Technology: Say Bye-Bye to Benchmarks; Hello to Business Information

business intelligence

Say Bye-Bye to Benchmarks

Business intelligence software provides the answers needed to make informed business decisions.


Business decisions that yield successful outcomes are based on in-depth related data. Business intelligence (BI) software provides such data. This is why several industries, including optical and ophthalmic businesses, employ BI software. In fact, two frame companies, in particular, knowingly disrupted their sales to use BI information to gain a long-term competitive advantage.

As your practice is a business and, therefore, requires financial success to thrive, you should be basing your business decisions on data from BI software as well. Yet, some practitioners are still using the long-standing gross revenue per exam (total new business [or collections] per exam with refraction) and frame capture rate (number of frames sold per exam with refraction) benchmarks to guide their business decisions.

Here, I dispel the importance of these benchmarks and discuss why you should focus instead on BI-derived data.

Dispelling the benchmarks

Today, the average single-location practice has a gross revenue per exam of $316. Gross revenue per exam is made up of many factors. For instance, let's say your practice is in the top 20% and generates $400/per exam. This benchmark may lull you into going into cruise mode or make you think you've almost reached your potential. Now, take the number a step further. How is the $400/exam split between your two profit centers: clinic and optical? It could be $300/exam in the clinic and $100/exam in the optical or visa versa. In today's marketplace, this differential is crucial to understanding your business.


Similarly, the average frame capture rate for a single-location practice is less than 60%. Does this benchmark tell you anything specific about your business? The answer is “no.” And therein lies the problem: These and other benchmarks don't provide us with the specific answers we need to determine the action steps required to increase profitability.

BI software enables you to take into account your optical gross revenue/exam (average revenue generated from the sale of frames and lenses per refraction) and clinic gross revenue/exam (average revenue generated from all doctor's services and contact lens materials) — a practice's key performance indicators (KPIs) — by vision plan. Such information allows you to narrow your focus and, thus, make clear-cut choices about how to increase practice profitability.

A closer look

A practitioner accepts a vision plan that lowers their reimbursement to less than $50 for exam, frame and lenses. At first glance, we think, “Why would a practitioner accept a plan that provides such little reimbursement?” It doesn't matter if you're reimbursed $20 or $100 for a particular service, what matters is the impact of the entire interaction, including (sometimes, more importantly) the patient out-of-pocket payments. After using BI software to make their decision, the practitioner found that the total interaction with that patient was higher in this plan than in many of those plans that have higher reimbursements. It turned out, that the patient base purchased products outside of the plan more often than other plans. Too often we make emotional decisions by focusing on incomplete information.

Let's look at that less-than-60% frame capture rate. Most practices have higher frame capture rates with patients who have vision plans vs. self-pay patients. No reason exists for a vision plan patient with a frame benefit to walk out of a practice without buying a frame. Even if their prescription hasn't changed, the patient may need sunwear, an occupational or lifestyle frame, or they may want a hip purple frame that catches their eye. Therefore, considering the average practice is made up of 90% vision plan patients, the benchmark capture rate is not good at all. Conversely, at around 60%, four in 10 patients are not taking advantage of a frame benefit for which they're paid.

Something else to consider: Walk-ins. Doctors, particularly those who have practices in high-traffic areas, such as strip malls, tend to think not many people walk in with outside prescriptions. As far as they know, walk-ins are a small part of their business. But they are crucial to take into account.

Golden Rule: One's frame capture rate should be based on vision plan, then doctor in the practice. When we separate out the frame capture rate to include the doctors in the practice, it drops to 51%. You get lured into a false sense of security by relying on the gross view of the numbers.

BI-er beware

If in order to get your BI, you have to manually input or calculate numbers, this could be very time consuming. So, you must balance the cost of time vs. your R.O.I.

Also, it's important to remember that taking action on everything you learn from the data all at once is not possible, and attempting to do so will result in failure. For example, you may find that you have multiple opportunities, such as raising your capture rate with a particular vision plan, growing your AR percentage with another vision plan and increasing your photochromic lens percentage with private pay patients. Each one of these areas requires related training and the sole focus of your optical team. Don't make the most common mistake and try to raise the bar on all three at once.

Instead, you should choose one action item at a time. Focus your effort, and create an action plan for a specific period of time, such as 60 to 90 days. That way, there are measurable goals your team can live up to. If after this time, you find the training has become a habit and you've reached your goals, move on to the next one. On the other hand, if you're still short of your goal, re-introduce the training, and stay focused on the goal. Closely monitor the results before moving to the next action item. Top performing practices set a roadmap of initiatives (See “Strategic Planning,”).

Complete information is power

The biggest business blunders come from making decisions based on lacking or incomplete information. But, every day, business owners are following the same path. Tracking KPIs were nearly impossible 10 years ago, and even five years ago. Those who had their spreadsheets and hours of dedicated time were able to make those decisions, but for most of us this wasn't an option. Today, make sure you have a system that shows you KPIs with a click of a button and gives you the knowledge to grow. OM


Mr. Kestenbaum is co-founder and chief information officer of GPN and co-owner of Optix Eyecare Center in New York. He received his M.B.A. from SUNY Binghamton. He leads the development team of GPN's EDGE online technologies (BI software) and data-based services. His involvement with practices has supported the development of corporate strategies and business philosophies for independents. E-mail him at, or send comments to