A Focus on High-Tech Refracting
A Focus on High-Tech Refracting
Are these systems profitable, or is their marketing purely promotional hype?
Scot Morris, O.D., F.A.A.O.
First, thanks to your responses, this column has quickly become a forum for readers to air their concerns and questions about technology. Acting on your feedback, I can answer your concerns and explain some of technology's perceived mysteries. For instance, Dr. Williams, an East Coast O.D., asked me to discuss the truth behind the marketing hype (ie, greater efficiency and financial gains) that often accompanies new diagnostic technology.
Granted, I constantly try to push the technology envelope, but I often ask myself: If what I do works, then why do I need new technology? Can I afford it? Is my return on investment really worth the change? Will I be able to use it? What will staff and patients think?
The $60,000 question
Let's take refracting systems as an example. The latest and greatest costs roughly $60,000. That's a huge investment. As a decent refractionist, why would I pay for something that costs nothing to me now? Granted, I tire of the “which is better: one or two?” But c'mon—$60,000?
Let's analyze the real cost by dividing $60,000 through three years. (I am using three years for the purposes of financial analysis only—the technical lifespan is closer to a decade). We arrive at a cost of $1,667 per month ($60,000/36), which is easier to swallow. Further, if we see 15 patients a day for 20 days a month, the cost per patient visit equals about $5.55.
But, why pay $5.55, you ask. Well, this system provides the measurements necessary to prescribe premium free-form progressive addition lenses (PALs), which are reimbursed at a rate of about $20 more per lens than standard PALs.
Using the numbers cited (15 patients/day x 20 days/month x 36 months), we'll see 10,800 patients through the device's lifespan. Assuming a meager premium lens capture rate of 25%, we have the potential to increase revenue by $108,000 through three years (10,800 patients x 25% x $40 per pair). In addition, we can show patients the differences between their current glasses, their new glasses and over-the-counter readers with a click of a button. This capability alone should increase our conversion rate to more than 25%.
Will the new system slow you down? Our automated refracting system has cut the time for each exam by four minutes, creating an additional 80 minutes per day, or three additional patient slots at a rate of $250 per patient. So, I've increased revenues by $750 a day, or a maximum of $187,500 per year ($750 x 20 days/month x 12)—three times the total cost of the machine.
Don't forget about the “wow” factor. My system combines auto lensometry, autorefraction, aberrometry, topography, manifest refraction and final refraction into a four-foot by six-foot space. And it refracts to 0.05D, which is instrumental in the production of free-form lenses. (I'll discuss refraction and lens technology in an upcoming issue of OM.)
What's your reason?
So I ask: What is your reason not to buy refractive technology? As illustrated, it pays for itself in less than a year, increases efficiency, and provides the “wow” factor. It may even help improve the sale value of your practice, but we'll get to that in the next article. In the mean time, send me your thoughts and questions at email@example.com. I will post a summary of the answers in my July column.
Next month, we'll focus on the advances in optical dispensary technology. OM
DR. MORRIS IS THE DIRECTOR OF EYE CONSULTANTS OF COLORADO, LLC, AND MORRIS EDUCATION & CONSULTING ASSOCIATES. E-MAIL HIM AT SCOT@OTS-CONSULTANTS.COM.
Optometric Management, Issue: May 2011