How Do You Price Free Form Progressive Lenses?

Freeform progressives are commanding top dollar at many optometric practices, according to The Vision Council November 2012 Eye Care Professional Report. The most expensive progressive lenses being dispensed were free form progressives which sold on average for $413.14. Free form progressives were less expensive at smaller practices. Practices with only one location sold free form progressives for an average of $402.93, while practices with more than five locations sold free forms for $436.82 on average–over $30 more per pair. Free forms were also more expensive in the Midwest region of the US than other regions ($431.60 in the Midwest vs. $382.39 in the Mountain-Pacific region.

 

How freeform progressive lenses are doing in your practice?

If you have an average practice, you are seeing 2,200 patients for exams with refractions per year per doctor. Approximately 60 percent are getting eyeglasses–that would be 1,320 people (eg: .6 x 2,200 = 1,320). Of the 1,320 people who get glasses, approximately 50 percent are single vision and 50 percent are multifocals. That means 660 potential pairs of freeform progressive lenses per year could be sold in your practice.

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How Satisfied Are Patients With Exams at Independent OD vs. Chains?

Independent ODs are leaving a more favorable impression with patients than corporate-owned optometry chains, according to Jobson Optical Research’s 2012 Adult Consumer Eye Exam Experience. Fewer consumers who had an exam at a chain in the last six months strongly agreed with the statement that overall they were satisfied with the eye exam experience compared to those who had an exam at an independent in the last six months (45.3% and 58.1% respectfully). Indeed, just under half of those consumers who had an eye exam at a chain in the last six months (46%) said the exam was thorough, compared to 58.9% of those consumers who had an eye exam at an independent in the last six months.

Among consumers who had their eye exam at a chain in the last six months, 53.4% said they were extremely likely to return to the same place for their next eye exam. By comparison, 70.7% of those who had their eye exam at an independent in the last six months said they were extremely likely to return to the same place for their next exam.

Of the respondents who had their exam at an independent in the last six months, 63.5% reported that they are currently covered by a type of managed vision care or vision insurance plan. This is greater than the 53.9% who have a vision plan and chose to have their eye exam at a chain in the last six months.

Who Does Better Financially? Solo ODs or ODs in Partnerships?

Optometrists who practice alone are up against greater financial odds than those in partnerships. Annual income for solo doctors averaged $144,125 last year. But ODs in partnership or group practices averaged $191,195—a difference of nearly 33%. Like other doctors, the report surmises, optometrists are under an ever-growing pressure to invest more in technological and practice costs; group practices can share these expenses and take advantage of efficiencies of scale. That can translate to more profit.

Net is an interesting topic in the optometry world. There are actually two different “nets” we should discuss.

The Optometric Net is calculated by adding together all dollars paid to all optometrists (both employed optometrists and owner optometrists) for working in the practice plus any money left over after paying all other expenses. This is the number that is traditionally referred to as the “Net” in optometry. This practice is unique to optometrists.

A True Net is calculated by subtracting all expenses including what it costs to have optometrists in the practice from all money collected. This is the number that all other businesses in the world (except optometric practices) use to judge fiscal health.

Formula:                  

Money collected-Cost of Goods-Payroll-Occupancy-Marketing-Overhead=Optometric Net-Optometric Payroll=True Net

You need to know both numbers, the Optometric Net and the True Net. There are a two major reasons: tax consequences and future consequences.

It matters, from a tax perspective, how you remove income from a practice. This is a discussion you should have with your tax planner as soon as possible. It is your responsibility to pay any taxes that are appropriate, but if you have not had the discussion of how best to remove money from the practice with your tax planner, then that conversation needs to be scheduled now.

As the owner of the practice, how do you know how much you are going to be paid?  If you are just waiting to see how much money is left over and that becomes your “payroll” amount, then you are not treating your practice as a business. Hiring an optometrist to work in your practice is a business expense. If you are working in the practice, then you need to be hired by the practice to do that work. Every business needs to know its true expenses. You need to know yours.

Vision Loans Program Receives Additional $10 Million in Funding from Essilor and VSP Vision Care

Essilor of America, Inc., and VSP Vision Care announced that they each have committed an additional $5 million in funding to the Vision Loans Program, which supports independent eyecare professionals (ECPs) by providing loans to optometrists looking to finance first-time practice purchases, partnership buy-ins and refinancing options.

