Why Ophthalmology Has Lost Some Luster

[exPCM]

Ophthamology is a popular field and one of the ROAD specilaties.
However, the table below illustrates part of the reason why ophthalmology is not quite as popular a field to go into now as it was 20 years ago.

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[JaggerPlate]

Ophthamology is a popular field and one of the ROAD specilaties.
However, the table below illustrates part of the reason why ophthalmology is not quite as popular a field to go into now as it was 20 years ago.

I think CMS said they are getting an 11% medicare bump at least.

 

[exPCM]

I think CMS said they are getting an 11% medicare bump at least.

I am afraid that is not the full story
That 11% is spaced out over 4 years and is only true if the SGR cuts are reversed rather than only delayed. In any case, I think it is highly likely that inflation will be at least 11% in total over the next 4 years.

Reference: http://www.aao.org/aaoesite/coding/coding_newsarchive.cfm#3

 

[JaggerPlate]

I am afraid that is not the full story
That 11% is spaced out over 4 years and is only true if the SGR cuts are reversed rather than only delayed. In any case, I think it is highly likely that inflation will be at least 11% in total over the next 4 years.

Reference: http://www.aao.org/aaoesite/coding/coding_newsarchive.cfm#3

Yikes.

 

[exPCM]

I have gotten an email from an SDN administrator that it is not appropriate to post volatile topics and this thread has been classified as a volatile topic so I will signoff on this thread.
Good luck to those who are in the upcoming match.

 

[Kitra101]

I have gotten an email from an SDN administrator that it is not appropriate to post volatile topics and this thread has been classified as a volatile topic so I will signoff on this thread.
Good luck to those who are in the upcoming match.

Why is it not fair to post of "volatile" issues? It is done all the time in the pathology section. In fact, there are more "pathology job market worse than anything" threads in that section than most other threads. I think this should not be swept under the rug as many academicians seem to be willing to do. I also think that doctors should not bend over and grab their ankles for the politicians. If we are to continually take salary cuts, we should demand tort reform, med school tuition subsidies by taxes and cuts in income to insurance companies, pharma, lawyers and politicians as well. Furthermore, lets put more emphasis into preventative medicine and some responsibility on the patients to work to be healthy.

 

[MstaKing10]

I also think that doctors should not bend over and grab their ankles for the politicians.

Here, here!!!

I think the subject heading is what was "volatile" but the subject itself is not. In fact, now more than ever we need to be aware of these issues as they will be affecting us for the rest of our careers. Is a sight created for those interested in or already practicing ophthalmology not the right place for this type of discussion?

 

[DKofLV]

I have gotten an email from an SDN administrator that it is not appropriate to post volatile topics and this thread has been classified as a volatile topic so I will signoff on this thread.
Good luck to those who are in the upcoming match.

bump

 

[JaggerPlate]

Do a post/thread start history ... I don't think this thread wasn't one of the numerous he was targeted for.

 

[KHE]

I am afraid that is not the full story
That 11% is spaced out over 4 years and is only true if the SGR cuts are reversed rather than only delayed. In any case, I think it is highly likely that inflation will be at least 11% in total over the next 4 years.

Reference: http://www.aao.org/aaoesite/coding/coding_newsarchive.cfm#3

Interesting table though it does seem that declining reimbursements for ophthalmology aren't that far off what they are for other specialties.

Also, in the past, an intracap cataract extraction required a large incision, much larger incidence of endophthalmitis, longer hospital stays, etc. etc.

With modern techniques, a cataract extraction can take 10 minutes and be about as "invasive" as having a tooth filled.

So I guess the question I would ask is: What do you all think IS a fair reimbursement for cataract surgery?

Please don't go into any diatribes about overhead, staff, urban vs rural office locations etc. etc. I own a practice too. I get all of that. I understand all of those issues.

What is a fair reimbursement for a cataract surgery, and more importantly, why?

 

[Meibomian SxN]

Interesting table though it does seem that declining reimbursements for ophthalmology aren't that far off what they are for other specialties....

Imagine taking a pay cut like Ortho (hip replacement & knee replacement)! Sheesh...

 

[orbitsurgMD]

Interesting table though it does seem that declining reimbursements for ophthalmology aren't that far off what they are for other specialties.

Also, in the past, an intracap cataract extraction required a large incision, much larger incidence of endophthalmitis, longer hospital stays, etc. etc.

With modern techniques, a cataract extraction can take 10 minutes and be about as "invasive" as having a tooth filled.

So I guess the question I would ask is: What do you all think IS a fair reimbursement for cataract surgery?

Please don't go into any diatribes about overhead, staff, urban vs rural office locations etc. etc. I own a practice too. I get all of that. I understand all of those issues.

What is a fair reimbursement for a cataract surgery, and more importantly, why?

An excellent heart surgeon takes less time to do an open-heart valvuloplasty than does a less skillful but average surgeon. That translates into less time on bypass, less anesthesia risk, and better outcomes. Does the fact that he does his procedure more quickly mean it is worth less? Does the fact that he uses better instruments and materials and has the benefit of a more evolved technique all the sudden mean his work is worth less?

This is not microchips, here. These are not manufactured goods. Moore's "law" (not a law, just a humorous observation, really) does not apply. The cost of obtaining education and training and supporting a practice has gone up, year after year. Why would it not make sense to assume that because the modern surgeon produces much more value in much less time--a better, less traumatic and easier to endure procedure, his hourly rate today should be proportionally much higher than his less evolved predecessor?

So what is better vision from a modern surgery "worth."

