U.S. SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC  20549
                           Form  10-QSB

(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
      THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 1999.

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
      THE SECURITIES EXCHANGE ACT.

For the transition period from __________ to __________

Commission file number 0-27610

                       LCA-Vision Inc.
                       ---------------

           (Exact name of small business issuer as
                  specified in its charter)

Delaware                                  11-2882328
(State or other jurisdiction of           (IRS Employer
incorporation or organization)            Identification No.)

   7840 Montgomery Road, Cincinnati, Ohio  45236
   ---------------------------------------------
    (Address of principal executive offices)

   (513) 792-9292
   ---------------------------------------------
    (Issuer's telephone number)


              (Former name, former address and formal
             fiscal year, if changes since last report.)

Check whether then issuer (1) filed all reports required to be
filed by Section 3 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to filing
requirements for the past 90 days.

Yes    X                 No
     -----                   -----

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
50,699,512 shares as of July 26, 1999.

Transitional Small Business Disclosure Format (check one):

Yes                      No   X
      ----                  -----
<PAGE>
                         LCA-VISION INC.
                              INDEX


                                                      Page No.

Facing Sheet                                              1

Index                                                     2

Part I.        Financial Information

     Item 1.          Financial Statements

          Condensed Consolidated Balance Sheets at        3
          June 30, 1999 (unaudited) and at
          December 31, 1998 (audited)

          Unaudited Condensed Consolidated Statements     4
          of Operations for the Three and Six Months
          Ended June 30, 1999 and 1998

          Unaudited Condensed Consolidated Statements     5
          of Cash Flows for the Six Months Ended
          June 30, 1999 and 1998

          Notes to Unaudited Condensed Consolidated       6
          Financial Statements

     Item 2.          Management's Discussion and        11
                      Analysis of Financial Condition
                      and Results of Operations




Part II.          Other Information                      16

     Item 1.           Legal Proceedings

     Item 2.           Changes in Securities

     Item 3.           Defaults upon Senior Securities

     Item 4.           Submission of Matters to a Vote
                       of Security Holders

     Item 5.           Other Information

     Item 6.           Exhibits and Reports on Form 8-K


Signatures                                               18

                        LCA-VISION INC.
             Condensed Consolidated Balance Sheet
                June 30, 1999 (unaudited) and
                 December 31, 1998 (audited)

<TABLE>

                               in thousands, except per share data

                                     June 30,  June 30,  Dec. 31,
                                       1999      1999      1998
                                    proforma
<S>                                  <C>       <C>       <C>
Assets
Current assets:
     Cash and cash equivalents       $46,443   $  9,029  $  6,496

     Certificate of deposit            2,100      2,100
     Accounts receivable, net          2,681      2,681     1,119

     Prepaid expenses, inventory
     and other                         1,419      1,533     1,416
                                      ------    -------   -------
Total current assets                  52,643     15,343     9,031

Property and equipment, net            8,709      8,709     9,433
Goodwill, net                          8,178      8,178     8,304
Obligations due from shareholders, net   261        261       471
Investment in unconsolidated
  businesses                             979        979       520
Certificate of deposit                   - -        - -     2,100
Other assets                           1,015      1,015     1,518
                                      ------    -------   -------

Total assets                         $71,785    $34,485   $31,377
                                      ------    -------   -------
                                      ------    -------   -------

Liabilities and Shareholders'
  Investment
Current liabilities
     Accounts payable                 $2,174     $2,174   $ 2,030
     Accrued liabilities and
      other                            2,814      2,814     2,637
     Debt maturing in one year           627        627       787
                                      ------    -------   -------


Total current liabilities              5,615      5,615     5,454


Long-term debt                           496        496     2,724

Commitments and contingencies

Shareholders' investment

     Preferred stock                   2,522      2,522     7,687

     Common stock ($0.001 par
       value; 45,539 shares and
       40,974 shares issued (50,539
       proforma))                        113        108       103

     Contributed capital              85,439     48,144    41,701

     Accumulated (deficit)           (21,940)   (21,940)  (25,664)

     Foreign currency translation
       adjustment                         17         17       (14)

     Less common stock in treasury
       at cost                            30         30        30
     Less accrued preferred stock
       dividend                          447        447       584
                                      ------    -------   -------
                                      65,674     28,374    23,199
Total liabilities and shareholders'
  investment                         $71,785    $34,485  $ 31,377
                                      ------    -------   -------
                                      ------    -------   -------

The Notes to Condensed Consolidated Financial Statements are an
integral part of this statement.

