2. Shrinking
margins
Insurers were
always reluctant to
cover back proce-
dures that cost twice
as much as more
conventional
approaches, but for
years the company's
business boomed.
Patients came from
all over and paid cash up front. The minimally invasive laser approach
provided the sexy selling point to patients who were willing to pay
thousands out of pocket after years of debilitating pain.
"There exists and always will exist that population that wants
world-class, Ritz-Carlton-type of experience, and they are willing and
able to pay for that experience," says Dr. Gari. "LSI provided that for a
lot of for patients."
Soon, however, Laser Spine's margins shrunk. Competition heated
up, as more surgeons were performing laser spine procedures. And
Laser Spine had no choice but to transition from a strict cash-based
model to mostly an insurance-based one.
"Instead of being a cash business, we had a lot of accounts receiv-
able. Cash flow changed dramatically and became much less reliable
as we were relying on insurance payments, which took a few weeks
to months or longer to come in," says the former employee, adding
that many insurers denied claims or paid only a portion of billed
charges. "We would bill Medicare and just accept whatever they paid.
Our appeal process wasn't efficient. Our average cash pay went from
A P R I L 2 0 1 9 • O U T PA T I E N T S U R G E R Y. N E T • 3 9
• UNPROVEN Competing surgeons viewed laser spine surgery as little more than a
marketing gimmick.