We could say it is worth whatever someone will pay for it. Unfortunately, with no true market, and with a legislatively-leveraged near-monopsony (collusion for fee-fixing allowed for payers, but illegal for sellers) we have, we are stuck with the dictates of Medicare, which is the nearly exclusive payer for cataract surgery, since most cataract patients are Medicare beneficiaries over age 65.

Point of reference: the actual numbers of dollars paid today for a cataract surgery is less than that paid in 1967, when Medicare started paying for that procedure. In constant dollars, today's procedure is priced at 17% of that of 1967.

A cataract operation is a once-per-eye-per-lifetime procedure.

Is a good surgery worth more than a 40-inch LCD television?

Is a good surgery worth more than a round-trip ticket to London?

Is a good surgery worth more two monthly payments on an average American sedan, assuming a 48-month loan?

What is seeing better worth?

I think it is worth much more than all of those other things, much, much, more.

 

[KHE]

An excellent heart surgeon takes less time to do an open-heart valvuloplasty than does a less skillful but average surgeon. That translates into less time on bypass, less anesthesia risk, and better outcomes. Does the fact that he does his procedure more quickly mean it is worth less? Does the fact that he uses better instruments and materials and has the benefit of a more evolved technique all the sudden mean his work is worth less?

This is not microchips, here. These are not manufactured goods. Moore's "law" (not a law, just a humorous observation, really) does not apply. The cost of obtaining education and training and supporting a practice has gone up, year after year. Why would it not make sense to assume that because the modern surgeon produces much more value in much less time--a better, less traumatic and easier to endure procedure, his hourly rate today should be proportionally much higher than his less evolved predecessor?

So what is better vision from a modern surgery "worth."

We could say it is worth whatever someone will pay for it. Unfortunately, with no true market, and with a legislatively-leveraged near-monopsony (collusion for fee-fixing allowed for payers, but illegal for sellers) we have, we are stuck with the dictates of Medicare, which is the nearly exclusive payer for cataract surgery, since most cataract patients are Medicare beneficiaries over age 65.

Point of reference: the actual numbers of dollars paid today for a cataract surgery is less than that paid in 1967, when Medicare started paying for that procedure. In constant dollars, today's procedure is priced at 17% of that of 1967.

A cataract operation is a once-per-eye-per-lifetime procedure.

Is a good surgery worth more than a 40-inch LCD television?

Is a good surgery worth more than a round-trip ticket to London?

Is a good surgery worth more two monthly payments on an average American sedan, assuming a 48-month loan?

What is seeing better worth?

I think it is worth much more than all of those other things, much, much, more.

Lots and lots of text there with plenty of hyperbole but still no actual statement as to what a cataract surgery SHOULD be worth in your eyes......

Care to state at actual number?

 

[orbitsurgMD]

Lots and lots of text there with plenty of hyperbole but still no actual statement as to what a cataract surgery SHOULD be worth in your eyes......

Care to state at actual number?

You have to read that text, for comprehension.

I think it would not be unreasonable for a surgeon to charge $3,000 or more for a state-of-the-art cataract surgery. It is worth more than LASIK, in my estimation, and takes much more skill.

The fairest thing to do is for Medicare to eliminate the upper limiting charge. That would allow surgeons who thought they could justify a higher price to discover just what the market thinks of them. Others, who think they could charge less, deliver quality results and satisfy patients while compensating for lower charges with increased volume, they could charge less.

There. You have a number. Feel better?

 

[KHE]

You have to read that text, for comprehension.

I think it would not be unreasonable for a surgeon to charge $3,000 or more for a state-of-the-art cataract surgery. It is worth more than LASIK, in my estimation, and takes much more skill.

The fairest thing to do is for Medicare to eliminate the upper limiting charge. That would allow surgeons who thought they could justify a higher price to discover just what the market thinks of them. Others, who think they could charge less, deliver quality results and satisfy patients while compensating for lower charges with increased volume, they could charge less.

There. You have a number. Feel better?

Ok, so $3000 then. My experience has been that none of the providers in my area are charging $3000 as the rack rate to non insured patients. So it seems that even providers now don't feel that they could get away with a $3000 charge. What makes you think that they would be able to do so if medicare simply eliminated the upper limit?

 

[orbitsurgMD]

Ok, so $3000 then. My experience has been that none of the providers in my area are charging $3000 as the rack rate to non insured patients. So it seems that even providers now don't feel that they could get away with a $3000 charge. What makes you think that they would be able to do so if medicare simply eliminated the upper limit?

Trial and error.

In some places, where the community has enough people with enough resources, there will probably be some who would pay $3000. In other communities, not.

This actually is done in India. If you want the case done with phaco, nice state of the art multifocal or foldable European-made lenses, you pay one rate. If you can't pay for that, there are lower rates, maybe by SICS rather than phaco, maybe by trisector, maybe with a non-folding, Indian-made PMMA implant, and the cost is much cheaper.

 

[KHE]

Trial and error.

In some places, where the community has enough people with enough resources, there will probably be some who would pay $3000. In other communities, not.

This actually is done in India. If you want the case done with phaco, nice state of the art multifocal or foldable European-made lenses, you pay one rate. If you can't pay for that, there are lower rates, maybe by SICS rather than phaco, maybe by trisector, maybe with a non-folding, Indian-made PMMA implant, and the cost is much cheaper.

In our litigious society, I don't know if something like that would fly well. I'm also not sure about the whole trial and error thing. I practice in Connecticut and we have a few "big whig" ophthalmologists around here and even in the uber uber wealthy parts of CT, guys aren't charging that kind of dough for cataract extractions.

 

[orbitsurgMD]

In our litigious society, I don't know if something like that would fly well. I'm also not sure about the whole trial and error thing. I practice in Connecticut and we have a few "big whig" ophthalmologists around here and even in the uber uber wealthy parts of CT, guys aren't charging that kind of dough for cataract extractions.

