Are GP Lenses Profitable?
Are GP Lenses Profitable?
BY CLARKE D. NEWMAN, OD, FAAO
One concern when prescribing GP lenses is whether or not they can be profitable. The perception is often that GP lenses are difficult to prescribe, which results in many more lenses being used to achieve success. Further, the perception that GP lenses are more expensive to begin with makes some people hesitant to go down that path.
However, there are strategies you can employ that can enhance the profitability of GP contact lens fitting.
Setting Material Fees
One of the first things you have to do when fitting GP lenses is to set your material fees correctly. One of the advantages of GP lenses is their custom nature. These lenses are not available from every supply chain. The limited availability decreases the price pressure and gives you just a bit more latitude to establish a rational fee.
The first thing you want to know when setting your fees for GP materials is your cost, both warranted and non-warranted. Always set your fees based on the warranted cost.
Second, as we discussed several months ago, you need to know your chair costs. Remember, your staff is worth roughly one-half of the practitioner's chair cost. I budget one-quarter of an hour of staff time into the fee for each GP lens. This amount covers the cost of ordering, receiving, verifying, dispensing, and returning lenses.
Then add the profit that you think is appropriate. The cost of the lens and the staff cost is basically fixed. The profit is the variable. For example, if you prescribe a GP lens that costs $35 for a non-warranted lens and $45 for a warranted lens, and your chair costs are $175 per hour, then the fixed cost of the lens is: $45 + 0.25($175/2) = $66.88. You could round that up to $70. If you want to make a 30-percent profit, then the lens cost to the patient is $91.
It is not advisable to increase the costs of the lens beyond that. You want to make your profit in your professional fees. You should be rewarded for what you do, not for what the lab does.
Overcharging for lenses almost screams, "Follow ups are free!" It greatly devalues what you do. Don't tell patients that the contact lens is the important thing and that you are ancillary. If your patients think that your skills are ancillary, then you are expendable, interchangeable, etc. It is difficult to build loyalty that way.
Instead, if you set your material fees in a reasonable and rational manner, then you are telling your patients, "It is my skills that are the difference in your outcome, and the lens is incidental." That builds loyalty, respect, and referrals.
Deciding on Warranty Programs
The next major decision is what warranties are best. If you have two bifocal GP lenses that work about the same, and one vendor offers a significantly better warranty program, then you and your patient are better off using the lens with the better warranty.
It is very important to tell patients about specific warranty programs for the type of lens you plan to use. It is important to communicate to each patient how difficult it is to prescribe that lens and that, if necessary, the patient may have to pay for another lens if you order more lenses than the warranty allows. In my practice, I tell patients that if I get charged, they get charged.
It is better to be up front about all of these fees to avoid problems later. CLS
Dr. Newman has been in private practice in Dallas, Texas since 1986 specializing in vision rehabilitation through contact lenses as well as corneal disease management, optometric medicine, and refractive surgery. He is also a consultant or advisor to B&L.
Contact Lens Spectrum, Issue: October 2009