</TABLE>



<PAGE>
                         LCA-VISION INC.
         Condensed Consolidated Statements of Operations
     for the Three and Six Months Ended June 30, 1999 and 1998
                           (unaudited)

<TABLE>
                               in thousands, except per share data

                            Three Months Ended    Six Months Ended
                                June 30,                June 30,
                              1999      1998       1999    1998
                              ----      ----       ----    ----
<S>                         <C>        <C>      <C>      <C>
Revenues:
  Laser refractive surgery  $14,346    $8,290   $27,735  $14,736
  Other                         384       729       862    1,492
                             ------     -----    ------   ------
Total revenues               14,730     9,019    28,597   16,228

Operating costs and expenses:
  Medical professional and
    license fees              6,186     3,537    12,201    6,193
  Direct costs of services    2,732     2,644     5,288    5,463
  General and administrative
    expenses                  3,253     2,485     6,223    4,578
  Depreciation and
    amortization                724     1,069     1,436    2,124
  Restructuring provision      (150)   10,500      (150)  10,500
                             ------     -----    ------   ------

Operating income (loss)       1,985   (11,216)    3,599  (12,630)

Equity in earnings from
  unconsolidated businesses      94       (19)      417       37
Interest expense                 27       247       120      590
Interest income                 129        84       276      196
Other income (expense)          218        35       (59)      61
                             ------     -----    ------   ------

Income (loss) before taxes
  on income                   2,399   (11,363)    4,113  (12,926)

Taxes on income                   8       110         8      138
                             ------     -----    ------   ------

Net income (loss)             2,391   (11,473)    4,105  (13,064)

Dividends to preferred
  shareholders                   44       129       128      172
                             ------     -----    ------   ------
Income (loss) available to
  common shareholders        $2,347  $(11,602)   $3,977 $(13,236)
                             ------     -----    ------   ------
                             ------     -----    ------   ------
Income (loss) per common
  share
     Basic                    $0.05    $(0.32)    $0.09   $(0.36)
     Diluted                  $0.05    $(0.32)    $0.09   $(0.36)

Weighted average shares used
  in computation
     Basic                   45,450    36,818    44,614   36,742
     Diluted                 49,035    36,818    47,962   36,742

</TABLE>

The Notes to Condensed Consolidated Financial Statements are an
integral part of this statement.

<PAGE>
                       LCA-VISION INC.
         Condensed Consolidated Statements of Cash Flows
         for the Six Months Ended June 30, 1999 and 1998
                        (unaudited)

<TABLE>

                                          in thousands

                                              Six Months Ended
                                                  June 30,
                                            1999          1998
                                            ----          ----
<S>                                        <C>         <C>

Cash flows from operating activities:
Net income (loss)                          $4,105      $(13,064)
Adjustments to reconcile net income
  (loss)to net cash provided by
  (used in) operating activities:
    Depreciation and amortization           1,436         2,124
    Equity in income of unconsolidated
      affiliates                             (417)          (37)
    Compensation paid in common stock         375           - -
    Restructuring provision                  (150)       10,500
    Other                                    (150)           41
    Changes in working capital:
       Accounts receivable                 (1,362)          388
       Prepaid expenses, inventory
         and other                             (3)         (683)
       Accounts payable                       144             2
       Accrued liabilities and other          761            61
                                             ----          ----

Net cash provided by (used in) operations   4,611          (709)
                                             ----          ----

Cash flows from investing activities:
   Purchase of property and equipment        (227)       (1,506)
   Advances to affiliates                     - -          (570)
   Proceeds from sales of equipment           - -           461
   Other, net                                 (22)          - -
                                             ----          ----

Net cash (used) by investing activities      (249)       (1,615)
                                             ----          ----

Cash flows from financing activities:
   Net (repayment) bank borrowing             - -        (9,639)
   Principal payments of long-term notes,
     debt and capital lease obligations    (2,388)          (33)
   Exercise of stock options                  559            51
   Proceeds from sale of 6% convertible
     preferred stock                          - -         9,463
   Other                                      - -           (74)
                                             ----          ----

Net cash provided (used) by financing
   activities                              (1,829)         (232)
                                            -----          ----

Increase (decrease) in cash and cash
   equivalents                              2,533        (2,556)

Cash and cash equivalents at beginning
   of period                                6,496         8,680
                                            -----         -----

Cash and cash equivalents at end of
   period                                  $9,029        $6,124

</TABLE>

The Notes to Condensed Consolidated Financial Statements are an
integral part of this statement.


<PAGE>
                        LCA-VISION INC.
        Notes to Condensed Consolidated Financial Statements
      for the Three and Six Months Ended June 30, 1999 and 1998
                          (unaudited)

1.     Summary of Significant Accounting Policies

The June 30, 1999 and 1998 financial data are unaudited; however,
in the opinion of the Company, such data include all adjustments,
consisting only of normal recurring adjustments, necessary for a
fair statement of the interim periods.