Why would litigiousness have anything to do with it? People will sue regardless of how much or how little they paid.

 

[orbitsurgMD]

In our litigious society, I don't know if something like that would fly well. I'm also not sure about the whole trial and error thing. I practice in Connecticut and we have a few "big whig" ophthalmologists around here and even in the uber uber wealthy parts of CT, guys aren't charging that kind of dough for cataract extractions.

Many cataract surgeons have a set charge higher than you might think. They can then use that to offer discounts to cash-paying patients, which there are not generally too many of, for reasons I mentioned earlier. Patients with commercial insurance who are not Medicare eligible will pay whatever the schedule of the carrier generally allows, but it isn't usually $3K, in most cases, it would be a third of that, maybe a little more. Since cash business is attractive, there would be a motivation to offer discounts to around the prices of other commercial payers, but not to the level of Medicare. If there are extra considerations, like custom IOLs or clear-lens extraction or multifocal IOLs or combinations of LASIK with cataract extraction or some other refractive feature of the cataract surgery, the price would probably go up significantly to reflect the elective/refractive nature to the service.

So much depends on the local practice community, its familiarity with competitive pricing, proximity of metropolitan academic centers, income levels, and so forth. You can't sell uber-expensive eyeglass frames everywhere, either.

I know in some places, where high-volume cataract surgery is done and the practice model is front-ended with optpometrists and referral is done internally to the practice surgeons, the "big man" restricts his surgical referrals to those wanting upgraded services, and the non-custom cases are sent to the junior ophthalmologists.

 

[guttata]

Ok, so $3000 then. My experience has been that none of the providers in my area are charging $3000 as the rack rate to non insured patients. So it seems that even providers now don't feel that they could get away with a $3000 charge. What makes you think that they would be able to do so if medicare simply eliminated the upper limit?

For some reason, insured patients feel entitled to 'free' medical care because they have already 'paid' their deductibles. It is amazing how many patients will complain about a $40 refraction fee for a yearly exam, but never balk at a $1000-2000 dental bill for a crown or root canal. Or pay $500-600 at the auto shop without questioning it (at least not directly). Because of crappy dental insurance, most of us expect to pay through the nose when we visit the dentist. But, most of us expect to pay little when visiting a medical professional. If this were not the case, I think surgeons could charge a whole lot more for cataract surgery - a lot more than the $600 reimbursed by the government. Sure cataract surgery can take less than 10 minutes. It can also take more than 40 minutes dependent on patient, hospital, and surgeon factors.

 

[Meibomian SxN]

Ok, so $3000 then. My experience has been that none of the providers in my area are charging $3000 as the rack rate to non insured patients. So it seems that even providers now don't feel that they could get away with a $3000 charge. What makes you think that they would be able to do so if medicare simply eliminated the upper limit?

So what do they charge for ICL surgeries then? I assumed it was around $3000 and up.

 

[KHE]

Many cataract surgeons have a set charge higher than you might think. They can then use that to offer discounts to cash-paying patients, which there are not generally too many of, for reasons I mentioned earlier.

Well that's exactly my point. No one charges $3000 per eye around here. (unless you want one of those fancy pants accommodating IOLs and then the charge is almost entirely for the IOL, not the surgery.) What's the point of charging some huge fee if you then give some huge discount on it?

Patients with commercial insurance who are not Medicare eligible will pay whatever the schedule of the carrier generally allows, but it isn't usually $3K, in most cases, it would be a third of that, maybe a little more.

Since cash business is attractive, there would be a motivation to offer discounts to around the prices of other commercial payers, but not to the level of Medicare.

I still don't get this. You've said earlier that you feel the surgery should is worth $3000. Now you seem to be saying you want to charge a bunch of money so that you can then discount it to the level of commercial payors which is around $1000. Why not just charge the $1000 right from the start and eliminate the charade of the discount? On the hope that someone will agree to the higher fee?

I also don't get why cash business is attractive in our industry. I have never found that to be the case. Talking about the surgery exclusively, and not multifocal IOLs etc. "cash paying" means that the patients do not have insurance which almost always means that they are poor, or working poor and can almost never afford any sort of fee even remotely approaching the number you've suggested.

For whatever reason, the trade publications always seem to talk about this huge, untapped, cash paying market of all these wealthy patients just dying to pay some eye care provider hundreds and hundreds if not thousands of dollars for exams, surgeries, and eyewear if only they could find that one special doc.

I've never seen this in any practice, state, or locale I've ever practiced in. Cash paying almost always means "poor" which almost always means good luck trying to collect unless you get it all upfront and even then, most of the time they do not present for surgery.

If there are extra considerations, like custom IOLs or clear-lens extraction or multifocal IOLs or combinations of LASIK with cataract extraction or some other refractive feature of the cataract surgery, the price would probably go up significantly to reflect the elective/refractive nature to the service.

Yes, around here people do charge high fees for multifocal IOLs and/or LASIK. But again the high fee is related entirely to something other than the catarct surgery itself.

So much depends on the local practice community, its familiarity with competitive pricing, proximity of metropolitan academic centers, income levels, and so forth. You can't sell uber-expensive eyeglass frames everywhere, either.

Of course not. So when you said that you think that cataract surgery should be worth about $3000, were you just saying that as wishful thinking?

I know in some places, where high-volume cataract surgery is done and the practice model is front-ended with optpometrists and referral is done internally to the practice surgeons, the "big man" restricts his surgical referrals to those wanting upgraded services, and the non-custom cases are sent to the junior ophthalmologists.

But again, what is the charge for the actual surgery itself, not all the add ons?