The Vision Loans Program is a joint effort between Vision One Credit Union, Essilor and VSP. Since its launch in 2003, the program has distributed nearly $58 million in financial support to optometrists who want to enter private practice and those who want to successfully transition out. All loan payments are reinvested back into the program to ensure the continued success and growth of private practice optometry. “Supporting the Vision Loans Program is an important way for us to help optometrists remain independent and competitive in this changing marketplace,” says Howard Purcell, OD, vice-president of Customer Development at Essilor.

“The dynamics of the optometric practice today present some unique challenges to graduating ECPs.This added commitment will help thousands more enter private practice, and we are glad to provide that support.” Vision Loans provide funds for first-time buyers interested in:

Partnership Buy-ins: To purchase an ownership interest in an existing practice.

Practice Purchases: In conjunction with existing Vision One loan programs to purchase 100 percent of a private practice.

Down Payments: In conjunction with seller financing when purchasing up to 100 percent of a private practice.

Practice Refinance: Available for debt used as initial start-up or purchase of a private practice. “Innovative offerings like the Vision Loans Program help make certain that independent optometry can grow and renew itself year after year,” says VSP Global’s Chairman of the Board Stuart Thomas, OD. “We’re committed to exploring and supporting initiatives that keep independent ECPs thriving.”

Despite an uncertain economic outlook, Vision One says that demand for the program remains strong due to the unique capital loan access it provides, which can be difficult to obtain through traditional bank lenders. In fact, since the beginning of the recession, over $37 million in practice purchase loans have been funded.

For more information about Vision Loans, contact Vision One Credit Union’s lending division at 800-327-2628 or visionone.org.

Advice to a Third-Year OD Student: What Do You Wish You Had Known?

What am I going to do now? Where am I going to find a job? How do I go about opening up my own practice? These are just a few of the many business-related questions optometry students face when nearing graduation. A further question might be why these questions have to be asked in the first place. Although there has been a drastic effort and improvement to educate our new graduates on the basics in business management of optometry, is it really enough? At what point must we make an effort to educate ourselves?

While it is helpful for optometry schools to lend students a hand at getting started in business, students also need to take the initiative and seek out information. Unlike past generations, we are fortunate to have tremendous resources lying at our fingertips with the internet. Thanks to our smartphones and electronic tablets, we can pursue that information during any spare moment. Waiting for class to begin? The perfect time to catch up on your reading of professional publications such as this one or check in with optometric groups on Facebook. The key is reaching out and obtaining information rather than waiting passively for the needed knowledge to miraculously drop in our laps.

As we all know, optometry school can be quite rigorous and demanding. Although many of us are concerned with simply getting through the curriculum, we must not neglect the business aspect of optometry. It is this lack of planning and knowledge along with the immediate burden of debt that forces our new graduates into modes of practice they never envisioned (or wanted). The optometry students who always dreamed of private practice, but find themselves a few years after graduation stuck working for someone else, can sometimes blame themselves for not being more proactive and educating themselves on what it takes to get started in business. Don’t let your optometric future choose you rather the other way around. With the right business, as well as clinical education, you have a greater chance of choosing the optometric career you always envisioned.

We understand the importance of learning the practice management and business side of optometry. As we are all in this together, we write this post with the intention of enlightening our peers with feedback and advice from experienced OD’s. We hope our efforts will generate a greater interest in our colleagues toward the business aspect of their future careers. We also encourage student feedback and responses. If you have any specific questions you would like answered,  please e-mail us or post it here, as it may be a potential topic for discussion, and probably a question other students would like to know the answer to as well.
 

What advice do you seasoned ODs wish you were given before you graduated? What do you students feel you need to learn more about?

Update Your Optometric Skills-and Revive Your Professional Passion

It is easy to look at continuing education as a chore rather than as an opportunity. The increasing ability for ODs to provide medical eyecare is one of the most exciting developments in our profession. Learning new minor surgical and laser techniques and other skills allows you to participate in the profession’s expansion of scope.

As you acquire new skills or build on the ones you already have, keep in mind what you can gain by sharing that knowledge with others. You can do that by guest lecturing at an optometry school, getting on one of our profession’s speaker bureaus, submitting lectures at AAO or AOA, participating in research like clinical trials and writing articles. Another great way to stay current in the profession, share your skills and make connections with professional peers is by creating e-mail groups and groups in your community to discuss optometry issues.

