What is the Future of the Optical?
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What is the Future of the Optical?
In the face of declining revenues from the optical dispensary, there is hope.
RICHARD S. KATTOUF, O.D., D.O.S.
Q As a private practice owner for more than 20 years, I have noticed a gradual decline in net income from my optical department. Many of my colleagues share this experience. Can you share the causes and discuss the future of the optical in private practice?
Dr. L.R. Widen
A: In the early 1970s, private practice O.D.s made large profits on contact lens materials. Profits were so high, that many O.D.s sold contact lens service agreements to lower the cost of replacement lenses to the consumer. The profits on the service agreement and materials spelled high net.
That ended during the 1980s as the rise of commercial optometry, managed care vision insurance and later, Internet ordering of contact lenses signaled the "beginning of the end" of profits on contact lens materials.
The rise in TPA
During the same time period, most states passed therapeutic pharmaceutical agent (TPA) legislation, allowing O.D.s to treat eye disease by prescribing certain pharmaceutical agents. By allowing us to treat eye disease and bill Medicare and major medical insurance companies, we found a substitute for the income lost. Income didn't go down — it stayed steady due to the new medical profit center.
History is repeating itself as discounters — both on the Internet and in brick and mortar facilities — compete with private practice optometrists for spectacle sales.
Online spectacle ordering may become even easier for consumers, as one company recently developed a device that allows consumers to measure their own pupillary distance (P.D.). This is important because while Internet-based sellers require the consumer's P.D. measurement, most state boards of optometry do not require the O.D. include the P.D. as part of the written prescription.
This example illustrates how the Internet marketplace is crossing what once were insurmountable hurdles.
Frame companies favor Internet ordering because it saves them money in manpower and raises profits. I suspect some spectacle lens manufacturers support the Internet concept for the same reasons. These Internet companies place substantial dollars in advertising TV and on satellite radio.
Life after optical
My prediction is that within five years, private practice O.D. S will have a very small optical department, or none at all. What action should you take in light of declining optical revenues? The answer is: Create new profit centers, or expand existing ones. This would include recommending and selling nutraceuticals, maximizing your medical license, getting your medical fee structure to ophthalmology's level and incorporating optometric specialties, such as low vision, orthoptics, developmental vision, computer vision or corneal refractive therapy in your practice.
Our loss of contact lens material revenues should have taught us a lesson: Nothing can replace lost optical income, unless you create it.
Those private doctors who shy away from materials will be perceived as R.D.'s — "real doctors." All medical professions are fee for service, not materials. Optometry has always had the material component, but with the changes in optical dispensing that I've described, our image will improve among consumers. OM
DR. KATTOUF IS PRESIDENT AND FOUNDER OF TWO MANAGEMENT AND CONSULTING COMPANIES. FOR INFORMATION, CALL (800) 745-EYES, OR E-MAIL HIM AT ADVANCEDEYECARE@HOTMAIL.COM. THE INFORMATION IN THIS COLUMN IS BASED ON ACTUAL CONSULTING FILES.
Optometric Management, Issue: October 2010