Research finds huge variations in charges related to cataract surgery

A new study has found huge variations in what ophthalmologists charge for a device used in cataract surgery - one of the most common surgeries in Ontario.

While universal insurance covers the cost of cataract surgery and implanting an artificial lens, some ophthalmologists charge extra for implanting a special lens deemed not “medically necessary” or for related tests. This includes lenses that correct refractive issues such as farsightedness.

Those “add-on” fees varied substantially, with some ophthalmologists charging eight times as much as others for the same product, said Dr. Chaim Bell, an assistant professor in the Department of Medicine and the Institute of Health Policy, Management and Evaluation (IHPME) at the University of Toronto and a physician and researcher at St. Michael’s Hospital.

Bell, who received his MD from U of T and completed his specialty training in Internal Medicine at the University of Toronto, was a Visiting Fellow in Medical Economics and Cost-Effectiveness Analysis at the Harvard School of Public Health and received his PhD in Clinical Epidemiology and Health Services Research from the University of Toronto. He has authored several publications examining the quality and methodology of cost-effectiveness analyses and how they should be incorporated into health policy decisions.

His results were published today in the peer-reviewed open-access journal PloS One.

The study, which had an 88 per cent response rate from eligible ophthalmologists and 100 per cent from those who would discuss prices by phone, found a majority of cataract surgeons charged less than the maximum $1,144 recommended by the Canadian Ophthalmological Society for a toric IOL (intraocular lens) with IOLMaster biometry (measuring eyesight post-surgery).

But some charged more than $1,000 above what could be considered reasonable or fair -- which may represent “predatory pricing” and a “market failure,” Bell said.

This is of particular importance because the overhead costs of cataract surgery are universally covered by a government payer and those surgeons who set prices at the high end of the range may earn more from the added charges associated with specialty lenses than from performing the operation itself.

One implication of the study is that patients should do comparison shopping and recognize that certain charges associated with surgery may be “marked up” for profit and not cost recovery, Bell said, adding this isn't easy, because some cataract surgeons would not discuss prices over the phone.

“Given the large price variation we observed, it would seem the market for specialty lenses is a striking example of the difference between classical and medical economics,” said Bell.

The research has implications for policymakers, Bell said.

“We have identified highly variable pricing for similar and often identical products and services,” he said. “Potential solutions to protect that patient as consumer in this context would involve making the prices publicly available or regulating prices through a third party such as a publicly funded hospital or through legislation.”