We have a responsibility to offer our patients the best in care. We can’t do that if we aren’t up to date on the latest and greatest breakthroughs and techniques in our field. We also do ourselves a favor by proactively building our expertise and skills, as the more you know about what’s new in optometry, the more you realize how much the profession has to offer you as a practitioner. Optometry is a lot more fun if you find diverse ways to stay involved and keep learning.

How do you keep your optometric skills current? And how do you share that knowledge with others in the profession?

Profit with a Specialty: Vision Therapy

Vision therapy is a profitable specialty that brings families into your practice—to stay. Here are key steps to build that specialty. When your office offers vision therapy, you provide a vital service to your community. You also gain a niche with word-of-mouth referrals from patients whom you have helped and referrals built  from colleagues as well as other professionals including: optometrists, occupational therapists, educational psychologists, speech and language pathologists, schools and teachers.

Potential for Significant Patient Volume

Many of Your Children Patients Have Undetected Vision Disorders

Studies show vision to be a major contributor to what children learn in a classroom.  Therefore, undetected and untreated eye and vision disorders in children can significantly impact their schooling. According to the American Optometric Association, 1 in 4 children suffers from vision problems. Vision disorders, such as amblyopia and strabismus can not only result in vision loss, but in low self esteem. Children with disorders such as convergence insufficiency additionally may develop delayed reading and poorer outcomes in school. These staggering numbers mean that if optometrists are seeing children and families in their practice, then they are already seeing these visual difficulties. The question to ask yourself: Are the children in my practice being treated and managed to the highest standard of care?

Build Relationships with Local ODs

In addition to generating referrals, relationships with local ODs are necessary if you focus solely on vision therapy. Appropriate lenses and/or prisms are often an important part of vision therapy treatment. Contact lens fittings and medically based care is referred to a primary care OD.

Get Patient and Parent Buy-In

Patient compliance is a vital component to vision therapy. To get total patient and parent buy-in you must educate parent and child about the value of the therapy, including the goals you are all working toward. For example, you might explain how the difficulties the child is having in the classroom ties to the specific activities you plan to do in the office and the kind of improvement that can be expected. It helps to paint a picture of what the child’s classroom performance could look like if the goals you, the parent and child set are realized.

Consider Certification

While it is not required before starting a vision therapy program, it is important to mention that COVD offers optometrists and vision therapists the opportunity to become certified in vision development and vision therapy. The Board certification process includes a rigorous evaluation of the eyecare professional’s knowledge and abilities in providing developmental and behavioral vision care for patients.

To Get Started: Educate Yourself

The most important investment you can make in a vision therapy practice is to attend seminars and catch up on the latest literature about VT. The College of Optometrists in Vision Development (COVD) and the Optometric Extension Program Foundation (OEPF) both have peer-reviewed journals and continuing education available. OEPF provides an excellent clinical curriculum. The first two courses will have any OD up and running on diagnosing and treating basic skills cases with a structured vision therapy program. You also can educate yourself by tapping the services of a practice management consultancy that specializes in vision therapy such as the one I used, Expansion Consultants.

Make Instrumentation Investment

The investment in instrumentation can be easy on a budget. Knowing the types of cases you will be treating will help dictate the instruments needed.

Charge Per-Visit Basis

The average treatment time is about six months, but patients can be in vision therapy anywhere from about three months up to a couple of years, depending on the severity of the problem. Parents are presented at the beginning of treatment with a summary of expected fees based on the estimated treatment time. Treatment time can vary based on a multitude of variables, including compliance, attendance, home life, and the developmental abilities of the child. Estimating treatment time becomes easier with experience.

Code for Vision Therapy–When Insurance Covers It

Currently, coverage for vision therapy is limited. In fact, there is not a procedure code that precisely describes the procedures performed in a typical vision therapy session. The closest code is the orthoptics code – 92065. Since there is no single code to describe vision therapy at this time, every doctor must decide how to best bill the session based on the procedures that were performed.

Prescribe What Patient Needs, Despite Limited Coverage

As optometric physicians, it is our job to recommend the most appropriate treatment for each patient. Often, doctors will try other options, such as pencil push-ups, before recommending the most appropriate treatment, because they are concerned the patient may not be able to afford it. But in many cases you are doing the patient a disservice by doing that because research has shown that the most effective treatment for binocular vision disorders, such as convergence insufficiency, includes office-based vision therapy with home reinforcement activities.