Business

We are a leading developer and operator of free-standing laser
refractive surgery centers. Our laser refractive surgery centers
provide the facilities, equipment and support services for
performing various corrective eye surgeries that employ
state-of-the-art laser technologies.  The laser vision correction
surgeries performed in our centers are primarily laser in situ
keratomileusis ("LASIK") and photorefractive keratectomy ("PRK").
The VISX Star S2 laser, which we have in each of our U.S. centers,
treats nearsightedness, myopic astigmatism, and hyperopia. We also
manage multi-specialty laser surgery programs at medical
facilities on a contract basis.

Revenue by source is comprised of:
     -  Laser refractive surgery - fees for surgeries performed at
        our wholly-owned centers.
     -  Other - management fees for operating laser vision
        correction centers of investees; contractual fees for
        managing multi-specialty laser surgery programs at
        hospitals; marketing and education program fees; and
        miscellaneous sources.

Operating costs and expenses are classified as follows:
     -  Medical professional and license fees include fees
        collected by us for the physicians performing laser vision
        correction and the license fee of $260 per procedure paid
        to VISX.
     -  Direct costs of services include center rent and
        utilities, equipment lease and maintenance costs, surgical
        supplies, center staff expense, and costs related to other
        revenue.
     -  General and administrative include marketing and
        advertising, headquarters staff expense, and other
        overhead costs.
     -  Depreciation and amortization include periodic charges to
        income for the costs of equipment and intangible assets
        recorded in the balance sheet.

Consolidation Policy

We use two different methods to report our investments in our
subsidiaries and other companies - consolidation and the equity
method.

Consolidation
We use consolidation when we own a majority of the voting stock of
the subsidiary. This means the accounts of our subsidiaries are
combined with our accounts. We eliminate intercompany balances and
transactions when we consolidate these accounts.

Equity Method
We use the equity method to report investments in businesses where
we hold a 20% to 50% voting interest, giving us the ability to
exercise significant influence, but not control, over operating
and financial policies. Under the equity method we report:

     -  our interest in the entity as an investment in our
        Consolidated Balance Sheets, and
     -  our percentage share of the earnings (losses) in our
        Consolidated Statements of Operations.

We report our investments in The Baltimore Laser Sight Center,
Ltd. and Silmalaseri Oy under the equity method.

Use of Estimates

Management makes estimates and assumptions when preparing
financial statements under generally accepted accounting
principles. These estimates and assumptions affect various matters
including:

     -  our reported amounts of assets and liabilities in our
        Consolidated Balance Sheets at the dates of the financial
        statements,
     -  our disclosure of contingent assets and liabilities at the
        dates of the financial statements, and
     -  our reported amounts of revenues and expenses in our
        Consolidated Statements of Operations during the reporting
        periods.

Actual amounts could differ from those estimates.

Reclassifications

We have reclassified certain prior-year amounts for comparative
purposes. These reclassifications did not affect consolidated
financial position, net losses or cash flows for the years
presented.

Per Share Data

Basic per share data is income (loss) applicable to common
shareholders divided by the weighted average common shares
outstanding. Diluted per share data is income (loss) applicable to
common shareholders divided by the weighted average common shares
outstanding plus the potential issuance of common shares if stock
options and warrants were exercised or convertible preferred stock
were converted into common stock.

Following is a reconciliation of basic and diluted earnings per
share for the three and six months ended June 30, 1999 (in
thousands, except per share amounts):


<TABLE>

                                   Three Months Ended June 30,    Six Months Ended June 30,
                              Income    Shares     Per-Share   Income     Shares     Per-Share
                            Numerator  Denominator   Amount   Numerator  Denominator  Amount
                            ---------  ----------- ---------  ---------  ----------- ---------
<S>                           <C>         <C>        <C>        <C>         <C>        <C>
Net income                    $2,391                            $4,105
Dividends to preferred
  shareholders                   (44)                             (128)
                               -----                             -----

Basic EPS
    Income available to
      common shareholders      2,347       45,450     $0.05     3,977       44,614     $0.09
                                                       ----                             ----
                                                       ----                             ----

Effect of Dilutive Securities
    Convertible preferred stock   44          836                 128        1,482
    Stock options                           2,655                            1,819
    Warrants                                   94                               47
                                ----       ------                            -----

Diluted EPS
Income available to common
shareholders and assumed
conversions                   $2,391       49,035     $0.05    $4,105       47,962     $0.09
                               -----       ------      ----     -----       ------      ----
                               -----       ------      ----     -----       ------      ----

</TABLE>

The weighted average shares for the June 30, 1998 diluted calculations
do not assume exercise of any stock options or conversion of other
securities since they would result in a reduced loss per share.

2. Shareholders' Investment

     Common Stock
     On June 30, 1999 we sold 5,000,000 new shares of our common
     stock at a public offering price of $8.00 per share. The net
     proceeds will approximate $37,300,000 after deducting
     underwriting discounts and commissions and our estimated
     offering expenses, including the fee to be listed on the
     Nasdaq National Market. At June 30, 1999 offering expenses of
     $114,000 were incurred and recorded as a prepaid expense.

