Corporate eye surgery centers are growing in Europe

Market Scope

U.S.-style corporate eye surgery centers -- with multiple locations, glitzy logos and generous advertising budgets -- are becoming a common sight in Western European countries such as the United Kingdom , Germany and Spain .

But it is not clear whether this growing phenomenon can succeed on a continent with stagnating eye surgery demand, an entrenched tradition of single-site clinics and -- perhaps most important of all -- draconian restrictions on advertising and marketing.

“The chains are certainly trying to expand, but we'll have to see if they succeed," says Birgit Kott , assistant group leader for ophthalmology at WaveLight Laser Technologie AG, in Erlangen , Germany , which sells equipment to the clinics. (WaveLight is also a partner with eye surgeons in RealEyes, a new two-location corporate eye surgery center in Germany.)

Kott and others say European refractive surgery clinics, whether solo of corporate, tend to be staffed by surgeons moonlighting from jobs in their countries' national health systems, which do not cover such procedures. These surgeons often work at more than one clinic. They often run the solo clinics as well as some of the corporate centers.

Kott adds that when European eye surgeons form chains, they are sometimes just loose federations, with each clinic retaining financial independence. “ A chain could be a network of self-standing clinics, " she says. “ These clinics use the name and to some extent the know-how of the head office. "

Facing heavy advertising restrictions

Kott says advertising and marketing are an important tool for corporate centers to gain the upper hand over solo clinics, which rarely advertise. “C hains have the potential advantage to lower costs by sharing marketing, " she says.

A few European countries, such as Spain , allow the centers a great deal of freedom to advertise.

“The Spanish government does not restrict advertising for eye surgery,” says Eduardo Baviera, operator of Clinica Baviera, a corporate center based in Barcelona with 15 locations in Spain . The company competes with several Spanish chains, including Institut Oftalmologic de Barcelona, with five locations.

“Advertising does help a lot to attract more patients, " Baviera reports, “although the best thing is word to mouth.”

But in most of the rest of western Europe, medical advertising is very tightly monitored, taking away a key advantage for corporate laser centers. Countries such as Italy , France and Belgium allow very little to be said about a laser surgery clinic in an ad and, not surprisingly, they have very few corporate laser centers.

Francesco Carones M.D., a physician at the single-location Carones Ophthalmology Center in Milan , Italy , states flatly that “Advertising is not permitted in Italy .”

In Belgium , “advertising is allowed but not in the commercial sense,” says Marie-José Tassignon M.D., a laser surgeon at the University of Antwerp . “The only ads that are allowed provide just information about the techniques used in the center.”

The United Kingdom and Germany also impose significant advertising restrictions, but they each have several chains of corporate eye centers. The U.K. has five chains and Germany has four, according to a web search.

In Germany , Europe's largest market, “advertising is only conditionally allowed,” says Joerg M. Hassel, secretary of the Association of Specialty Clinics in Germany for Eye Laser and Refractive Surgery. The group, known by its German acronym, VSDAR, represents 10 clinics, some of which are members of chains .

Though German centers do run some ads, they only “explain the clinic or provide information,” Hassel says. “There can be no promises of a cure, no ‘before and after.' You can't show someone in a white exam coat or surgery scrubs. No hyperbole, no undefined foreign words, no comparisons.”

In the U.K. , the government's Advertising Standards Authority has ordered four of the country's five chains to withdraw ads in the past three years, citing claims in the ads that violated the British Advertising Code, The Times of London reports.

For example, on its Web site, the ASA reports it ruled that one chain – Maxivision, now owned by Optical Express -- misled consumers by claiming that patients who received LASIK treatment could usually return to work the next day and that they would be readmitted to the clinic at no extra cost if they developed complications.

Battling for survival in a tough market

Despite advertising restrictions, British and German chains continue to add sites.

For example, VisuMed, one of the few publicly traded eye surgery chains in Europe, based in Germany , opened new locations in 2003 and in this year, for a current total of eight locations. VisuMed's Web site reports that it employs more than 80 surgeons, who have performed 35,000 laser eye operations, though apparently not all at VisuMed clinics.

But the German chains still face a tough challenge from the solo clinics, reports Hassel, who, in addition to being secretary for the German trade group, is also CEO of the solo ALZ Eye Clinik in Munich . Hassel says the solo clinics have been opening clinics at a faster rate than the chains.

The growth in providers only increases the pressure to survive in a stagnant European eye surgery market, where people are much more wary of eye surgery than in the United States . Visumed reports that 35,000 Germans have eye surgery each year, compared with about 1 million Americans. The eye surgery rate in the UK has been estimated at 30,000 a year. According to a poll at the University of Warwick , 73% of Britons think eye surgery is too expensive, 37% think it too risky and 52% did not like the idea of surgery on their eyes.

Also, European eye centers appear to pass a higher proportion of their income to their eye surgeons than in the United States . Hassel maintains that German eye surgeons wouldn't stand for chains that “take the work of surgeons on the cheap, as they do in America .”

A new survival tactic

Recently, British and German corporate eye centers have been trying out a new survival tactic – teaming up with eyeglasses stores, which then recommend customers to the eye centers.

For example, Boots Group, the huge British drugstore chain, which runs 300 optical shops, recently entered the eye surgery business and now has nine clinics. On its web site, Boots has been offering customers interest-free loans and a 24-month payment plan.

Optical Express, a Scottish-owned company that runs 165 optical stores, recently acquired some eye surgery clinics. In 2003, Optical Express bought Maxivision, which operated 22 eye surgery clinics with more than 7.7 million pounds in sales a year, according to the Sunday Times.

In Germany , VisuMed reports it has signed agreements with five regional optical chains. The company would not detail the agreements, but Ärzte Zeitung , the German medical newspaper, reports that under one such agreement, with 47-store Binder Optik, opticians will recommend VisuMed to their near-sighted customers .

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