As the Medicare patient base continues to grow, so will the number of instances of cataracts affecting these patients. While Medicare reimbursement for cataract procedures saw small increases with the new payment system, cataract cases are still a potentially solid addition for a surgery center looking to increase profits and case volumes.
The cost of the equipment needed to perform this type of surgery is not inexpensive. ASCs considering equipping themselves with the latest in cataract technology can expect to invest anywhere from $100,000 to $150,000 per OR in capital equipment, such as phacoemulsifiers, microscopes, and instrumentation. In addition to the equipment expenditures, thousands more dollars will be spent in related inventory items such as intraocular lenses, balanced salt solution, viscoelastics, equipment tubing, custom eye packs and other surgical supplies.
However, organizations interested in determining whether cataract surgery can become a profitable addition to their centers can consider soliciting the services of a cataract outsourcing company to alleviate the capital investment and inventory hassles.
This turnkey service can provide an ASC with all of the equipment it needs to perform cataract surgery on a case-by-case basis, customized to meet a center’s needs and its surgeons’ surgical preferences. A representative from the cataract outsourcing company will bring the requested and required equipment and surgical supplies to the ASC for the scheduled cataract surgery day, and may become part of the surgical team by monitoring the equipment, handling inventory needs and assisting with room turnover in between cases. Once surgeries are completed, the representative loads up the equipment and the excess supplies and then leaves the ASC. Cataract outsourcing companies that offer this service may provide other benefits as well.
So might a mobile cataract service be right for your ASC?
Ann Deters, co-founder of Vantage Technology, a cataract outsourcing service based in Effingham, Ill. and serving both urban and rural facilities in 19 states, says that "many of the company’s clients are not just new organizations considering whether cataract surgery is a wise addition to their surgery schedule, but rather they are high-volume centers that have been doing cataract procedures for years and are looking to upgrade equipment, lower costs, and/or increase efficiencies. Time and time again, we have proven to these types of clients how cataract outsourcing saves them money, improves their profits and eliminates a lot of their hassles with eye equipment and inventory."
Ms. Deters shared the following 12 benefits — for centers considering cataract surgery and more mature centers performing ophthalmology — of working with a cataract outsourcing company:
1. No capital investment. One of the biggest barriers for centers considering adding any new specialty is the investment of significant capital to obtain the equipment necessary to perform the new cases, assuming such capital is even available. With cataract outsourcing, as long as you have an operating room and an ophthalmologist who can perform cataract surgery, you can perform the procedures without investing a dime in purchasing equipment.
"It’s a great way to test the market risk-free," Ms. Deters says. "You don’t have the outlay of the equipment upfront, plus you don’t have the on-going maintenance contracts, repair costs and replacement expenditures."
2. No inventory. The added investment and work needed to maintain a proper inventory can be another deterrent for ASCs considering adding cataract services. With a mobile cataract services company, this factor becomes a non-issue.
"It’s just-in-time inventory with no ordering headaches; you call in with the number of cases you have scheduled, you pay for the product and service as you use it. There’s no obsolescence, no inventory storage, there’s no last minute shipping and no need to stress about having the right supplies on hand," Ms. Deters says.
If there is any concern about physicians potentially leaving an ASC, using cataract outsourcing can eliminate the stress and expense of having unused inventory and equipment.
3. Physician-preference flexibility. If your ASC employs several ophthalmologists or is considering bringing in several physicians to perform cataract cases, keeping them all happy with the right equipment they desire can certainly prove challenging (and expensive). With cataract outsourcing services, you tell the company what your physicians want and it’s delivered, although there still are benefits to standardization even with the service.
"We work with a facility to determine how standardization between doctors can save money; but if the physicians have their own preference, we work with that as well," Ms. Deters says. "We are able to address the needs of multiple equipment and disposable requirements."
4. Latest technology. A physician may request, and expect, to use new technology for their cases, which can be frustrating for a center that has invested significantly in what the physician now views as outdated equipment. To keep their clients pleased with their services and meet their needs, cataract outsourcing companies will stay abreast of and stock the latest technology.
5. Group purchasing savings. Vantage solicits the services of group purchasing organizations to save money on the bulk equipment and inventory it purchases for its many service locations, enabling case costs to be lower for their clients.
6. "Extra-hand" assistance. Some cataract outsourcing companies train their representatives who deliver the equipment to assist their clients. In Vantage’s case, this trained and certified technician performs a number of tasks, including monitoring the equipment for the doctor during procedures, performing IOL management and helping with room turnover.
"Our technicians are fully trained; they are put through extensive training on equipment and OR procedures," Ms. Deters says.