     On July 6, 1999 we received $37,800,000 which was net of
     underwriting discounts and commissions. The pro forma balance
     sheet assumes that the public offering proceeds and offering
     expenses were settled on June 30, 1999.

     Class A Preferred Stock
     At June 30, 1999 there are no shares of Class A Preferred
     Stock issued and outstanding. Our principal shareholder paid
     approximately $34,000 of a note due us with his shares of
     Class A Preferred Stock.

     In February 1999 the other holders exchanged their shares of
     Class A Preferred Stock for 33,191 shares of our common
     stock. We retired the shares of Class A Preferred Stock
     received.

     During the six months ended June 30, 1999, 344,470 shares of
     common stock at a weighted average exercise price of $1.62
     per share were issued to individuals who exercised stock
     options. During the three months ended June 30, 1999
     individuals exercised 206,420 stock options at a weighted
     average exercise price of $1.36 per share.

     6% Series B-1 Convertible Preferred Stock
     At December 31, 1998, 5,702 shares of the 6% Series B-1
     convertible preferred stock were outstanding. During the
     three months ended March 31, 1999, these shares and dividends
     totaling $264,000 were converted into 3,994,642 shares of
     common stock.

     The terms of these shares gave the holders the right to
     purchase an additional $5 million of convertible preferred
     stock under the same terms and conditions as the 6% Series B-
     1 Convertible Preferred Stock until May 11, 1999. In March
     1999 certain majority holders of these shares agreed to
     accept 165,076 shares of our common stock in exchange for
     their waiving their option to purchase the additional
     convertible preferred stock. In June, 1999 a former holder of
     these shares agreed to accept 25,396 shares of our common
     stock in the same type of exchange. These agreements resulted
     in non-cash charges of $50,000 and $325,000 recorded as other
     expense in the Condensed Consolidated Statement of Operations
     for the three and six months ended June 30, 1999,
     respectively.

3. Debt

At December 31, 1998 we had a term loan borrowing under our credit
facility of $2,053,000. The loan had an interest of 7.45% and
required monthly installments of $12,000 plus interest until June
30, 2000 when the remaining principal balance of $1,705,000 would
become due. In March 1999 we repaid the loan balance of
$2,030,000.

In May 1999 our line of credit with The Provident Bank was
increased to $10,000,000. We also were granted a $10,000,000 line
of credit for the purpose of funding acquisitions.

4. Obligations Due from Shareholders and Their Affiliates, Net

The following table displays the details of net obligations due to
us as reported in our June 30, 1999 Condensed Consolidated Balance
Sheet (in thousands):

     Due to us:
       Receivable from shareholder's
         affiliated company               $631
       Accrued interest                     77
     Due from us:
       Accrued Interim Series B preferred
         stock dividend                    447
                                           ---
     Net due us                        $   261
                                           ---
                                           ---

Our principal shareholder is the majority stockholder of an
inactive ambulatory surgical center. We have no investment in this
surgery center; however, we did lease a portion of our
headquarters building and provided other administrative services.
During 1999 we acquired computer equipment and software from the
surgery center at their book value of $103,000. The account
receivable was reduced by this amount.

At December 31, 1998 we owed our principal shareholders notes in
the principal amount of $1,500,000 and interest of $568,000. These
shareholders owed us $2,100,000 which was collateralized by our
obligation to them. In March 1999 we repaid the obligations due
shareholders of $2,094,000 by netting the amount against the
advance to shareholders.

5. Segment Information

We operate in one segment - laser refractive surgery. The table
below summarizes the results of our Canadian operations included
in the Condensed Consolidated Statement of Operations for the
three and six months ended June 30, 1999 and 1998 (in thousands):
                     Three Months Ended       Six Months Ended
                          June 30,                 June 30,
                          --------                 --------
                      1999      1998           1999      1998
                      ----      ----           ----      ----

Revenues             $457       $636           $819     $1,156
Operating profit       51        101             67        192

6. Additional Financial Information

The table below provides additional financial information related
to our Condensed Consolidated Statement of Operations (in
thousands):

                     Three Months Ended       Six Months Ended
                          June 30,                 June 30,
                          --------                 --------
                      1999      1998           1999      1998
                      ----      ----           ----      ----

Direct costs of
  laser refractive
  surgery:
    Employee costs   $1,001    $1,036        $1,954    $2,078
    Equipment rent
     and maintenance    900       632         1,757     1,359
    Facility rent and
     utilities          309       413           604       859
    Supplies, gas and
     other              479       310           885       593
                       ----      ----          ----      ----

     Total         $  2,689   $ 2,391       $ 5,200   $ 4,889
                      -----     -----         -----      ----
                      -----     -----         -----      ----


