Optometric Management Tip # 525   -   Wednesday, March 21, 2012
In-office Labs Offer Real Benefits

I'll admit that in-office finishing labs don't make sense for every practice, but I believe many practices that currently don't have one would find many advantages. The pros far outweigh the cons. Let's take a look at lab equipment technology today and see if it offers benefits for your practice.

Reduce cost of goods
There are several excellent reasons to own an in-office optical lab, but this is at the top of the list for me. First, let's be clear that the cost savings of doing your own edging goes far beyond the rather small edging fee charged by your wholesale lab. There is also a large difference in price between stock uncut lenses and surfaced lenses. In many cases when a busy optometric practice sends an order to the lab for a simple pair of single vision lenses, the lab will custom make the lenses for that job. Stock uncuts are also available in that Rx at a much lower price. When you combine the savings you get for stock uncuts with the edging price, you can save a lot of money on every job you make in house.

You can get stock uncut lenses in a wide variety of materials and designs, including CR-39, polycarbonate, Trivex, high-index, and Transitions. You can also buy stock uncuts with a very high quality, name brand, antireflective surface that is factory applied. These lenses are easy to edge with the AR in place and the quality and durability is as good as any custom AR lens, in my experience.

Stock uncut lenses are mostly single vision lenses, but that still represents a large quantity of eyeglass orders in most practices. You can certainly edge progressives and bifocals that are surfaced by your wholesale lab if you wish, but starting with single vision makes perfect sense to me.

Fast service
I'm generally not happy when eyeglasses take two weeks to make and yet that seems to be the norm more often these days. In defense of wholesale labs, I realize that time is needed for specialized lens designs, the AR process, quality control, and shipping both ways plus frame availability. Patients love it though when you can use the frame you have in stock, pull the lenses from your inventory of uncuts and have the finished eyeglasses ready in one or two days!

I love having control over more aspects of our service and product. Having your own lab allows you to step up when you have a problem job and make the patient happy, even if it is just a temporary pair of glasses to hold them over until the more complex job is ready. At the low cost of stock uncuts, you can be quite the hero when you need to be.

Use staff time better
My in-office lab now has a dedicated staff, but prior to that I often had staff members do lab work during the not so busy times that exist in all offices. Rather than have your office closed some half days or full days during the week, you could hire more staff and keep them busy with lab work and dispensing visits. This expands your services and improves patient flow on your other busy days. Many practices could do the single vision lab work with their current staff by keeping them busier during the down times.

Keep in mind that edging technology today has advanced to the point that it is quite easy for anyone with some optical experience to make perfect lenses very quickly. The sales reps for the major lab equipment companies would be happy to demonstrate an edger in your office and train your staff after you purchase or lease.

Project your costs and savings
A rough rule of thumb for when it is financially advisable to have your own lab is an average of five pairs of glasses per day that you can process. But a better way is to do the math yourself. Start by looking at some lab invoices for single vision jobs and write down the actual charges. Then call your lab or a national uncut supplier and get the prices for a pair of stock lenses that match the design of the invoiced lenses. Keep in mind that you would get a better price on a bulk stock purchase (maybe 100 pairs) compared to one pair. Create a weighted average savings across all lens types that you use (include some AR jobs). Determine how much money you can save by multiplying the weighted average savings by the number of jobs you can make per month.

The next step is to determine your cost of operating the lab. The lens cost was already figured into your savings per job above, so you have the monthly lease payment on the equipment and your prorated staff time. One could make the argument that if you need no additional staff than what you have now; there is no increase in payroll. There is some use of electricity, office floor space and wasted product, but it is negligible.

If the cost savings per month exceeds the monthly equipment lease payment, I'd proceed with installing the lab. The other benefits of owning a lab make the decision even more favorable and after the lease is up, you will own the machine and profits really increase!

Best wishes for continued success,

Neil B. Gailmard, OD, MBA, FAAO
Chief Optometric Editor, Optometric Management