 

[KHE]

For some reason, insured patients feel entitled to 'free' medical care because they have already 'paid' their deductibles. It is amazing how many patients will complain about a $40 refraction fee for a yearly exam, but never balk at a $1000-2000 dental bill for a crown or root canal.

Well the only defense I can come up with for that is that patients usually (and really, not unreasonably) assume that a refraction is part of an eye exam. They don't get the idea that that part of it is a non covered service.

Or pay $500-600 at the auto shop without questioning it (at least not directly). Because of crappy dental insurance, most of us expect to pay through the nose when we visit the dentist. But, most of us expect to pay little when visiting a medical professional.

You've used the key word there. Expectations. Study after study shows that people do not get very upset when things go wrong. They get extremely upset when things don't go as expected.

If this were not the case, I think surgeons could charge a whole lot more for cataract surgery - a lot more than the $600 reimbursed by the government. Sure cataract surgery can take less than 10 minutes. It can also take more than 40 minutes dependent on patient, hospital, and surgeon factors.

As I said before, no surgeon in my area charges high fees for surgery to cash paying patients and I practice in Connecticut which is full of all kinds of wealthy neighborhoods. My practice is not in a wealthy part of the state but the hot shots in Greenwich and Darien aren't charging through the nose either. Why?

 

[orbitsurgMD]

Well that's exactly my point. No one charges $3000 per eye around here. (unless you want one of those fancy pants accommodating IOLs and then the charge is almost entirely for the IOL, not the surgery.) What's the point of charging some huge fee if you then give some huge discount on it?

Control. You get to decide how much to discount on a case-by case basis.

I still don't get this. You've said earlier that you feel the surgery should is worth $3000. Now you seem to be saying you want to charge a bunch of money so that you can then discount it to the level of commercial payors which is around $1000. Why not just charge the $1000 right from the start and eliminate the charade of the discount? On the hope that someone will agree to the higher fee?

Control. When you have a higher fee, you have the opportunity to discount to a level you think appropriate whenever it seems most appropriate and necessary. I might not want to charge everyone $1000. Someone who has a difficult problem that I know can pay more and who will require extra work, I don't think I should have to discount as much as another person who has very limited ability to pay but whose needs won't present a particularly large drain on my resources. Honestly, I don't know why you have such difficulty with this idea. Do you think architects or lawyers or others quote the same flat amount for every client? Some things I might like the challenge of doing, and some patients I want to work with and some I think I would be uniquely be able to help, I should be able to price attractively, and others less so. I may not want to do every cataract for $1000. Why do you think I should have to? My practice is not a NJTP toll plaza.

I also don't get why cash business is attractive in our industry. I have never found that to be the case. Talking about the surgery exclusively, and not multifocal IOLs etc. "cash paying" means that the patients do not have insurance which almost always means that they are poor, or working poor and can almost never afford any sort of fee even remotely approaching the number you've suggested.

Evidently you need to spend some time dealing with Medicare and private insurers. I dislike all of them. Cash payment is a far better method. It's nice. You work, get paid and take the money to a bank. No CMS 1500s or rejections or delays to being paid.

For whatever reason, the trade publications always seem to talk about this huge, untapped, cash paying market of all these wealthy patients just dying to pay some eye care provider hundreds and hundreds if not thousands of dollars for exams, surgeries, and eyewear if only they could find that one special doc.

The trade journals make their money on advertisement. They recycle the same stuff almost every year. They are expected to beat the drum for business. They have a bias. Do you think they are really presenting an accurate prediction of the future? Do you think they for one moment consider what is actually going in our country and economy or are willing to say so if they knew? Heck no. No one would buy ad space from them if they did.

I've never seen this in any practice, state, or locale I've ever practiced in. Cash paying almost always means "poor" which almost always means good luck trying to collect unless you get it all upfront and even then, most of the time they do not present for surgery.

Not always. I get taken most often when I do work in the ED, but about half the time, I get paid. "Cash pay" means just that unless you are referring to the euphemistic "self-pay" which is, I agree an indicator of "no pay."

Of course not. So when you said that you think that cataract surgery should be worth about $3000, were you just saying that as wishful thinking?

Relative to other things of enduring value, I think it is underpriced. Unfortunately, most of the cataract "market" is federal government monopsony, so we can talk all day about what I think or what you think cataract surgery is "worth" and it makes no difference. If the CMS says it pays $650, that is what it pays and its "worth" is irrelevant.

 

[KHE]

Control. You get to decide how much to discount on a case-by case basis.

That's true in theory but if you're constantly discounting your fee, then the fee isn't really the fee.

Control. When you have a higher fee, you have the opportunity to discount to a level you think appropriate whenever it seems most appropriate and necessary. I might not want to charge everyone $1000. Someone who has a difficult problem that I know can pay more and who will require extra work, I don't think I should have to discount as much as another person who has very limited ability to pay but whose needs won't present a particularly large drain on my resources.

To me, that's much more legitimate although again, if you don't have a significant number of people paying the rack rate, then is it really your fee?

Honestly, I don't know why you have such difficulty with this idea. Do you think architects or lawyers or others quote the same flat amount for every client? Some things I might like the challenge of doing, and some patients I want to work with and some I think I would be uniquely be able to help, I should be able to price attractively, and others less so. I may not want to do every cataract for $1000. Why do you think I should have to? My practice is not a NJTP toll plaza.

The lawyers and architects I've dealt with have all charged hourly fees. Maybe physicians should do the same?

I don't have a problem with not charging everyone $1000, or $5000, or a million dollars. I just don't get the concept of having some huge fee and then constantly discounting it. Discounting should be the exception, not the rule.

Evidently you need to spend some time dealing with Medicare and private insurers. I dislike all of them. Cash payment is a far better method. It's nice. You work, get paid and take the money to a bank. No CMS 1500s or rejections or delays to being paid.