7. Commitments and Contingencies

We are a defendant and counter-claimant in a case entitled Cabrini
Development Council, et al. v. LCA-Vision Inc., et al., which was
commenced in October, 1997 in the Supreme Court of the State of
New York, County of New York and subsequently removed to the
United States District Court for the Southern District of New
York. Also named as co-defendants are various current and former
employees, officers and directors. The case arises out of the
operations of a New York limited liability company (the "LLC")
which had been formed by us, the plaintiffs and a New York
professional corporation (the "PC") owned by certain physicians
for the purpose of opening and operating a Laser Refractive
Surgery center or centers in New York City. Business activities
commenced in 1995, but were unprofitable. After the LLC's
resources were exhausted, we paid its operating costs for a period
of time. In August, 1997, after further losses and after the
parties were unable to come to a final understanding as to their
respective rights and obligations, the operations of the LLC
ceased.

In the complaint, the plaintiffs allege breaches of our
obligations as a member of the LLC, and have demanded both
substantial damages and equitable relief. We have filed an answer
denying the allegations of the complaint, and asserting
counterclaims against the plaintiffs seeking substantial damages,
alleging that the plaintiffs wrongfully failed to match the
capital contributions made by us to the LLC. We believe that the
plaintiffs' claims are without merit and intend to vigorously
defend the action and pursue our counterclaims.

After commencement of the above action, we filed an action against
the PC seeking damages for its failure to pay the capital
contributions required of it to the LLC. The PC has counterclaimed
alleging a right to be indemnified for its losses relating to the
LLC's operations.

Discovery in the actions, has recently concluded. All parties have
indicated their intention, based on the discovery results, to move
to dismiss all claims of the other parties. The court has set a
motion schedule which ends in October, 1999, and a decision on the
motions will occur thereafter.

In the opinion of management neither action will have a material
adverse effect on our financial position or results of operations.

<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.

This quarterly report on Form 10-QSB contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934.
Actual results could differ materially from those projected in the
forward-looking statements as a result of a number of important
factors. For a discussion of important factors that could affect
our results, refer to the Overview and financial statement line
item discussions set forth in Management's Discussion and Analysis
or Plan of Operation.

"Management's Discussion and Analysis or Plan of Operation" is an
analysis of our operating results for the three and six months
ended June 30, 1999. It explains why our revenues and costs
changed, our overall financial condition, and other matters
including the Year 2000 Issue.

Overview (dollars in thousands, except where noted)

We are a leading developer and operator of free-standing laser
refractive surgery centers. Our laser refractive surgery centers
provide the facilities, equipment and support services for
performing various corrective eye surgeries that employ
state-of-the-art laser technologies.  The laser vision correction
surgeries performed in our centers primarily include laser in situ
keratomileusis ("LASIK") and photorefractive keratectomy ("PRK").
The VISX Star S2 laser, which we have in each of our U.S. centers,
can be used for correcting nearsightedness, myopic astigmatism,
and hyperopia. We also manage multi-specialty laser surgery
programs at medical facilities on a contract basis.

Our sources of revenue are:
     -  Laser refractive surgery - fees for surgeries performed at
        our wholly-owned centers.
     -  Other - management fees for operating laser vision
        correction centers of investees; contractual fees for
        managing multi-specialty laser surgery programs at
        hospitals; marketing and education program fees; and
        miscellaneous sources.

Our operating costs and expenses are comprised of:
     -  Medical professional and license fees include fees
        collected by us for the physicians performing laser vision
        correction and the license fee of $260 per procedure paid
        to VISX.
     -  Direct costs of services include center rent and
        utilities, equipment lease and maintenance costs, surgical
        supplies, center staff expense, and costs related to other
        revenue.
     -  General and administrative include marketing and
        advertising, headquarters staff expense, and other
        overhead costs.
     -  Depreciation and amortization include periodic charges to
        income for the costs of equipment and intangible assets
        recorded in the balance sheet.

Results of Operations - Revenues

Laser refractive surgery

Laser refractive surgery revenue generally includes three
components: facility fee, royalty fee, and medical professional
fees. Certain states prohibit us from practicing medicine,
employing physicians to practice medicine on our behalf or
employing optometrists to render optometry services on our behalf.
Revenues and costs from centers in such states do not include the
medical professionals fee component. The contribution from laser
refractive surgery procedures for the three and six months ended
June 30, 1999 and 1998 were (dollars in thousands):

                      Three Months Ended      Six Months Ended
                          June 30,                  June 30,
                     1999          1998       1999         1998

Revenue            $14,346        $8,290    $27,735      $14,736

Less: Medical
 professional and
 license fees        6,186         3,537     12,201        6,193
                    ------         -----     ------       ------

Contribution     $   8,160      $  4,753    $15,534     $  8,543
                    ------         -----     ------       ------
                    ------         -----     ------       ------

The following table illustrates the growth of laser vision
correction procedures performed at our centers. Combined
procedures include those performed at investee centers. We record
the results of our investee centers using the equity method.

