Article Date: 3/1/2013

Coding Strategies

Optical Discount Decisions

Should you provide discounts and if so, to whom?

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DOUGLAS K. DEVRIES, O.D.

This month’s column isn’t exactly a coding strategy. That said, because optical discounts, like coding, affect your bottom line, the topic definitely warrants a strategy discussion.

Here’s a look at a few of the questions surrounding this retail strategy.

Should I provide discounts?

If you have priced your inventory for a lower profit level in order to increase inventory sales and, thus, inventory turn, a discount strategy may not be for you.

Providing discounts on special occasions, such as holidays, for trunk shows and open house events, can be very effective so long as these events are not held too frequently. (Remember: The principal goal here is to create a buzz, and you are foregoing a certain level of profitability to increase short-term sales volume.)

Providing discounts all the time (e.g. second pair discounts, day-of-service discounts, eyewear packages) requires you to increase your standard pricing structure to compensate for the given discount and maintain higher profitability levels.

Who do I discount?

In almost every instance, never discount managed visioncare patients. They are already receiving a substantial discount through their plans and your contract responsibilities.

Discounting private pay patients depends on inventory return rate, frame and/or lens pricing and the discount amount. If you provide a discount to these patients, be sure the profitability of private pay is at least as high as your best managed care plan profitability. Also keep in mind: Many practices provide steeper discounts to remain competitive with “walk-in” consumers.

People want to feel they are getting value.

How much do I discount?

Make your discount structures as easy or as complicated as you choose. But, do not make them so complicated that your staff and consumers get confused.

Also, maintaining a certain level of profitability without losing sales volume is the key to determining discount strategies. Typically, practices have one to four discount levels. Evaluate which ones are most effective. It takes a little trial and error and a little creativity, but they will add variety to and make your retail strategies stronger.

How do I make patients aware of discounts?

Publicize discounts through local media (e.g. newspapers, radio), your practice website and online social networks. A caveat: Avoid publicizing standard discounts, such as same-day payment discounts or second pair discounts, to prevent managed visioncare patients from starting an argument.

Consumer psychology

Many people feel discounts are just a way to lessen profitability and don't always lead to increased sales. If you are in this camp, consider this: People are more likely to purchase a product if they feel they are getting value. OM

Scot Morris, O.D., weighed in as a guest columnist this month.

DR. DEVRIES HAS A DEGREE IN FINANCIAL MANAGEMENT FROM THE UNIVERSITY OF NEVADA SCHOOL OF BUSINESS AND IS CO-FOUNDER OF EYE CARE ASSOCIATES OF NEVADA, A MEDICAL/SURGICAL CO-MANAGEMENT REFERRAL PRACTICE. E-MAIL HIM AT DRDEVRIES@NVEYELASER.COM, OR SEND COMMENTS TO OPTOMETRICMANAGEMENT@GMAIL.COM.

CORRECTION: In the January issue’s Coding Strategy, 92071 is a unilateral code, not bilateral. Also, V2599 shouldn’t be used unless no other HCPCS level 2 code correctly describes the lens you’re providing. Finally, do not use ICD-9 codes to justify the fitting of and payment for therapeutic purposes.


Optometric Management, Volume: 48 , Issue: March 2013, page(s): 86