7. Overall savings. All of the benefits described thus far can add up to savings for an organization. In a recent analysis of a prospective client performing 1,500 cataract cases annually, Ms. Deters calculated that Vantage could save the organization money in the following areas (with estimated additional cost for performing in-house in parentheses):
• soft costs, such as software upgrades, repairs and shipping of disposables and IOLs ($25 to $30 per case);
• capital costs, for the use of phacoemulification equipment (around $25 to $30 per case); and
• labor, in terms of room turnover, equipment monitoring, inventory ordering, and IOL management ($10 to $15 per case).
The fees for Vantage’s services range from $250 to $700 per case, depending on facility and surgeon needs.
8. Cash-flow bonus. Many of the cataract patients you may or already treat are likely insured by Medicare. Since Medicare requires electronic billing, you would likely bill for services rendered the day of or day after the procedure on the Medicare patient. Medicare reimburses within 14 days of filing the claim. If you contracted for Vantage’s services, you gain 15 days of free cash flow, as you would not be required to pay for the service for 30 days.
9. More efficient scheduling. Vantage requires the facility to schedule at least a stated case minimum for the day of surgery. This should not prove difficult for organizations because cataracts are not an emergency procedure and, thus, you can schedule them together and on a day that best suits your organization’s and physician’s schedule. Grouping procedures significantly improves efficiencies in scheduling and staffing, as well as OR utilization, thus improving profitability for the organization.
10. Attract new investors. If you identify a physician — or group of physicians — who would like to perform cataract surgery in your area, you can offer them the use of your ASC to perform their cases while providing the equipment they desire. If this ophthalmologist starts to perform a significant number of procedures and volume builds up, you will have the opportunity to approach this physician to inquire about interest in becoming a new physician-investor.
"Eyes are profitable for our clients," Ms. Deters says. "For facilities that have never performed eye procedures, we’ve been very successful in finding ophthalmologists for such facilities." Partnering with a cataract outsourcing service in this situation may be ideal and can lead to increased cases and profits for such ASCs.
"Our facilities often offer ownership to these ophthalmic users, thus, making it a win-win situation for both the facility and the ophthalmologist," Ms. Deters says.
11. Fully compliant. From a regulatory perspective, you would want your cataract outsourcing services to be fully compliant with the anti-kickback statute, as the physicians at the organization should not have ownership in the company or receive remuneration for using the service.
In addition to being anti-kickback compliant, look for your cataract outsourcing company to address any other regulatory concerns. Vantage, for example, maintains all necessary records for its clients, including documentation necessary to meet Medicare and the Joint Commission requirements, and provides paperwork about its technicians and their training and certifications.
12. Only pay when service is used. Quite simply, you pay for the product and service as only when you use it, and if you don’t use it, you pay nothing. So if a cataract surgery experiment reveals that the procedures would not make a worthwhile addition to a center, there is little harm done — eliminating the risk and fixed costs associated with owning your own equipment, Ms. Deters says.
Developing cataract surgery in-house
While there are numerous benefits to cataract outsourcing services, not all ASCs are jumping at the opportunity to use such a service, including one organization that has worked to develop efficiency and cost-effective practices.
Springhill Surgery Center in North Little Rock, Ark., uses consignment purchasing to manage its IOL inventory and keep expenses low, says Laura Gusewelle, RN, clinical manager for Springhill.
"We don’t pay for them until we use them, and then we immediately turn around and bill for our patients since most of them are Medicare," she says.
The center is profiting by the use of a new technology IOL that’s intended to decrease the reformation of a cataract.
"Medicare actually reimburses us an additional $50 over the cost of the lens, so supply and utilization-wise, I couldn’t see paying someone to do that business for me when it’s really not costing me anything to do it," Ms. Gusewelle says.
The organization has also worked to standardize the practices of its ophthalmologists, which perform approximately 15 cataract procedures per week, Ms. Gusewelle says. The only differences between the physicians are their techniques and preferred instrument technicians. The standardization has allowed the organization to recently purchase a new phacoemulsification machine for $65,000 by knowing in advance that its physicians would both appreciate and use it.
"We did a cost-benefit analysis as to how many cases and what period of time it would take to pay for the purchase of that machine, which we were able to capitalize as equipment on our budget anyway," Ms. Gusewelle says.
She recognizes the fact that not all organizations are in a position to invest in such significant capital, and the cataract outsourcing services would be an appealing option.
"Maybe some places don’t have the volume that we have to be able to finance that phacoemulsification machine, but for us it was a good business decision," she says.
Ms. Deters recognizes that, for some centers, the benefits of cataract outsourcing services may not be as evident. But she feels confident that the service can offer great benefits which would make it worthwhile for any organization when considering all costs.
"Even at the higher volume, we can find savings in soft costs and equipment and often still come in lower than what they can do in-house," Ms. Deters says.
Contact Rob Kurtz at rob@beckersasc.com.
