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 By Neil B. Gailmard, OD, MBA, FAAO, Editor July 14, 2004 - Tip #130 
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In-office optical labs offer more benefits than you think


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It seems that the popularity of in-office optical labs for edging and finishing lenses is dropping in popularity. More and more doctors who own practices feel like operating a lab is just too much hassle, especially more recent graduates who had little or no training in ophthalmic optics in optometry school. The ever-expanding curriculum is squeezing out some of the traditional gems of our profession, like optical lab work, dispensing and practice management. This is understandable, and I would never advocate stifling our growing scope of practice, which deserves a great deal of our attention. But, I guess I'm not willing to say I can't do it all.

I think optometrists who elect to send out all their optical lab work are overlooking a huge secret to practice building. Even if you think you aren't interested in operating an in-office lab, you owe it to yourself to take a second look.

Benefits

The obvious and most-cited benefits of doing your own lab work are speed of delivery and increased profitability. These are significant points, and I find them to be true, but there is really more to it than that. The biggest benefit is maintaining control over more of the services you provide.

Let's first recognize the major importance of optical dispensing to most optometric practices. Even if the practice has a great emphasis on ocular disease, many patients still need refraction and optical services. Dispensing can always run concurrently with clinical services, without a doctor, so any practice can offer both. And the financial return of the dispensary is so big, even compared to the primary care work of the doctor, that it deserves our attention.

Once you've decided to have an optical in your practice, achieving excellence in that area is extremely important to practice growth and success. Optical dispensing can't appear to be a sideline. And many doctors actually try to de-emphasize their optical in order to make their professional services look like the strong point. That is a big mistake. Patients understand eyeglasses and retail far better than they do medical care, and they generalize one department to the whole practice. If they receive poor service in the optical, they believe the primary care aspect also suffers. The service that patients experience in your optical department, and the resultant eyewear they will use for years to come, are major factors in the reputation of your practice.

Getting back around to the benefits if in-office labs -- the improved control over the product allows your practice to have a better optical. Better control means fewer disappointments and better flexibility to fix problems when they do occur. Depending on other suppliers, which will invariably let you down, hurts your level of service.

Here are few other points to consider:
  • Patients don't complain about slow speed - but they love it when it's fast. Don't be lulled into thinking that your patients don't mind glasses that take two weeks. And if something goes wrong it can become 4 weeks!
  • Most offices get paid when materials are dispensed, and if you can speed up the delivery for a large number of optical orders, practice cash flow is greatly improved.
  • ODs should never do lab work in my opinion - and I know many do. It's a false economy. It's not recognizing the true value of the practitioner. Even if you don't have patients to see, or if you're edging after hours, there are much more valuable things you could do.
  • Optometrists aren't trained in business administration, but we must run our opticals as a successful business model. Customer service is the biggest factor to consider.
  • The only example I can think of where it is not smart to own an in-office lab is a practice that is heavily dependent on vision plans that require the use of approved wholesale labs. Obviously, these practices have very little lab work that can be done.
Economics
  • Lab equipment and staffing are basically free for most practices. How? Look at your lab bills (lenses - not frames) and add them up for one month. I'll bet it's over $5,000 per month - maybe well over. That monthly expense represents what you have available to spend on leasing new lab equipment, buying uncut blanks and paying a technician to cut and edge lenses. Most practices can break even immediately, and enjoy increased profits when the equipment is paid off in about three years.
  • A pair of uncut single vision CR-39 lenses costs about $4.00, and a technician can edge and insert them into a frame in about 10 minutes. What are you paying?
  • The lab technician may be able to serve multiple duties, depending on your lab volume. Many opticians can add lens fabrication to their present skills, and many lab techs can also dispense and do frame selection. Some offices do lab work only a couple days per week, on slower days when the doctor is not seeing patients.
  • Increase profit by reducing costs. The average cost of goods sold in optometry is about 30% of gross revenue. If you could save 5% of that number and put it in your pocket - would that be good? $500,000 X .05 = $25,000/year.
Lab equipment

Technology has made lens edging easier than ever, so it requires less training to produce perfect lenses. Tasks such as lens blocking, frame patterns, safety beveling, edge polishing and edge grooving are all automated. You can offer many lens designs through your lab - such as single vision lenses with antireflective coating already applied to the blank, poly, high-index and photochromics. While you can't stock finished uncut is multifocal, you can buy surfaced uncuts and edge them. Getting started is easy; you already have a lensometer and maybe a tinting unit and some optical lab space.

We were taught in school that surfacing was really not practical for a doctor's office. Baloney! Think big and if you are already successful with edging, and have a strong volume of lab work, take the next step and acquire surfacing equipment, such as a computerized layout blocking system, generator, polishing machines and back surface hard coating machines. It's expensive, but it brings you to a whole new level of cost savings, and it will pay for itself in larger practices. Surfacing allows you to move into bifocal and progressive lens manufacturing, in all your favorite brands, and since you only stock base curves rather than individual lens powers, your lens inventory is not that large.

There are other new technologies that allow doctor's offices to fabricate the actual prescription lens, such as lens casting. A good place to start your education into all this is at a major eye care convention.


Best wishes for continued success,

Read Past Tips Neil B. Gailmard, OD, MBA, FAAO
Editor, Optometric Management Tip of the Week


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Send questions and comments to neil@gailmard.com.

Dr. Gailmard offers consulting services to eye care professionals through Prima Eye Group; information is available at www.primaeyegroup.com.

Please Note: The views expressed in Management Tip of the Week do not necessarily reflect those of the sponsor.

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