Medical Model

Making Glaucoma Diagnosis and Treatment a Specialty


By ROB Editors

An estimated 4 million Americans have glaucoma, but only 2 million have been diagnosed. As eyecare professionals, we need to do a better job of detecting and treating this sight-stealing condition. If we succeed at this, we can better serve patient needs while capturing significant practice growth.

However, getting into this area of the medical model requires a major capital outlay to acquire adequate instrumentation to help in diagnosing and treating glaucoma patients. Especially costly is new cutting-edge equipment that allows us to examine the eye including the retina and optic nerve with remarkably improved detail. Your financial decision on whether or not to embrace glaucoma diagnosis and treatment in your practice hinges on one critical question: Are you seeing enough glaucoma patients to justify the lease or loan payments necessary to acquire proper instrumentation?

Calculate Your Investment
Count the number of glaucoma patients you see in a typical month. Now calculate the income received from these patients for each glaucoma-related procedure. How many of these procedures did you send out of your office to another doctor? If you had kept these patients in your office, would you have met the lease or loan payments for the necessary equipment? Again, it comes down to the numbers: Are you are seeing enough glaucoma patients to justify acquiring the instrumentation?

Most equipment used for diagnosing glaucoma is also used for other patients. For example, one equipment manufacturer shows that if you have 50-60 patients a week, or 240 patients a month, with glaucoma, retina, and posterior photo work being done, you can be billing a total of $4,396 for 50 patients. If monthly lease payments are $1,400, then monthly net revenues would be just under $3,000.

Tax Advantages Make Everything More Affordable
The next critical question: Are you getting into this at the high end or low end? For example, you can get OCTs that are priced anywhere from $50,000 to $80,000, and if you invest in a unit with a lot of additional features, you can be looking at a total of $100,000.

Equipment Cost Example: $300,000
Section 179 Write Off
($250K is maximum Section 179 write-off in 2010)
$250,000
Regular First-Year Depreciation
(Calculated at 5 years = 20%)
($300K minus $250K) x 20% = $10K
$10,000
Total First-Year Depreciation
$250K + $10K = $260K
$260,000
Tax Savings Assuming Rate of 35%
($260K x 0.35 = $91K)
$91,000
First-Year Net Cost after Tax Savings
($300K minus $91K = $209K)
$209,000

While this might seem like a lot of money for one instrument, it can be used for diagnoses beyond glaucoma. Manufacturers are able to offer optometrists financing plans and trade-ins. There are also tax incentives. In 2010 only, small businesses can write off up to $250,000 for capital expenditures. In 2011, it will be cut back to $25,000.

The higher-end instrumentation offers better imaging and the ability to capture images at different angles. A $21,000 nonmydriatic retinal camera will offer a resolution of 8 megapixels while a $27,000 model offers 12.3 megapixels with nine fixation points to direct the patients’ gaze to the part of the eye that needs to be documented. Investing $69,000 in a spectral-domain OCTprovides even more diagnostics and has the nonmydriatic camera built into it. Time-domain OCTs are still available, even though it is older technology with fewer options.

Make a Payment Plan
The next calculation is how to best pay for enhanced (and expensive) instrumentation. Financing terms often are available from manufacturers, but that is not always the best way to go. Manufacturers often refer financing to leasing companies, which adds another middleman to the equation. In contrast, an equipment loan can be had at 5.99 percent over five years. In some cases, that loan can be reduced to 3.99 percent or less with contributions from manufacturers or distributors.

Take the case of an OCT at $60,000:, the true cost of purchase could be the list price plus $17,970 at 5.99 percent over five years–or just $11,970 if that rate can be dropped to 3.99 percent. Can you think of something you could do with the $6,000 savings?

Clearly, this is worth discussing with your sales representative. One manufacturer has found that 80 percent of ODs choose a lease with an option to buy. Leases tend to run three years and are offered by financing companies that understand what optometrists need and why they are buying this equipment, unlike walking into a bank.

Financing companies, such as Integrity Medical Capital, tailor financing packages based on how much equipment the doctor is leasing. You are not just stuck with the equipment vendor, financing company or bank for financing. Manufacturers may offer better financing and deferred payment plans as incentives.

The other 20 percent of ODs either pool funds together, buy instrumentation outright, or get loans on their own.

Dealers will also work with doctors who have older equipment and help them trade up into new technology.

Trade-in prices are based on the condition and age of the equipment–just like trading in a car. Companies that offer trade-ins will pick up the equipment, retrieve any data stored on it, and take old equipment away for you.

Calculating ROI

How long does it take for new equipment to pay for itself? It depends on a number of factors. If you see a lot of glaucoma patients, are billing procedures via insurance, have good financing, and have a good tax write-off, you may see a return on your investment immediately.

Manufacturers also provide doctors with ROI worksheets and billing and coding information. For example, if the scanning laser code 92135 (Scanning computerized ophthalmic diagnostic imaging, posterior segment, with interpretation and report, unilateral) is used to bill Medicare for two eyes for glaucoma diagnostics, you may be reimbursed $86.

The average practice is going to see about 2100 to 2200 patients per year per doctor. The prevalence of glaucoma is about 4 million people in the US. There are 300 million people in the U.S., so the percentage of people with glaucoma in a practice is 4/300 = 1.3% That means, the average practice will have at least 1.3% x 2200 = 29 total glaucoma patients. With an emphasis on glaucoma in your practice, your numbers will be much higher.

Glaucoma: How Many Are Affected?

More than 4 millionAmericans have glaucoma, though only half know they do,according to Prevent Blindness America. That’s roughly one in 75 people. Do the math on your patient base to get a sense of the potential. Some people are more susceptible than others. Diabetics have glaucoma at elevated levels. African-Americans are six to eight times more likely to have glaucoma than Caucasians, according to “African Descent and Glaucoma Evaluation Study” published in 2009.Each year there are seven million visits to physicians related to glaucoma, according to Prevent Blindness America.

Top of the Google Search:What Consumers Are Hearing

Consumer awareness of glaucoma is growing–and consumers are being told to see their eye doctorand be tested for it early and frequently.The Glaucoma Research Foundation (www.glaucoma.org) recommends testing for glaucoma begin before age 40, with tests every two to four years. The recommended frequency steps up to every one to three years for those aged 40 to 54, then every one to two years for those 55 to 64.After age65, testing every six to 12 months is recommended.The foundation recommends tonometry to measure pressure, ophthalmoscopy to examine the inside of the eye, as well as perimetry for visual field and gonioscopy to look for open- or closed-angle glaucoma.

And from Wikipedia: Glaucoma is a disease in which the optic nerve is damaged, leading to progressive, irreversible loss of vision. It is often, but not always, associated with increased pressure of the fluid in the eye…. Untreated glaucoma leads to permanent damage of the optic nerve and resultant visual field loss, which can progress to blindness. (http://en.wikipedia.org/wiki/Glaucoma)

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