MARKET DRIVERS IN OPHTHALMOLOGY
P t d bP t d b
OPHTHALMOLOGY
Presented by:Presented by:Michael Driscoll, OCSMichael Driscoll, OCS
All E C B i Ad iAll E C B i Ad iAllergan Eye Care Business AdvisorAllergan Eye Care Business Advisor
Session Overview
Discuss key market drivers
Offer historical perspectives on health care reform
Discuss potential impact of ACOs on the h h l l iophthalmology practice
Present Reputation Management Principle
Key Market Drivers
Demographic shift andDemographic shift andimpact on prevalence of
eye disease.
Ophthalmology Ophthalmology Availability of new drugsand devicesp gyp gy and devices.
Patient Protection and AffordablePatient Protection and Affordable Care Act (PPACA), Medicare
Shared Savings Program, etc.
Forecast of Population by Age (in Thousands)
20102010 20152015 2020202020002000
00 -- 4444 189 025 194 792 202 226184 6240 0 4444 189,025 194,792 202,226184,624
45 45 -- 6464 80,890 83,911 84,35662,440
65 +65 + 40,229 46,837 54,80435,06165 +65 + 40,229 46,837 54,80435,061
TOTALTOTAL 310,234310,234 325,540325,540 341,386341,386282,125282,125
Source: US Census Bureau, Population Division, Interim State Projections of Population.
Increasing Need for Delivery of Services
Shortage of ophthalmic providers creates opportunityfor optometrists to pro ide greater role in deli er of ser icesfor optometrists to provide greater role in delivery of services.
Source: DHHS Physician Supply and Demand Projections to 2020
Growing Demand
Demographic trends will drive increase in prevalence of eye disease.
200,000 Americans develop advanced AMD each year; expected to double by 2020.(1)
Cataract affects 1 in 6 people over age 40(2); 30 1 million AmericansCataract affects 1 in 6 people over age 40(2); 30.1 million Americans expected to have cataracts by 2020 (47% increase over 2004).(1)
Growing levels of obesity lead to increase in diabetic retinopathy; currently 4 1 million over age 40 affected projected 7 2 million bycurrently 4.1 million over age 40 affected, projected 7.2 million by 2020.(1)
Glaucoma accounts for over 7 million visits to MDs each year with a potential increase of more than 60% by 2020 (2)potential increase of more than 60% by 2020.(2)
Blindness or Low Vision affects 1 in 28 Americans over the age of 40; 5.5 million Americans are expected to be affected by blindness or low vision by 2020 (3)vision by 2020.(3)
1) “Vision Impairment and Eye Disease is a Major Public Health Problem,” National Alliance for Eye and Vision Research & National Eye Institute.
2) “Vision Problems in the U.S.,” Prevent Blindness America and National Eye Institute.3) Source: National Eye Institute, 2004 Study.
Incidence Rates in Americans Age 40+
Eye Disease Prevalence and Projections(Adults 40 Years and Older)
30
35 30.1
(Adults 40 Years and Older)
47%
Milli
ons
15
20
25
30
20.5
75%67%In
5
10
15
1.8 2.24.1 3.32.9 3.3
7.25.561% 50%
67%
0Advanced AMD
(1)Glaucoma Diabetic
RetinopathyCataracts Blindness or Low
Vision
2004 Est. 2020(1) An additional 7.3 million are at substantial risk for vision loss from AMD.
Source: National Eye Institute, 2004 Study. The study examined primarily Advanced AMD, Glaucoma, Diabetic Retinopathy, and Cataracts, noting these as the four most common eye diseases in Americans age 40 years and older.
00 st 0 0
Growth in Cataract Volume
4,346,081 4,500,000
2,821,300
3,248,390
3,832,518
3 000 000
3,500,000
4,000,000
on
2,350,000
2,000,000
2,500,000
3,000,000
Pop
ulat
io
500,000
1,000,000
1,500,000
-2000 2005 2010 Est. 2015* Est. 2020*
Totals
* Estimated based on a utilization rate of 3.5 per 1,000 for the population under age 65 and a utilization rate of 61 per 1,000 for the population age 65 and older.
Source: Data per Market Scope, “Ophthalmic Market Perspectives”.
Premium Lens Options
Current AvailableCurrent AvailableTechnology:Technology:
Two multifocal
One accommodatingg
Expected Technologies:Expected Technologies: Additional accommodating
T i l if lToric multifocal
Source: Market Scope: “Ophthalmic Market Perspectives”.
PC-IOL and Toric Trends
251 600
300,000
e
219,612203,427
244,550 251,600
212,916244,800
200,000
250,000
tal V
olum
134,363
162,406169,000
150,000
Tot
44,100
40 000
107,970
50,000
100,000
12,000
40,000
02005 2006 2007 2008 2009 2010 2011
Source: Data per “Ophthalmic Market Perspectives”, Market Scope.