                 Wholly-owned                 Combined
         1999      1998       1997     1999     1998     1997
Q1      7,591     3,887        979    9,064    4,450    1,443
Q2      8,365     4,891      1,506    9,742    5,737    2,078
Q3                5,327      2,375             6,102    2,794
Q4                5,686      2,888             6,791    3,400

Our growth and profitability are predicated on increases in
procedure volume. Industry sources estimate that over 800,000
procedures will be performed in the U.S. in 1999. As more people
have the procedure performed the critical mass for word-of-mouth
referrals is attained and, together with marketing and
advertising, we expect an increase in procedure volume.

Other

Revenue declined because we reduced the extent to which we provide
management services for multi-specialty surgery programs at
hospitals due to the difficult business environment. The renewal
of our contracts with the hospital providers became increasingly
difficult due to price pressures and the lengthening of sales
cycle. Hospital providers and other entities were being driven to
reduce costs and scaleback their operations, sometimes including
the programs that we managed. In addition, budget reductions at
the facilities reduced the marketing and education programs, key
elements to a successful surgery program.

Operating costs and expenses

Medical professional and license fees
The increases are a direct result of the increase in procedures
performed at our wholly-owned centers. These costs comprise a
significant portion of the total costs of a laser vision
correction procedure.

Direct costs of services
The table below provides information related to our direct costs
of services.

                      Three Months Ended      Six Months Ended
                          June 30,                  June 30,
                     1999          1998       1999         1998

Laser refractive
  surgery
   Employee costs   $1,001        $1,036     $1,954      $2,078
   Equipment rent
     and maintenance   900           632      1,757       1,359
   Facility rent and
     utilities         309           413        604         859
   Supplies, gases
     and other         479           310        885         593
                     -----         -----      -----       -----

                     2,689         2,391      5,200       4,889
Other                   43           253         88         574
                     -----         -----      -----       -----

                   $ 2,732        $ 2,644    $5,288      $5,463
                     -----         -----      -----       -----
                     -----         -----      -----       -----

These costs decrease as a percentage of revenue because they
represent, for the most part, the fixed costs of a laser vision
correction center. 1998 includes the costs of the eight centers
closed during the year.

General and administrative
The table below provides information related to general and
administrative expenses (in thousands, except per cent data).

                   Three months                  Six months
               Dollars    % of Revenue    Dollars    % of Revenue
               -------    ------------    -------    ------------

June 30, 1999   $3,253         22          $6,223         22
June 30, 1998    2,485         28           4,578         28

Our general and administrative expenses rose in dollars recorded
primarily due to additional marketing costs and programs and
increased usage of financing options offered, on a non-recourse
basis, to patients.

Depreciation and amortization
The decrease results primarily from the write-off of goodwill and
leasehold improvements and the write-down of idled lasers to their
net realizable values announced in the second quarter of 1998.

Non-operating income and expenses

Equity in earnings of unconsolidated affiliates is our share of
the profits of unconsolidated affiliates. Interest expense
decreased due to the significant reduction in debt. Interest
income increased because we had cash to invest in overnight cash
equivalents. Other expense in 1999 includes a $350,000 expense
associated with the issuance of 190,472 shares of our common stock
to certain majority holders of our 6% series B-1 convertible
preferred stock in exchange for these holders waiving their option
to purchase an additional $5,000,000 of convertible preferred
stock.

Liquidity and Capital Resources

On June 30, 1999 we sold 5,000,000 new shares of our common stock
at a public offering price of $8.00 per share. The net proceeds
will approximate $37,300,000 after deducting underwriting
discounts and commissions and our estimated offering expenses,
including the fee to be listed on the Nasdaq National Market. At
June 30, 1999 offering expenses of $114,000 were incurred and
recorded as a prepaid expense. On July 6, 1999 we received
$37,800,000 which was net of underwriting discounts and
commissions.

We intend to use the net proceeds of the offering as follows:

     -  To open additional laser vision correction centers,
     -  To purchase additional equipment,
     -  To extensively market our centers and the LCA-Vision brand
        name,
     -  To fund possible future strategic acquisitions, and
     -  To provide working capital and for general corporate
        purposes.

We currently have no agreements or understandings with respect to
any material future acquisition. We will have broad discretion in
how to use our net proceeds. Until we use the proceeds for
business purposes, we intend to temporarily invest our net
proceeds from this offering in short-term, investment-grade,
interest-bearing securities or obligations of, or guaranteed by
the U.S. government.

Other sources of liquidity for the next year are expected to be:
     -  cash generated from operations
     -  proceeds from the exercise of stock options
     -  credit facility and lease financing, as necessary

We generated positive cash flow from operations for the quarter
and six months ended June 30, 1999. This was sufficient to finance
our capital expenditures and debt repayment in the quarter.

