Promoting practice growth by investing in optical

One of my friends told me last year he was happy he has the latest OCT because he found a subtle macular hole in 1 patient. I asked him, “How many other patients did you find pathology in using your OCT?” He responded by relating a few other interesting ocular pathology cases.

I asked him, “Do you think it was a good investment to spend $70,000 on an instrument you find significant pathology with only a few times per year, especially when that pathology is going to have to be referred to a retina specialist for treatment?”

Retail role of the profession

I want to be clear: I believe optometrists are the front line when it comes to comprehensive eye care, and that includes diagnosing and treating pathology. I believe good instrumentation and clinical acumen are critical.

However, I sometimes wonder why, in the rush to build the medical model, so many of my colleagues seemingly abandon the retail aspects of our profession. Many ODs seem to want to forget or diminish that our historical contribution to vision has been mainly centered around the correction, refractive, and binocular vision function and development.

According to Essilor’s MBA report,¹ median revenue sources for independent optometry practices are as follows:

• Prescription eyewear: 43%

• Eye exams: 22%

• Medical eye care: 17%

• Contact lenses: 16%

Medical role of the profession

This report states that these percentages have stayed fairly stable over the past 6 years, with medical eye care having a slight increase. These statistics indicate that nearly 60% of the typical practice’s revenue is based on product sales.

Some other interesting numbers on eye disease, according to a 2012 Prevent Blindness America report:²

• 8 million Americans over 40 have diabetic eye disease

• 2 million Americans over 50 have macular degeneration

• 24 million Americans over 40 have cataracts

• 3 million Americans over 40 have glaucoma

This means a total of 37 million out of a population of 313 million have these serious eye diseases, or about 12%. Add in minor trauma, contact lens overwear, conjunctivitis, and other acute conditions, one could argue that 15% to 17% of the population will have a medical eye problem in any given year. Even if we allow for statistical variances, the incidence of eye disease and pathology is less than 20%. Which means, of course, that over 80% of the population needs a good ocular health exam, an accurate refraction, and, for many, excellent vision correction products.

Optometrists are often the primary care providers for many patients with ocular pathology, such as:

•  Acute conditions, such as red eyes and contact lens overwear

•  Establishing a baseline and tracking the progress of diabetic’s vision

•  Establishing a baseline and tracking the progress of glaucoma suspects

•  Diagnosis and treating glaucoma patients

•  Diagnosing and referring vitreous and retina disease

•  Diagnosis, referring, and comanaging patients with cataracts

Focus on optical

However, I wonder if we, as a profession, are spending too much time and money on a relatively small part of our core businesses. Comprehensive eye examinations, refractions, eyewear, and contact lenses constitute over 80% of the revenue in most independent general optometry practices.

Independents often comment on the growth in both the numbers and revenue of optical retailers. I believe it is important to keep in mind these companies grew because they have focused their efforts on the marketing and selling of glasses and contact lenses-vision correction products patients (customers) use every day.

If one analyzes the majority of patients entering an independent optometrist’s office, one will find that most need a comprehensive vision health exam, an accurate refraction, and appropriate vision correction products, whether that is glasses and/or contact lenses. I believe it is important that when an IECP analyzes his practice, he realizes where most of his resources go. This is often heavily weighted toward the less than 20% of the practice that involves medical eye care.

Finding potential for growth

I do not mean to imply that medical eye care is unimportant. In fact, it is critical that we provide our patients with the peace of mind that their vision system is healthy or the threats are addressed appropriately. But, consider your business model and find the most potential for growth. This will likely be in the retail optical and contact lens portions of the practice.

How can we, as independent optometrists, do this?

The first step is to realize there are 2 parts to an optometric practice: professional eye care and retail optical. By separating one’s mindset for these 2 vastly different aspects of vision care, one can start to treat them as synergistic but separate entities.

I recommend the independent optometrist use this approach:

• Understand that your professional training does not prepare you for running a retail store. Not only is the skillset different, so is the mindset. Retailers think about color schemes, merchandizing, lighting, product placement, pricing models, the shopping experience, and many other aspects of retail success. This is not a natural thought process for most professionals.

• Look at the demographics in your retail trade zone. What are the income levels? What stores do they frequent? What are their shopping patterns?

• Research your competition. Who are your closest competitors? What makes them successful? Have you personally shopped them? (If they are chains, go to a location farther away so you won’t be recognized.) What is their pricing model? What makes your optical different?

• Decide on a model based on the above information. How will you make the experience in your practice unique and memorable? Business experts call this your unique selling proposition (USP).

• Find the right vendors to support your model and USP. There are lots of suppliers of frames, lenses, contacts, supplies, displays, fixtures, and furniture for our industry. Spend some time at trade shows perusing what is available. Make sure the suppliers you choose are the right ones for you.

• Consider a remodel or just a remerchandising of your optical display area. Successful retailers update their selling environment on a regular basis. Sometimes this is a complete overhaul. Other times it is simply changing a layout, moving merchandise, or updating wall displays and point-of-sale material. Independent optometrists should not be caught in the “remodel once every 20 years” syndrome.

I believe independent optometrists have to provide excellence in both areas of their practices-the professional side and the retail side. In recent years, it seems like many of my colleagues have emphasized the medical model while neglecting the selling of vision care products, such as glasses and contact lenses. While we should never overlook our responsibility to provide quality eye care for our patients, we should not ignore the selling of eyewear and contact lenses to those patients who need or want them.ODT

References

1. Key Metrics: Assessing Optometric Practice Performance. Management and Business Academy for Eye Care Professionals (2012). Available at: http://www.mba-ce.com/data/sites/1/paa_keymetrics_2012_lr.pdf. Accessed 02/23/2014.

2. Prevent Blindness America. Vision Problems in the US. Prevent Blindness America. 2012. Available at: http://www.visionproblemsus.org/. Accessed 02/23/2014.