends meet. I see that working with industry, there's opportunity. Basically every chart that we have is valuable based on the data that's there.
I think if you can take advantage and track your data, share your data, report your data, I think there's ways you can do investigator-initiated trials and work with an industry sponsor. Now that there is this cash pay option, industry is looking at that and saying, “Gosh, well yeah we want to push this narrative, but we need the data to help us.” They're looking for us, and I think the ball's in our court to be able to work with them to help develop those new technologies. So certainly, as we're getting cut in one area, I think there's other opportunities in other areas, and we have to keep our minds open and, like Gary said, not just focus on a negative there.
Lance: Yeah, those are all good comments. I think if I were coming out right now, the first thing I would recommend you do is get involved in a group, get involved with AECOS or CEDARS or ASCRS or SEE. I'm a member of SEE. I'm kind of a boy scout with ACES, as far as trying to continually perfect, and like I said, I've been doing this for 35 years, and it really is the best field of medicine. I saw a slide from Steven Dell one time, and he put it up and he said, “The worst day in ophthalmology is better than the best day in internal medicine.”
That's right. We're very lucky in that regard. So how do we do this? We have a lot of smart people in this room and a lot of motivated people. How do we do this? Well, I think you start with a society, and then we get a consortium, and then we look at other models. I'm actually going to have Gary comment a little bit about this because he came back from one of his think tanks and said, “What about conclusive models when we can make prices transparent?”
Let’s think about bilateral sequential same day surgery. Now, the downside of that is that if we have a mistake or, as far as a hyperopic surprise on a post-RK patient, we've put two lenses in. It's less and less and less. Our enhancement rate on refractive cataract surgery is very, very low. It's like 0.7 to 1.5%. It's much less than regular refractive surgery, but that may be an offing, the reason people don't do it. There are certainly risks involved, but it's been done in Canada, and if it's done sequentially and with a new room and a new set, it's basically like having a separate surgery on the same day. But that may be part of a future model. I think I'm going to let you run with this because you had some ideas on that.
Gary: I think about efficiency, and that's where we can drive more patients through. I mean, at some point, as the baby boomer population comes of age, there are more cataracts to be done. So, we're going to have to think about increasing efficiencies. I think bilateral sequential cataract surgery is the future. I think it's something that most of the people coming out of training will see, definitely in their lifetime, but I'm guessing in the next 5 to 10 years. I think it's going to become the new normal. But what's going to have to happen is, we're going to have to have some level of negotiation that we're not going to take a 50% cut on the second procedure because it's the same amount of work, and it's the same amount of risk, and it's the same amount of cost.
We can't do this if we're going to take a 50% cut. It's going to have to be a par rate. So, that's something that I'm advocating for. There's been some studies from Kaiser Permanente in the U.S. They're a capitated system, so reimbursement doesn't matter as much in that system. They're all about efficiency. But they're looking at huge numbers of patients who've done great in office-based settings as well. I'm much more of a fan of the ASC side of that. But regardless, there is a lot of opportunity to increase our efficiency, especially when we look at post-op exams and pre-op exams and not having the patient coming back for so many visits. We can see them, get them taken care of, and they're on their way.
The other part of this that I think, as I'm evaluating this, I really think that this is an opportunity for us all to really embrace MIGS. We had some great talks this weekend about the technology that's coming of age. All technologies tend to need that beachhead, and iStent was that beachhead. It's great, and I think we're seeing with angle surgeries and other devices and different stenting devices, we are seeing a real revolution in glaucoma, so much so that I'm actually interested in it a little bit. Now don't tell anyone that, but I really think that there's some huge advantages of taking care of our patients surgically who have glaucoma in the setting of cataract and refractive cataract surgery. So, this may be a way we can add procedures, we can add value, and, again, get some increased reimbursement for the value that we provide. Any parting thoughts, guys, we've got about a minute left here, about what excites you, things that others should do to get involved?
Bill: One other thing, and you guys are sort of masters of this, but working with physician extenders, let's say optometry or physician assistants, I think is a huge opportunity. You see the volume of work that's coming our way, and, yes, we might get some cuts in reimbursement, but we have an opportunity to work with other physicians that will do a lot of the care, and we can focus in on what we do best. I know your practice has truly been a pioneer in that area. I think you've almost taken it for granted. But what you've done in that area, I think a lot of practices could follow footstep and basically make back some of the cuts that were getting hit with.
Gary: Any final thoughts, Lance?
Lance: First of all, everybody in here is really lucky to be an ophthalmologist or an optometrist or a resident or fellow. I feel it's the best for me. If you're a problem solver, it's very gratifying. So, keep that in mind. And I want to leave you with one other thing. There's lots of things to do here to increase revenue, but Jerry Freeman in Nashville, or Memphis I think, he put his hands together and said, “Look at the top where my fingers go together.” He said that's the point of it. That's the patient, and if you put the patient right there and you pick your opportunities and your technologies wisely, you'll advance that. And if you keep your focus on that, everything's going to fall into place.
Gary: Well, I don't think we could end it on any better note, just talking about how the patients are always our number one priority. All the rest of it are the details. They matter, but keeping the patient first is absolutely about pinnacle. All right. Thank you, guys, so much for being a part of Off the Grid Live. It has been a real honor to share the stage and the microphone with you. Thank you so much.
Speaker 1: Despite reimbursement cuts, there are reasons to be excited about the future of cataract surgery. It’s an opportunity to embrace different avenues, like refractive cataract surgery, bilateral sequential cataract surgery, and MIGS. And, as Dr. Ferguson said, the most important thing is to keep the focus on the patient, and the rest will fall into place.
Just a quick note for listeners before we sign off: In the discussion you just heard, Dr. Ferguson commented that residents from the University of Louisville and University of Kentucky come to his practice to observe LASIK, but they do not participate with him specifically. We want to clarify that, in the training programs themselves, the residents are being certified to perform LASIK, thanks to a collaboration with Johnson & Johnson Vision.
Thanks to our listeners for tuning in for this special live episode. This has been Ophthalmology off the Grid. Until next time.
Speaker 1: Ophthalmology off the Grid is an independent podcast produced by Bryn Mawr Communications and supported by advertising from Alcon. For a full listing of podcasts for eye care professionals, go to eyetube.net/podcasts.