Our cash balance increased $2,533,000 during the six months ended
June 30, 1999. Cash flow from operations was $4,611,000 during
this period. We also received $559,000 from the exercise of stock
options. We used $2,388,000 of our cash to make principal payments
on our debt and $227,000 for additions to property and equipment.

During the quarter ended March 31, 1999, all of the outstanding
shares of our Series B-1 convertible preferred stock and accrued
dividends thereon were converted into shares of our common stock.
Beginning April 1, 1999, we no longer accrued dividends for this
stock. Our repayment of the term loan during March 1999 resulted
in interest savings approximating $40,000 and principal payments
of $35,000 in the second quarter.

In May 1999 our line of credit with The Provident Bank was
increased to $10,000,000. At June 30, 1999, the line of credit
supports letters of credit totalling $1,000,000 and $9,000,000 is
available to us for borrowing. We also were granted a $10,000,000
line of credit for the purpose of funding acquisitions.

At December 31, 1998 we had net operating loss carryforwards
("NOL's") for federal and state income tax purposes of $35.3
million which expire in varying amounts from 2012 through 2019.
These operating losses are available to offset future taxable
income. Approximately $15 million of the NOL's were acquired when
we bought Refractive Centers International, Inc. in August 1997
and their use is subject to limitation under Section 382 of the
Internal Revenue Code.

Approximately $15 million of our NOL's consist of deferred tax
assets for which, because of our operating losses, we could not
record a benefit in our statement of operations and a valuation
allowance was necessary. If our profitability continues, we will
be able to reduce the valuation allowance. A reduction of the
valuation allowance is generally shown in the statement of
operations as a reduction of income tax expense.

Regardless of when the reduction in the valuation reserve is
recognized in the statement of operations, the utilization of the
NOL's will substantially reduce our cash obligation for payment of
income taxes otherwise due over the next several years.

Year 2000 Issue
Compliance. Our services, operations, customers, suppliers and
service providers all rely on information technology systems, both
hardware and software, to function properly. This includes readily
apparent systems such as those controlling the VISX excimer lasers
used as a key part of our services as well as less obvious ones
such as those required to provide electricity to our headquarters
and our centers.


Suppliers. We have been surveying existing suppliers about the
ability of their systems and products to properly handle dates for
the Year 2000. However, VISX has advised us that its excimer
lasers will remain fully functional through the Year 2000 and
beyond. VISX has determined that the excimer laser systems do not
properly print or store patient report dates and procedures
performed in the Year 2000. VISX is in the process of developing
and testing a solution to this problem and expects to have it
available to us by the middle of 1999.

Operations. We have been gathering information from vendors about
Year 2000 compliance for each of the major elements  of our
internal information technology systems. Based on the statements
from vendors, we understand the following:

The latest versions of our operating systems, which include MS
Windows NT 4.x, MS Windows 98, MS Windows 95 and Solaris 7, are
all Year 2000 compliant. We will purchase packages to make our Sun
Solaris 2.5.1 server operating systems Year 2000 compliant. We
expect to complete this early in the third quarter of 1999.

Our key applications, which include Oracle 8, Solomon IV financial
software for Windows, MS Office 97 and Netscape Enterprise server
and browser, are Year 2000 compliant.

We have not verified or tested compliance for our call center
information system because we are in the process of installing a
new system, the Melita International Corporation  PhoneFrame
Explorer System. This system, which is Year 2000 compliant, should
be in operation by the end of the third quarter of 1999. The cost
of the new system is expected to be in excess of $200,000 and will
either be included in our capital expenditures or leased.

Our computer hardware, which is all PC-based, is Year 2000
compliant with the exception of several older personal computers.
The hardware used to control our local area network is Year 2000
compliant. We expect to install any necessary upgrades or replace
any computers that are not Year 2000 compliant during the second
and third quarters.


We have received notification from third parties that service our
facility that it is Year 2000 compliant with regard to building
security, heating, elevator, and lighting controls.

Costs to address Year 2000 issues

We expect that any remaining costs for the Year 2000 compliance
will be less than $40,000 and that most of our disbursements will
be for equipment purchases and, therefore, will be capitalized and
depreciated or leased. However, we may spend more money than we
have estimated, and this could have a material adverse effect on
our results of operations and financial condition. At this stage
in our assessment process, we do not believe that the Year 2000
issue will materially impact our financial position, results of
operations or cash flows in future periods. There can be no
assurance that operating problems or expenses related to the Year
2000 issue will not arise with our computer systems and software
or that customers or suppliers will be able to resolve their Year
2000 issues in a timely manner. Accordingly, we plan to devote the
necessary resources to resolve all significant Year 2000 issues in
a timely manner.