My practice is almost entirely 3rd party and we see patients in about 8 local nursing homes so a huge percentage of it is medicare so I'm all too familiar with Medicare and private insurers and the bull**** hassles contained therein.

Not always. I get taken most often when I do work in the ED, but about half the time, I get paid. "Cash pay" means just that unless you are referring to the euphemistic "self-pay" which is, I agree an indicator of "no pay."

Maybe this is the source of the confusion. To me, "cash pay" is the same as "self pay" which is the same as no third party paying. What does cash pay mean to you?

Relative to other things of enduring value, I think it is underpriced. Unfortunately, most of the cataract "market" is federal government monopsony, so we can talk all day about what I think or what you think cataract surgery is "worth" and it makes no difference. If the CMS says it pays $650, that is what it pays and its "worth" is irrelevant.

My original point in all of that though was that the OP posted a list showing of reduced medicare payments for cataract procedures but the same list shows a number of similar declines across all medical specialties. So it's not as if the reduction of procedures by medicare is exclusive to ophthalmology. Most of the cataract "market" may well be a federal government monopoly but I would imagine that so is the prostatectomy market.

 

[Stark]

Basically, you have to enjoy your work to enter the field - or you will hate your job regardless of reimbursement.

I asked a prominent (and wealthy) radiation oncologist how she ever got into the field. Rad-onc is one of the hardest specialties to enter with no call and great reimbursement. She said, "When I applied, it was the only specialty an IMG could enter." - - - now it's one of the hardest!

Ophthalmology reimbursements are low - but we cannot predict where they will be in the next 10 or 20 years when a similar graph is printed for 2026.

So - - - do ophtho if you think cataract surgery is cool (or retina surgery is cool or the eye is cool). There's no predicting future reimbursements.

Stark

 

[Mirror Form]

So - - - do ophtho if you think cataract surgery is cool (or retina surgery is cool or the eye is cool). There's no predicting future reimbursements.

Stark

Well, except that we can assume primary care will never make any money

 

[Stark]

Touche!

 

[Mirror Form]

This is not microchips, here. These are not manufactured goods. Moore's "law" (not a law, just a humorous observation, really) does not apply. The cost of obtaining education and training and supporting a practice has gone up, year after year. Why would it not make sense to assume that because the modern surgeon produces much more value in much less time--a better, less traumatic and easier to endure procedure, his hourly rate today should be proportionally much higher than his less evolved predecessor?

That's what physicians have been saying for the past 40 years. But we haven't been effectively lobbying. And when it comes down to it, the people making decisions on health care reimbursements do think of surgery exactly like any other manufactured good, except maybe that it concerns a politically touchy subject.

Unfortunately, the vast majority of the people in this country do not value good surgery because we have a "standard of care" that everyone receives whether they're homeless or upper middle class. It's just considered a basic right to most people.

 

[KHE]

That's what physicians have been saying for the past 40 years. But we haven't been effectively lobbying. And when it comes down to it, the people making decisions on health care reimbursements do think of surgery exactly like any other manufactured good, except maybe that it concerns a politically touchy subject.

Well on some level that's true but looking at "surgery" as a service rather than as a manufactured good, the powers that be look at things like "what does it cost to perform this service?"

Now, if it obviously takes less OR time, less complication rates resulting in less office time or hospitalization costs, etc. etc. then that service is now in some ways worth less though as you point out in some ways it's worth MORE. How does one balance that? And how does one balance that in a real world situation where there is a finite amount of resources to provide these things? As providers we all look at things like this and think that it's the most valuable thing in the world because it's safer and faster and the results are better and it basically heals the blind so it should be worth a bilion dollars an eye but is that the entire story there?

I think the problem with most of eyecare is that very few things in it are particularly painful and cataract is certainly one of them. I've had dental pain where I paid an endodontist $700 for a root canal and I would have paid him 7 million just to get rid of the pain. We've all had patients with minor abbrasions or corneal foreign bodies that are in severe pain who are willingt o pay us anything. But because cataract surgery is rarely urgent, we just don't have that luxury and that unfortunately affects people's perception of it's value. Maybe God should make cataracts more painful.

Unfortunately, the vast majority of the people in this country do not value good surgery because we have a "standard of care" that everyone receives whether they're homeless or upper middle class. It's just considered a basic right to most people.

That I don't think is particularly relevant because the standard of care represents the minimum. I mean there's a minimum standard in any licensed profession whether it's doctors, lawyers, accountants or the person cutting your hair. People may have an unrealistic perception or expectation of what the minimum is or should be, but it's still the minimum. Surely you wouldn't advocate surgeons doing cataract surgery for $3000 an eye that meets the standard while allowing others to do it for $200 that doesn't.

 

[orbitsurgMD]

Well on some level that's true but looking at "surgery" as a service rather than as a manufactured good, the powers that be look at things like "what does it cost to perform this service?"

Now, if it obviously takes less OR time, less complication rates resulting in less office time or hospitalization costs, etc. etc. then that service is now in some ways worth less though as you point out in some ways it's worth MORE. How does one balance that? And how does one balance that in a real world situation where there is a finite amount of resources to provide these things? As providers we all look at things like this and think that it's the most valuable thing in the world because it's safer and faster and the results are better and it basically heals the blind so it should be worth a bilion dollars an eye but is that the entire story there?

I think the problem with most of eyecare is that very few things in it are particularly painful and cataract is certainly one of them. I've had dental pain where I paid an endodontist $700 for a root canal and I would have paid him 7 million just to get rid of the pain. We've all had patients with minor abbrasions or corneal foreign bodies that are in severe pain who are willingt o pay us anything. But because cataract surgery is rarely urgent, we just don't have that luxury and that unfortunately affects people's perception of it's value. Maybe God should make cataracts more painful.



