Drop in Lasik eye surgery appears to be a barometer for recession
Call it the Lasik indicator. With the weak economy prompting U.S. consumers to cut back on discretionary spending, laser vision-correction surgeries have been falling, as they did during the last recession.
More than 800,000 Americans underwent Lasik surgery in 2007, a slight increase from 2006. But the numbers started slumping along with the economy in the second half of last year. And industry analysts are now predicting a Lasik recession.
“Were forecasting a 17 percent drop for 2008,” said David Harmon, president of Market Scope, an eye surgery market research company.
Harmon said that when first-quarter data became available next month, he expected the numbers to show an even sharper decline in Lasik surgeries than in 2001. That time around, the sour economy triggered a three-year slump in the laser procedures, which are typically not covered by insurance.
Lasik - for laser-assisted in situ keratomileusis - typically costs $800 to $3,000 or more per eye.
Earlier this year, two main companies in the Lasik business - Advanced Medical Optics, a leading maker of laser surgery equipment, and LCA-Vision, which owns a chain of laser surgery centers - warned of a market slowdown.
Besides the economic challenge, the industry is contending with a small but growing number of complaints about the results of Lasik procedures - an issue to be discussed at a federal regulatory hearing on Friday.
Harmons forecast is based on the relatively strong correlation in recent years between Lasik procedures and the Conference Boards index of consumer confidence in the economy.
Doctors and analysts said a wide range of elective medical procedures, including breast implants and skin treatments like Botox injections, are also being affected.
“People are just being a little more conservative about their finances,” said Dr. Robert Cykiert, a New York ophthalmologist who does both eye surgery and Botox injections.
In the case of Botox, for example, Cykierts existing patients are not spacing out their periodic treatments, he said, but some who are interested in Botox have been hesitant to start treatments.
So far, though, Lasik procedures are the most measurably affected.
Advanced Medical Optics, which gets more than one-third of its revenue from laser surgery systems and related gear, cut sales and earnings forecasts for the year in February, saying then that it expected a 10 percent drop in procedures in 2008. Its stock, which closed on Wednesday at $20.16, is down more than 13 percent since the February warning.
The same month, LCA-Vision, the surgery center owner, said it had cut its work force by 16 percent in anticipation of slowing business. Shares of LCA-Vision closed on Wednesday at $12.28, down more than 75 percent since last July. The stock of a competitor, TLC Vision, closed at $1.26, down more than 79 percent from a peak of $6.10 last May.
Lawrence Biegelsen, a medical device analyst for Wachovia Capital Markets, said that Advanced Medical Optics stock could be hit again as complaints by Lasik patients are voiced at the Friday hearing by the Food and Drug Administrations advisory panel on ophthalmic devices.
Federal regulators have received reports about Lasik patients with dry eyes, double vision and distorted night vision, among other problems.
And various Web sites like www.lasik-flap.com and www.lasermyeye.org/forums/index.php carry sobering tales of more serious eye damage or cases where vision improvements seemed to disappear within a few years.
The FDA is asking the panel for advice on ways to get more doctors, patients and hospitals to report problems stemming from laser surgery or lens implants. One goal cited in documents the agency released on Wednesday is to gather more Lasik data through SightNet, an online network of ophthalmologists who are voluntarily linked to the agencys Medical Product Safety Network.
Lasik involves cutting a flap in the surface of the cornea to gain access to the central portion of the eyes natural lens, which is then reshaped by the laser. Lasik can reduce or in many cases eliminate nearsightedness, far-sightedness and astigmatism.
Lasik practitioners say a recent analysis of past studies showed 95 percent satisfaction rates. But with 12 million patients having undergone the procedure in the United States since it was approved in 1995, the sheer number of individuals with unhappy outcomes is growing steadily. And more of their stories are gaining public attention.
“My eyes are damaged beyond repair,” Pamela Barncastle, 62, of Albuquerque, New Mexico, said in a telephone interview. Barncastle said she underwent the surgery in 2001 but now suffers double vision, as well as seeing halos and bursts of blurred light at night that prevent her from driving after sundown.