PC-IOL Toric
Cataract Growth in Comparison toPC-IOL and Toric Trends
4,346,081 5 000 000
5,500,000
n
3,248,390
3,832,518
3 500 000
4,000,000
4,500,000
5,000,000
Pop
ulat
ion
2,350,000
2,821,300
2 000 000
2,500,000
3,000,000
3,500,000
P
1,000,000
1,500,000
2,000,000
0
500,000
2000 2005 2010 Est. 2015* Est. 2020*
PC IOL T i T t l* Estimated based on a utilization rate of 3.5 per 1,000 for the population under age 65 and a utilization rate of 61 per 1,000 for the population age 65 and older.
Source: Data per Market Scope, “Ophthalmic Market Perspectives”.
PC-IOL Toric Totals
Companies DevelopingFemtosecond Laser Technologygy
6 6 FemtosecondFemtosecond Platforms:Platforms:
Alcon Inc. / LenSx LensAR, Inc.
Bausch & Lomb andOptiMedica Corp.
Bausch & Lomb and Technolas Perfect Vision
Ziemer Ophthalmic Systems AG Abbott Medical Optics
Assessing the Economic Viabilityof Femtosecond Laser*
$550,00035,000
$585,000
606%
$11,310
$750
$525$225
$850
$525$325
$950
$525$425
$4502550
$525
$209,716 $209,716 $209,716
$135,71640,00010,00014,00010,000
$209,716
932 645 493
$400,000$600,000$800,000
$1,000,000$1,200,000
Femtosecond LaserBreak-Even Analysis Model 1
Revenue $400,000$600,000$800,000
$1,000,000$1,200,000
Femtosecond LaserBreak-Even Analysis Model 2
Revenue $400 000$600,000$800,000
$1,000,000$1,200,000$1,400,000
Femtosecond LaserBreak-Even Analysis Model 3
Re en e$0
$200,000$ ,
0
200
400
600
800
1,00
0
1,20
0
1,40
0
1,60
0
Procedures Per Year
Costs$0
$200,000$ ,
0
200
400
600
800
1,00
0
1,20
0
1,40
0
1,60
0
Procedures Per Year
RevenueCosts
$0$200,000$400,000
0
200
400
600
800
1,00
0
1,20
0
1,40
0
1,60
0
Procedures Per Year
RevenueCosts
* The numbers shown in the example are for demonstration purposes only.
U.S. Refractive ProceduresPerformed Annuallyy
1,600,000
1,200,000
1,400,000
600 000
800,000
1,000,000
200,000
400,000
600,000
02000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: “Ophthalmic Market Perspectives”, Market Scope.
Does the Patient Protection and Affordable Care Act (PPACA) really represent a reform of health care?p
Historical Perspectives
1990’s:Market-based consolidation, fear of loss of patient access, new and innovative contracting models, i.e. IPAs, PHOs, IDNs, etc.models, i.e. IPAs, PHOs, IDNs, etc.
Growth in Medicare Advantage
2000’s:
Growth in Medicare Advantage plans, increase in Federal subsidies, consumer push for provider h i f f i d lchoice, fee-for-service payment model
adopted by most plans and payers.
What’s different now?
Impact of recession
Economic Constraints:
Challenges to federal and state budgets
Impact of baby boomersImpact of baby boomers
Increasing cost of health care
LegislativePatient Protection and Affordable Care Act Legislative
Initiatives:(PPACA), Medicare Shared Savings Program (MSSP)
Are Accountable Care Organizations a concern for
Ophthalmology?Ophthalmology?
What is an Accountable Care Organization? (ACO)( )
An ACO is a network of doctors and hospitals that
share responsibility for
Analogous to a T.V. manufacturer that contracts
ith li t b ild tshare responsibility for patient care. with suppliers to build sets.
The challenge is to prove that the overall health careACOs are designed that the overall health care
product works betterand costs less.
under the framework of the MSSP.
Why were ACOs included in the PPACA?
Medicare is a prime target in deficit reduction efforts.
Due to baby boomers coming of age, Medicare costs t d t i th i d dare expected to soar in the coming decades.
ACOs are being designed to “test” if sharing of health care information and resources while also focusing on
ti lit t d d lt i t imeeting quality standards can result in cost savings.
How will an ACO work?
ACOs will be formed by providers (hospitals and i t t d d li t t lik l )integrated delivery systems most likely groups).
Medicare beneficiaries will be assigned to an ACO based on who their doctor isACO based on who their doctor is.
If the doctor is part of an ACO, that patient will be automatically included.
Patients can choose to opt out.
Patients are free to see any provider (in or out of the ACO).
ACOs will be measured based on 33 qualityACOs will be measured based on 33 quality performance indicators.
These Indicators Will Fall WithinSeveral Broad Categories:g
PatientCare Giver Patient
At Risk Population / Frail ElderlyCare Giver
Experience Safety Frail Elderly Health
Considerations
Coordination of Care Preventive
HealthStandards Health
Other Considerations
Specialists can join any number of ACOs;Specialists can join any number of ACOs; however, primary care providers can only join one.