That I don't think is particularly relevant because the standard of care represents the minimum. I mean there's a minimum standard in any licensed profession whether it's doctors, lawyers, accountants or the person cutting your hair. People may have an unrealistic perception or expectation of what the minimum is or should be, but it's still the minimum. Surely you wouldn't advocate surgeons doing cataract surgery for $3000 an eye that meets the standard while allowing others to do it for $200 that doesn't.

Rising expectations, which have certainly occurred with cataract surgery patients (enough people think they should be able to see well without glasses following cataract surgery, no matter what they are told to expect pre-operatively, just because they know someone who said they didn't need glasses after their cataract surgery) that cost ought to reflect those expectations. If you want refractive expectations, pay refractive prices, not the bottom-of-the-barrel Medicare rate.

 

[KHE]

Rising expectations, which have certainly occurred with cataract surgery patients (enough people think they should be able to see well without glasses following cataract surgery, no matter what they are told to expect pre-operatively, just because they know someone who said they didn't need glasses after their cataract surgery) that cost ought to reflect those expectations. If you want refractive expectations, pay refractive prices, not the bottom-of-the-barrel Medicare rate.

So how much onus is there on the surgeons in those cases to deliver refractive results if someone is paying refractive prices? And what is "refractive prices" anyways? There's LASIK centres all over the place charging peanuts for surgery.

 

[badasshairday]

Why don't all Opthal's just drop medicare? Surely you can charge $1000 for a cataract operation. I'm sure people will pay it, because it is either that or going blind. Most people value there vision and $1000 is cheap compared to what people pay for yearly sattelite TV or a new HD TV. This is ridiculous to see that chart. I didn't know that physicians are now suppose to take rates that auto mechanics take to replace parts.

 

[Stark]

Why don't all Opthal's just drop medicare? Surely you can charge $1000 for a cataract operation.

$1,000 won't cover your overhead, that plan won't work.

I know a guy in New Jersey who slowly dropped each and every insurer - he charges $500 cash for a cataract evaluation and $5,000 for a cataract surgery. This after 20 years of building his reputation in the community. He also does refractive.

As for dropping medicare, in John Pinto's "Little Green Book of Ophthalmology" he states that for a cataract surgery today, the physician walks away with 200 profit per surgery. With current Medicare reimbursement at 600 per surgery - that's $400 to cover overhead and $200 profit.

BUT THERE'S ALSO THE FACILITY FEE. In Pinto's book, he says if you own your own surgery center, the physician walks away with an additional $300 dollars per surgery. With Reimbursement at about 2500 per surgery (facility fee) that's 2,200 to cover overhead and 300 profit.

So, it appears to me, to drop medicare and keep income the same, the price of the surgery would have to be about, $3,100 - just using Pinto's average numbers.

Finally - 80% to 90% of "cataract" patients have medicare. They are in their 60's to 80's and it is their only insurance. If you drop it, you drop the one insurer that covers almost all typical "cataract" patients. The patients go across the street to the other guy. Same surgery for a 20% co-pay or $3,100 dollars. . .

Another side of the coin, Medicare can only drop reimbursements by $500 more before it is no longer profitable to do cataract surgery. At that point, ophthalmologists will drop Medicare en masse or stop doing the surgery (as each surgery would be a net loss for the physician).

Interesting to think about.

Stark,

Mnemonics in Ophthalmology
USMLE Audio
Gold Standard Audio

 

[orbitsurgMD]

$1,000 won't cover your overhead, that plan won't work.

I know a guy in New Jersey who slowly dropped each and every insurer - he charges $500 cash for a cataract evaluation and $5,000 for a cataract surgery. This after 20 years of building his reputation in the community. He also does refractive.

As for dropping medicare, in John Pinto's "Little Green Book of Ophthalmology" he states that for a cataract surgery today, the physician walks away with 200 profit per surgery. With current Medicare reimbursement at 600 per surgery - that's $400 to cover overhead and $200 profit.

BUT THERE'S ALSO THE FACILITY FEE. In Pinto's book, he says if you own your own surgery center, the physician walks away with an additional $300 dollars per surgery. With Reimbursement at about 2500 per surgery (facility fee) that's 2,200 to cover overhead and 300 profit.

So, it appears to me, to drop medicare and keep income the same, the price of the surgery would have to be about, $3,100 - just using Pinto's average numbers.

Finally - 80% to 90% of "cataract" patients have medicare. They are in their 60's to 80's and it is their only insurance. If you drop it, you drop the one insurer that covers almost all typical "cataract" patients. The patients go across the street to the other guy. Same surgery for a 20% co-pay or $3,100 dollars. . .

Another side of the coin, Medicare can only drop reimbursements by $500 more before it is no longer profitable to do cataract surgery. At that point, ophthalmologists will drop Medicare en masse or stop doing the surgery (as each surgery would be a net loss for the physician).

Interesting to think about.

Stark,

Mnemonics in Ophthalmology
USMLE Audio
Gold Standard Audio

Where are you getting $2500 for a cataract facility fee? The 2010 CMS rate is about $970 for a cataract with IOL, 1 stage. (picking Columbus OH as an example.)

When considering revenue from a surgery center, you have to also consider the high fixed costs of a CMS-certified ASC facility which, even in a minimum building and equipment plan would cost nearly $1 million. Then there are the operations costs which are also substantial; figure at least double your amortized facility cost for a bare-bones part-time facility. It is reasonable to predict that at least 90% of your cataract patients will be Medicare beneficiaries. I doubt you will be walking away with anything close to $300 per case; probably a lot less unless you do a substantial volume of cataract surgeries.

