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.

Vision Impact Institute

Essilor, an international producer of ophthalmic optics, launched an organization dedicated to socio-economic-related vision issues: the Vision Impact Institute. Today’s most widespread disability, impaired vision, affects 4.2 billion people throughout the world, of whom 2.5 billion have no access to corrective measures.

In its quest to achieve better vision for all, the Vision Impact Institute will act as a global connector of knowledge, data and solutions. The Institute’s mission is to raise awareness about the socio-economic impact of poor vision and to foster research where needed, encouraging measures in the field of corrective vision. It will work to ensure that poor vision and the economic implications emerge as a global challenge.
This public health issue has substantial economic consequences at both an individual and collective level: $269 billion in productivity is reportedly lost every year because of impaired vision, even though all the required solutions (eye exams, corrections) are available.

The underestimated economic impact of impaired vision

While one of the most widespread disabilities in the world, impaired vision and its cost are still underestimated in developed and emerging countries: 30 percent of young people in the world under the age of 18 reportedly suffer from uncorrected refractive error, which is often not diagnosed due to lack of awareness or access to care. This proportion rises to 33 percent in the labor force, 37 percent among elderly people and 23 percent among motorists.

The economic impact is significant globally: around $269 billion in productivity is reportedly lost every year, including $50 billion in Europe, $7 billion in Japan, and $22 billion in the United States–even though there are solutions to correct most of these impaired vision cases.
The annual global cost of productivity loss corresponds to providing an eye exam for half of the current world population. Thus, simple measures might drastically reduce the economic consequences of impaired vision and also the social ones, even though the cost, level o f access to care, and awareness differs by country.

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?

Partner with a CL Distributor to Make Reordering Convenient and Simple

Use a contact lens distributor to maintain your inventory and streamline patient reorders. The payoffs: Less work for you, and you retain valuable CL patients.

You may use ABB CONCISE’s contact lens distribution services and be able to offer enhanced contact lens services to patients. You may decide to use a distributor to reduce the number of individual contact lens companies you deal with. That way you can have one bill for all of the contact lenses that you order. The key advantages of ordering through a distributor are: enhanced customer service, availability of all of the contact lenses that you fit, fast turn-around time (if the order is placed before 3 p.m., Monday through Thursday, you can have the lenses in your office the next day), your reps from all of the contact lens companies receive “credit” for the orders you place through ABB CONCISE and you always have trial lenses available.

In turn, using the full range of services of a contact lens distributor allows you to better the patient experience:

Set Up CL Patients to Order on Practice Web Site

By setting up all of your soft contact lens wearers to order their contacts on your web site via ABB CONCISE’s online contact lens ordering system Yourlens.com, you would be reducing your ABB CONCISE bill, and increasing the size of the check you will receive mid-month, which represents “profit” on the sale of contacts from your practice. There is a Yourlens.com a direct link on our web site so patients can order online themselves. You may also have a link to Yourlens.com on your Facebook page. That way you can make sure that every new and existing contact lens patient is set up to order off your web site, and you can send a confirmation e-mail to them while they are still here in the office. 

Ordering via Distributor Web Site Enhances Compliance

You can encourage patients to order their year’s supply or select the “auto ship” feature when placing their contact lens order to ensure compliance with the wearing and replacement schedule of their contact lenses. The key advantage of Yourlens.com is the ease of use. You should be able to better serve your patients by not only providing them with comprehensive eyecare (evaluating the fit of their contact lenses and the health of all of the ocular structures,etc.) but also educating them on the importance of the proper care and replacement schedule for their contacts, and sending them a link to order their supply. In many cases, patients order while they are in your office from their smartphones or as soon as they get home.

Market Contact Lens Services Using Multimedia

The marketing of these CL services may be done in your print ads in U.S. 1 newspaper and Town Topics in a syndicated column that appears every other week in both papers, and through e-mail blasts with Websystems III at your office. 

Optimize Relationship with Distributor Rep

Your ABB CONCISE rep, should make him/herself available via phone, e-mail and regular visits to your office. Reps can put together laminated sheets that you can use as a tool to educate patients about the savings they will realize when they order a year’s supply of their contact lenses. The quarterly report of contact lenses that ABB CONCISE compiles would help to keep you cost-competitive with your online pricing. In addition to these reports that are produced for you,you are able to go online to the ABB CONCISE web site to track your contact lens inventory finances yourself-making the service a win-win for both you and your patients.

How Will the Economy Affect Your Next Eyeglasses Purchase?

The economy seems to make no difference in the eyewear buying habits of 30.8% of consumers, who say they will not change their buying behavior because of the state of the economy, according to The Vision Council‘s VisionWatch Economic Situation Study: April 2012. On the other hand, 28.8% say they will use their current eyeglasses for a longer period of time and hold off on purchasing new eyeglasses. Some 25.3% say they will search for the best value when shopping for prescription eyeglasses while 21% say they will continue to use their old frames and only purchase new lenses. Some 5.9% say they will use the internet to purchase their next pair of prescription eyeglasses while 8.8% will try and save money by purchasing multiple pairs of eyeglasses at the same time. Some 19.1% say they will spend less than they spent in the past on the eyeglasses they end up buying.

What are the strategies we want to accomplish with our patients?

1.  We want to provide our patients the best care in services and materials.

2.  We want to provide for all of our patients’ needs (e.g.: indoor, outdoor, computer, safety).

What tactics should we use to achieve our strategic objectives?

1.  Use a lifestyle history questionnaire to identify all of our patient’s needs.

2.  Prescribe an optical solution for each patient need where appropriate focusing on premium products.

3.  Work with patients to prioritize the solutions.

4.  Offer a multi-pair discount to increase the value of multiple pair sales (experience shows that significant movement does not occur until you offer between a 35% to 50% discount).

5.  Have clear visuals in your optical shop that you offer solutions for all price points.

6.   Explain to patients what they lose in benefits to their health, safety and function when they choose lower price points (focus on benefits, not features).

7.  Make sure at least 20% of your frame board is dedicated to sunwear.

8.   Review your frame board mix. Compare the number of frames you have on your board in each price point to the number of frames you actually sold last year in each price point. Remix your frame board to better reflect your strategic objectives and the reality of your practice.

9.  Make sure your office offers payment solutions such as CareCredit and PayPal.

10.  Make sure your patients with frame coverage on their vision insurance use it–it should be the rare exception that these people order lenses only.
Sit down with your staff today and implement a plan of action to help your patients get the best care for all of their needs.