Optometric Management Tip # 434 - Wednesday, June 09, 2010
Optometrists with Little Interest in Optical
Eye care professionals in other countries may have a hard time understanding this, but optometrists in the United States are increasingly disinterested in optical dispensing. It would be reasonable to think that optometrists' primary interest would be in all things optical, but American ODs are very focused on medical eye care and in my experience, they often delegate all aspects of optical dispensing. I think that is a big mistake. In my view, it's smart to delegate the dispensing work; but not the management.
I admit I'm painting with a broad brush here, but it seems to me that many older ODs have grown bored with refraction and optical dispensing and they spend most of their effort on ocular disease and billing and coding. Younger ODs have not received nearly as much optical training as their senior colleagues, so they feel slightly inadequate in optical dispensing. We should be concerned because there are plenty of other folks in the business world who will be happy to take optical off our hands if we are not interested.
In this article, I will encourage optometrists to embrace optical for one major reason: greater net income. You may not be drawn to optical dispensing as an optometrist, but at least be drawn to it as the CEO of your practice. If you currently delegate the management of your optical dispensary, I encourage you to review all aspects of your operations. This is nothing against your optician or optical manager, but by simply digging into it yourself, I'm sure you'll find things you would do differently and you'll find ways to make a lot more money in the process.
Areas to dig into
Here are some factors I believe the optometrist should be knowledgeable about.
- Optical labs. If you find a decent wholesale optical lab and get comfortable with it, most practices will stick with it for years. That could be good or bad. Cost of goods is the single largest expense category for most practices and if you can cut your labs bills by 15%, your net will increase substantially. Of course, trying a new cheaper lab could mean a drop in quality that is not acceptable. Evaluating and changing labs is not an easy decision, which is why the doctor/owner should be involved. Take a look at your options.
- The in-office lab. As you consider your lab and lab bills, talk to manufacturers of lens finishing equipment. You may be smart to bring the work in-house. If you already have an in-office lab, where are your buying your uncuts and what are your paying?
- Frame lines. Bringing in a new frame line creates more work and it's certainly easier to use fewer companies, but there is a very strong reason you should do it. It brings enthusiasm to your staff. Nothing sells like enthusiasm. And your patients will sense that your optical is up to date and always changing. That builds loyalty, referrals and repeat purchases. Picture this: A patient you've been seeing for years is in for her annual eye health exam and your optician excitedly says, “Oh, hi Mary. I'm so glad you're here! We just received our new frame line by Designer Name and there is a style I think is just perfect for you – come see it and try it on for me!” See what I mean? Find out what fashion brands are cool and hip. Which ones offer an elegant look like jewelry? What is a little bit funky and retro? Bring in new lines and drop the ones that are stale.
- Lens pricing. Many ODs have no idea how much their office charges for a pair of single vision lenses in CR-39. And many have never really looked at the prices for their lens packages. How much should you charge for premium antireflective? Checking your actual cost for these options is the first step and that can take some digging. But you really should know. You're probably leaving money on the table.
- Frame pricing. The frame mark-up formula used in most practices has been in existence for years. Most optometrists figure it's fine since it is a mark-up and if the wholesale prices go up, so do the retail prices. But what if the basic formula is out of date? Two and a half times plus $30 is so old school. Frame pricing makes a big difference in profit, even with vision plans when there is a frame overage. Run some examples of what the patient would pay at different price points and see for yourself.
- Delivery time. Is your staff pretty much telling every patient that their glasses will take two weeks? Oh, excuse me, ten working days (that sounds better, but is not really better). Patients tolerate this slow service but they do not love it.
- Suppliers. Do you know your suppliers for eyeglass cases, half-eye readers, economy frames, nose pads and screws, sport goggles, hand-held magnifiers, lens cleaners and cloths, and dozens of other products? You may be able to save money and improve quality.
- Warranty jobs and remakes. Do you know how many “free” optical jobs your practice makes per month? If not, prepare to be stunned. From scratched lenses to incorrect seg heights to broken temples, it adds up to a huge number in most practices. Don't make the mistake of generalizing that it's mostly “free” because the lab covers it. It is definitely not free when you consider the staff time that goes into ordering, receiving, assembling, calling, and dispensing. And your practice is being charged for shipping and handling by the supplier. You could still provide the free remake to patients but charge them a shipping and handling fee. They generally accept it just fine when they are getting free glasses.
How to learn about optical
First, understand that as an optometrist, you already know much more about optical dispensing than you realize. With your education and experience, the basics will come back to you quickly and the new developments will be easily understood.
My best advice for understanding optical is to meet with sales reps in the field. This can occur in your office by appointment, or a crash course can be had by attending a major conference like Vision Expo, SECO, AOA or AAO and visiting the booths in the exhibit hall. Talk to reps from lens manufacturers, frame companies and wholesale optical labs. Listen to them explain their newest products and then ask questions if there is some aspect that is not clear. No question will appear dumb. These optical experts would like to attract your business and they will be happy to discuss their products.
Armed with knowledge, you'll be in a great position to work with your optical manager to revamp your policies, update your offerings, change your price strategy and work with new suppliers. Very exciting stuff!
Best wishes for continued success,
Neil B. Gailmard, OD, MBA, FAAO
Chief Optometric Editor, Optometric Management