As for calling everything "profit" outside of overhead, you fall into the semantic trap of treating all pay to the doctor as "profit," unless you are implying a base salary paid to the doctor above the line (I don't think you were.) Properly considered, the doctor should also be added as a fair market value cost with a salary value, as his presence is essential to operations.

 

[Stark]

I'll run the numbers when I get back to the office Monday and give you the quotes from Pinto's book.

Until then. . .

 

[Mirror Form]

Why don't all Opthal's just drop medicare?

Why? Because that would require some sort of union and that is not legal for physicians. If any group of ophthalmologists tried to drop medicaire, the patient would just go to the practice across the street.

 

[Stark]

Okay, I couldn't wait 'til Monday, here are Pinto's actual numbers: (I'm not checking my billing, I'm checking Pinto's book)

OrbitsurgMD (Rosen, is that you?) is right, the 2,500 number is incorrect - I admit it and apologize. But the global profits are close to what I mentioned.



"John Pinto's Little Green Book of Ophthalmology" states it this way in chapter 1, Strategic Business Planning:

"If a practice has it's own ASC, it is generating about $1,500 per case with roughly a 40% global profit margin, or $600 in profit. . . Therefore, the profit per surgeon hour is about $600."

So, you "profit" $600 per surgery if you own the ASC.

"Obviously, without the ASC, the numbers are much less attractive. . . Let's be conservative and assume the cataract global professional fee is $600 and the practice's profitability (without an ASC to boost profits) is 35%. This works out to just $210 in profit per surgeon hour."

*NOTE: Both scenarios assume "It takes about 60 minutes for a cataract surgeon to transit the total care of an eye." - - - I assume this mean total pre-op, operative, and post-op chair time.

So, you could indeed drop the price of cataract surgery to $1000 per case and that would produce a "global profit" of $100 per case (as compared to the $600 or $210 in the scenario's mentioned by Pinto above).

And, similar to as stated before, Medicare could lower reimbursements by $600 or more before cataract surgery would be performed at break-even or a loss - and it would no longer be profitable to perform cataract surgery under Medicare in the United States.


I encourage everyone interested in the economics of eyecare to purchase Pinto's book.

All the Best!

 

[MullerCell]

Why would you assume a cataract takes an hour? A fast surgeon working 2 rooms in and ASC can do 8 cases an hour.

 

[200UL]

Why would you assume a cataract takes an hour? A fast surgeon working 2 rooms in and ASC can do 8 cases an hour.

MullerCell. As mentioned above, 60 minutes includes pre / post op care. Also remember, with the 90 day global, there is no charges for 3 months of post op visits.

Also you must be a very impressive fellow surgeon if you think doing 8 cases an hour is the norm. I would love to see you operate.

Finally, regarding the statement from badasshairday... Many patients on the medicare age are very tight - even when it comes to vision. Many have to be as they are on fixed incomes. I have witnessed patients walk around with 20/60 vision for 2-3 years until they hit the magic age of 65 when surgeries like cataract surgery become practical. Americans expect to pay for car repairs, TVs, cell phones - medical care is expected to be free by some.

 

[orbitsurgMD]

Okay, I couldn't wait 'til Monday, here are Pinto's actual numbers: (I'm not checking my billing, I'm checking Pinto's book)

OrbitsurgMD (Rosen, is that you?) is right, the 2,500 number is incorrect - I admit it and apologize. But the global profits are close to what I mentioned.



"John Pinto's Little Green Book of Ophthalmology" states it this way in chapter 1, Strategic Business Planning:

"If a practice has it's own ASC, it is generating about $1,500 per case with roughly a 40% global profit margin, or $600 in profit. . . Therefore, the profit per surgeon hour is about $600."

So, you "profit" $600 per surgery if you own the ASC.

"Obviously, without the ASC, the numbers are much less attractive. . . Let's be conservative and assume the cataract global professional fee is $600 and the practice's profitability (without an ASC to boost profits) is 35%. This works out to just $210 in profit per surgeon hour."

*NOTE: Both scenarios assume "It takes about 60 minutes for a cataract surgeon to transit the total care of an eye." - - - I assume this mean total pre-op, operative, and post-op chair time.

So, you could indeed drop the price of cataract surgery to $1000 per case and that would produce a "global profit" of $100 per case (as compared to the $600 or $210 in the scenario's mentioned by Pinto above).

And, similar to as stated before, Medicare could lower reimbursements by $600 or more before cataract surgery would be performed at break-even or a loss - and it would no longer be profitable to perform cataract surgery under Medicare in the United States.


I encourage everyone interested in the economics of eyecare to purchase Pinto's book.

All the Best!

With ADR to John Pinto, the analysis misses some important considerations in claiming that there is $600 headroom in cataract surgery.

For one thing, you aren't considering the "opportunity costs" of that full scope of a cataract surgical treatment course. Preop care and three postop visits really represent five office appointments not used for other practice revenue capturing activity (counting biometry and equivalent office time for a 99213) the value of which is about $400 in Medicare payments, excluding the time spent in the OR (which for many efficient surgeons is still 25 minutes per case, considering preop meeting, postop with family and the surgery--the surgeons routinely doing 30+ cataracts per day do not chit-chat and frequently have special staff to do the family counseling postop, which adds not-insignificant staffing costs).

Doing thumbnail calculation for a one OR center (minimal setup and often excluded in certificate of need states) a 15 cataract per week practice would collect about $700K in payment and have $550K in expenses and net about $200 per cataract (assuming a 48 week working year with 720 cataracts).

