Ophthalmology Business

SEP 2015

Ophthalmology Business is focused on business topics relevant to the entrepreneurial ophthalmologist. It offers editorial, opinion, and practical tips for physicians running an ophthalmic practice. It is a companion publication of EyeWorld.

Issue link: http://digital.ophthalmologybusiness.org/i/565757

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Page 25 of 27

26 Ophthalmology Business • September 2015 • A doctor is starting a satellite location and the facility doesn't have the necessary equipment to perform cataract surgery. • A multispecialty ASC wants to add ophthalmology to its offerings, but the reimbursements are lower than for other specialty surgeries. To overcome this hurdle, they need eye procedures to be performed efficiently. Certified technicians through an outsourcing company can improve efficiency and room turnover, allowing the surgeon to perform more procedures per hour and be more profitable. Cost comparison: Purchasing vs. outsourcing of one phaco machine Typical costs for a phaco machine, surgical microscope, and 5 instrument sets and supplies, plus the cost of a surgical technician. Purchasing equipment* Outsourcing equipment* Revenue Medicare reimbursement $950 at ASC $1,750 at hospital $950 at ASC $1,750 at hospital Expenses Capital costs for medical practice: Phaco machine and microscope Finance charges (5 years at 4% interest) Service contract (5 years) Instruments (for 5 years) Technician, training, benefits Dedicated space cost Per procedure costs: –Disposables and implants $130,000 $ 13,650 $ 60,000 $ 15,000 TBD TBD $218,650+ $ 350 All covered for approximately $450–$650 per procedure. Can vary depending on volume, cases per visit, type of lens, and surgeon's equipment preferences. Gross profit Based on patient volume. May not be profitable for years. Generates about $300–$500 per procedure at an ASC, $1,100–$1,300 at a hospital. Mr. Francis is president of Surgical Direct, a provider of mobile ophthalmic equipment and services. He can be contacted at Kevin@ surgicaldirectinc.com. *Figures are estimated based on average industry costs. The Medicare reimbursement rates reflect an average of 2015 rates, which vary by region. Source: Surgical Direct Inc. Consider all costs It's important to consider all costs before making a decision on whether to purchase or outsource. The table breaks down estimated costs for a single phacoemulsification machine and the accompanying equipment and supplies needed for cataract surgery. As you can see, many factors play into making a decision about outsourcing versus purchasing. A lot will depend on the number of cases you and your partners handle, how long you expect to use a particular machine, and how much flexibility you want in being able to access multiple brands and the newest technology. The bottom line? Make sure you've looked at all the costs and considered the big picture before making a decision. You will feel more confident knowing you've taken the time to truly understand your options. OB continued from page 25

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