Fee-for-service will still be used (for now); however, financial incentives will be provided for keeping costs down and keeping patients healthy.
Although ACOs are being formed to contract withAlthough ACOs are being formed to contract with Medicare beneficiaries, many will use to contract with private payers.y
So what does all of thisSo what does all of thismean to you?
What are the implications forOphthalmology?p gy
It is hard to know
Impact will be market specific
Large integrated systems more likely to succeed
Ophthalmologists will seek out what are perceived asOphthalmologists will seek out what are perceived as more sustainable practice models
Shared savings payment models are likely a precursorShared savings payment models are likely a precursor to risk-based reimbursement
New reimbursement models are already in playNew reimbursement models are already in play between a number of health plans and providers
Reputation Management
Monitoring what is being said about you and your practice online, to guard against the negative as well as build the positive brand of the practice.
What is it?
Negative comments are a reality and often become more prevalent with time.
Why is it important?
Consumers generally trust online reviews.1
Provides an opportunity to correct untruths and
important?
Provides an opportunity to correct untruths and calmly respond to negative feedback.
Help shape the conversations that people are h i b t tihaving about your practice.
1http://blog.nielsen.com/nielsenwire/consumer/global-advertising-consumers-trust-real-friends-and-virtual-strangers-the-most
Reputation Management
What does itWhat does itlook like?
Reviews for two seafood restaurants in Cancun, as posted
t i d ion www.tripadvisor.com
or
Reputation Management
C t t it iWhat does it Constant monitoring.
Ability to handle negative reviews and contact review sites in a calm and professional
What does it require?
e e s tes a ca a d p o ess o amanner.
Ability to use good judgment when responding t b th iti d ti ito both positive and negative reviews.
Development of set policies and procedures for your practice staff regarding how to handlefor your practice staff regarding how to handle inflammatory reviews.
Processes for encouraging happy patients to post their reviews.
Reputation Management
Simple is best…How p
Google Alerts− Physician name
do I begin tracking online?
− Name of practice
− Top key words for practice
Competitors’ names− Competitors names
− Alerts are not only used for negative reviews, but can also be used proactively to check up on relative standing in community (blogs, onlinerelative standing in community (blogs, online articles, local publication).
Weekly Google, Yahoo, and Bing searches− Same process but more time intensive, will give
more comprehensive results
Google Alerts Sample
Google Search Example
Once you are tracking…
…begin responding to bothpositive and negative reviews!positive and negative reviews!
Handling Reviews
Be objective. How do I d t Research the complaint.
− Is there any truth to what has been written?
If it b b t t d t th t
respond to negative,
but accurate If so, it may be best to respond to the post. − Recognize the patient as important with valid
concerns.
reviews?
Thank them for bringing this information to light. Reassure the community that the issue is being addressed.
Reach out to the offended patient personally, to rectify.
Take care to not violate any patient Take care to not violate any patient privacy laws!privacy laws!
Handling Reviews
Understand the policy of the review site. How do I d t
y− What is their protocol for handling these
situations?
F ll t l l i th t th i i t
respond to inflammatory
and malicious Follow protocol, explain that the review is not representative of your practice and you believe this comes from an ex-employee or a competitive threat
reviews?
competitive threat.
Allow the review site time to research the complaint.
As needed (and as a last option) get an attorney involved.
Take care to not violate any patient Take care to not violate any patient privacy laws!privacy laws!
General Reputation ManagementDos and Don’ts
Be proactive, build your website and have it f ll ti i d C h ld fi dD fully optimized. Consumers should find you here first!
Encourage happy patients to post constructive
Dos
g ppy p pcomments to help other patients.
Manage/track online reputation.
Claim your review sites.
Integrate social media/review sites into your b itwebsite.
Engage in social media, direct the conversation.
Respond to positive posts as well as negative!
General Reputation ManagementDos and Don’ts
Do not get nasty or threaten a web review company.D ’t company.− You want to partner with them to fix any false
posts; you want them on your side.
D t t ti ll t ti i
Don’ts
Do not react emotionally to negative reviews: consider them objectively and determine what action (if any) should be taken prior to responding.p g
Do not reveal any patient health or privacy information.
Do not, under any circumstances, write your own reviews on review sites, pose at patients, or transcribe patient testimonials into the sitethe site.− Google knows who you are! − Remember “Lifestyle Lift”?
$300,000 Fine - OUCH!
Final Thoughts
Insurance companies will be “ahead of the curve” in anticipating changing market dynamics
Market forces may cause a “subtle shift in power” from payers to providersfrom payers to providers
Market consolidation will accelerate among allMarket consolidation will accelerate among all stakeholders
Thank you!
© 2012, Allergan, Inc., Irvine, CA 92612 marks owned by Allergan, Inc.APC52JR13