If you are net 35% of revenue on a $600 cataract payment, $210, and adding the $200 net from the ASC operations, you are at the $410 "profit" point. Subtract the cost of the OR day which could be spent seeing office patients and doing office procedures. The same time could probably yield $50 in net office "profit" for each of the 15 cataract patients operated on the OR day. Then subtract the "profit" (e.g. 35%, this example) of the uncompensated office time pre and post-op, $140 and your net gain is $220 per case versus staying in the office and working. And that is making a lot of assumptions: owning the ASC, having a practice volume that generates 15 cataract cases every week, and so forth.

Obviously, one does not trade one for the other. Doing cataract surgery is a core practice activity for a general ophthalmologist, and it is why practices exist and attract referrals. But the margin to the point of "losing" money, in a relative sense, is much narrower than John Pinto is implying. If my example is true, and in many places it is, then we are already at the point where doctors who don't own an ASC (or a share of one) will be losing if cataract payments to surgeons are cut any further.

I agree that John's book is worth reading, BTW. But the numbers have changed since the book went to print.

I have also completely ignored the additional relative risk/skill value of cataract surgery versus office encounter activity. That really deserves better compensation on its face. That said, one may ask rhetorically:"why take the additional risk or endure the effort if one is compensated no better than if one spent the same time in office practice activity?"

 

[200UL]

I do not have the numbers down like orbitsurgMD, but the bottom line is if they cut it anymore, it will not be practical for many surgeons to do surgery. The ACGME states surgical skill is needed to call oneself an ophthalmologist. However, some of the best surgeons I know do not do "7 minute cases." Such action would be dangerous for any surgeon when treating high levels of pathology.

Moreover, forcing one to do sub 10 minute cases to break even will not work with the current system. Even the fast cutters would loose money on tough cases - these would be dumped on university settings - oh wait that already happens.

We may be heading to a system where there are groups of "technical ophthalmologists" and groups of "clinical ophthalmologists." From a financial standpoint, we have already entered an era where one should refer all "true pathology" away from their practice.

Most importantly, these trends are not specific to ophthalmology. They do apply to all areas of medicine where direct patient care is delivered(perhaps with the exception of pathology, anesthesia, radiology).

 

[MullerCell]

200UL, I wasn't suggesting that 8 cases/hour is the norm coming out of residency or for difficult cases. However, for high volume cataract surgeons in mid-career doing uncomplicated cases, I don't think this is a stretch at all. ASC time is expensive, and it makes sense to use it for straight forward cases that should be quick in order to maximize profit. The same is true for retina surgery. ERMs and macular holes that can be done with small gauge surgery with retrobulbar and MAC are preferable to PVR detachments and complicated diabetic TRDs in an ASC setting.

 

[exPCM]

Do a post/thread start history ... I don't think this thread wasn't one of the numerous he was targeted for.

The first amendment does not apply in the minds of some.
Also I believe there are some med students/residents who do not realize the extent of the cuts to physician reimbursements across all specialties. Many parents of current students think that an MD/DO degree is an automatic road to riches and that is no longer the case. The docs of today are working a lot more for a lot less in aggregate. I think the cuts in physician reimbursement are horrendous. The feds just postponed another round of Medicare cuts and enacted a freeze until October 1. If you think about it a freeze is effectively a pay cut as expenses rise with inflation and reimbursement stays flat.
Here is the email I received:
Dear exPCM,

You have received an infraction at Student Doctor Network Forums.

Reason: harassment/flaming
-------
We have received numerous complaints about multiple threads you have posted in multiple forums. In reviewing your recent threads, it appears that you have been posting threads in forums that are very negative about the members of those forums or volatile topics for those forums. Many of these are posted in the guise of "helpful information" for the members of those forums. Whatever your initial intent, posting volatile topics in multiple forums is not helpful and comes across as trolling to many of our members.

It is a violation of the Terms of Service of SDN to post in a forum in a manner to harass or deride the members of the forum.

[TOS]Harassment and Flaming
The Student Doctor Network members are not permitted to harass or "flame" other members. Please do not post or transmit any unlawful, harmful, threatening, abusive, harassing, defamatory, vulgar, obscene, profane, hateful, racially, ethnically or otherwise objectionable material of any kind, including, but not limited to, any material which encourages conduct that would constitute a criminal offense, violate the rights of others, or otherwise violate any applicable local, state, national or international law. Please note that this also includes the posting of taunts on a forum solely for the purpose of deriding that forum's topic and/or members.[/quote]

I expect that this posting pattern will change. If you continue, you could end up with more infractions and could end up having your account banned.

I appreciate your understanding on this.

DrMom
SDN Administrator


Examples of threads that fit into this category include:
The coming residency bloodbath
exPCM
General Residency Issues

Osteopathic Schools Ranked by MCAT
exPCM
Pre-Medical Osteopathic [ DO ]

Possible threat to FP
exPCM
Clinicians [ RN / NP / PA ]

Why Ophthalmology Has Lost Some Luster
exPCM
Ophthalmology: Eye Physicians & Surgeons

List of Programs That Terminate Residents
exPCM
General Residency Issues

Story About The Carribean
exPCM
Caribbean

2007 average annual crna salary: $178,084
exPCM
Midlevel Anesthesia Providers
-------

This infraction is worth 1 point(s) and may result in restricted access until it expires. Serious infractions will never expire.

All the best,
Student Doctor Network Forums

 

[VA Hopeful Dr]

Meh, it happens. I've seen your posts in other threads and nothing seemed too bad, but there are those with thinner skins who likely got upset by something you said and reported you.

That being said, posting a PM like you just did can get you into real trouble. I'd take it down were I you.

 

[DrMassacre]

Moderators are losers with too much time on their hands. Like giving out points or banning people is going to affect our lives.