Contingency plans

The most reasonable likely worst case Year 2000 scenario would be
that a solution to the VISX laser printing and storage of patient
report dates for procedures performed in the Year 2000 and beyond
is not corrected in a timely manner. To the extent that any
computer documentation of procedure is unavailable, we are
prepared to manually produce the necessary reports. As we complete
our internal review and external surveys  we will make additional
contingency plans to address the problems that we believe are
reasonably likely to arise. However, despite our best efforts, we
may not anticipate all problems that may ultimately arise.

Risks of Year 2000 issues

We will continue preparations to ensure that the information
technology relating to our services, operations and suppliers will
recognize dates and function properly in the Year 2000 and beyond.
However, unanticipated problems could affect our ability to
provide services to our customers or interrupt or prevent
deliveries from suppliers at the onset of the Year 2000. As a
result, we could suffer a material adverse impact to our business,
financial position and results of operation sue to a loss of
revenue, legal claims or extra expenses cause by unanticipated
Year 2000 computer problems.

<PAGE>
Part II. Other Information

Item 1. Legal Proceedings

        Commitments and Contingencies
        We are a defendant and counter-claimant in a case entitled
        Cabrini Development Council, et al. v. LCA-Vision Inc., et
        al., which was commenced in October, 1997 in the Supreme
        Court of the State of New York, County of New York and
        subsequently removed to the United States District Court
        for the Southern District of New York. Also named as co-
        defendants are various current and former employees,
        officers and directors. The case arises out of the
        operations of a New York limited liability company (the
        "LLC") which had been formed by us, the plaintiffs and a
        New York professional corporation (the "PC") owned by
        certain physicians for the purpose of opening and
        operating a Laser Refractive Surgery center or centers in
        New York City. Business activities commenced in 1995, but
        were unprofitable. After the LLC's resources were
        exhausted, we paid its operating costs for a period of
        time. In August, 1997, after further losses and after the
        parties were unable to come to a final understanding as to
        their respective rights and obligations, the operations of
        the LLC ceased.

        In the complaint, the plaintiffs allege breaches of our
        obligations as a member of the LLC, and have demanded both
        substantial damages and equitable relief. We have filed an
        answer denying the allegations of the complaint, and
        asserting counterclaims against the plaintiffs seeking
        substantial damages, alleging that the plaintiffs
        wrongfully failed to match the capital contributions made
        by us to the LLC. We believe that the plaintiffs' claims
        are without merit and intend to vigorously defend the
        action and pursue our counterclaims.

        After commencement of the above action, we filed an action
        against the PC seeking damages for its failure to pay the
        capital contributions required of it to the LLC. The PC
        has counterclaimed alleging a right to be indemnified for
        its losses relating to the LLC's operations.

        Discovery in the actions, has recently concluded. All
        parties have indicated their intention, based on
        the discovery results, to move to dismiss all claims of
        the other parties. The court has set a motion schedule
        which ends in October, 1999, and a decision on the motions
        will occur thereafter.

        In the opinion of management neither action will have a
        material adverse effect on our financial position or
        results of operations.

Item 2. Changes in Securities.
        None

Item 3. Defaults upon Senior Securities.
        None

Item 4. Submission of Matters to a Vote of Security Holders
        None

Item 5. Other Information.
        None

<PAGE>
Part II. Other Information (continued)

Item 6. Exhibits and Reports on Form 8-K.

        (a) Exhibits

        Exhibit
        Number          Description of Exhibit
        -------         ----------------------

        27              Financial Data Schedule

        (b) Reports on Form 8-K.
        1)  Form 8-K dated May 14, 1999, announcing that The
            Provident Bank increased the Company's line of credit
            to $10 million and had issued an additional new line
            of credit, in the amount of $10 million, for the
            purpose of funding acquisitions.
        2)  Form 8-K dated June 8, 1999 announcing that the
            Company had filed a registration statement for a
            public offering of 8.3 million shares of its common
            stock; 5.0 million of which are being sold by the
            Company and 3.3 are being sold by certain selling
            shareholders.
        3)  Form 8-K dated June 30, 1999 announcing the pricing of
            a public offering of 6 million shares of the Company's
            common stock; 5 million shares by the Company, 1
            million shares by certain selling stockholders.
        4)  Form 8-K dated July 6, 1999 announcing the laser
            vision correction procedure volumes for the six
            months ended June 30, 1999.
        5)  Form 8-K dated July 12, 1999 announcing that LCA-
            Vision and Cole National entered into an arrangement
            to make laser vision correction available to 50
            million members of Cole Managed Vision through a
            national network of laser vision correction providers
            to be established by LCA-Vision.



                             Signatures

In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.

                             LCA-VISION INC.



Date   July 28, 1999                /s/ Stephen N. Joffe
     ---------------                --------------------
                                    Stephen N. Joffe
                                    Chairman and Chief Executive
                                    Officer




Date    July 28, 1999               /s/ Larry P. Rapp
     ----------------               -----------------
                                    Larry P. Rapp
                                    Treasurer and Chief
                                    Financial Officer