contact lens economics
Figuring Out Contact Lens
BY GARY GERBER, OD
It would be unprofessional, unethical and probably illegal for me to write an article about how much you should charge your patients. However, as a business-building consultant, I would be
irresponsible if I didn't mention fees at all. Specifically, I feel a need to address something I've seen in many practices around the United States, namely contact lens practitioners' propensity to work for free -- particularly when it comes to contact lenses.
Historically, professional and product fees for contact lenses have gone through some significant mood swings. In the early days of contact lenses, these fees were relatively higher than "routine" examination fees.
Perhaps because of the novelty and uniqueness of the first hydrogel contact lenses, eyecare practitioners were more comfortable charging patients for their fees than they are now and patients were more willing to pay those fees.
While planned replacement and disposable contact lenses have certainly increased the number of patients wearing contact lenses, the fee structure for lenses has changed dramatically. In fact, I still hear senior practitioners lament, "In the old days we charged $300 for a single pair of contact lenses and we made $200. Now we charge $300 for an entire year's supply and the contact lens companies make all the money!"
While I don't necessarily agree with the math, the sentiment is accurate. The profit from contact lens product fees has been decimated and beaten to a pulp. Be it because of Internet dispensing, mass merchandisers or warehouse clubs, profit margins from contact lenses have dwindled.
An outsider from the business community may have conjectured that as practitioners saw their product margins eroding, they should have instinctively raised their professional fees to maintain profitability. After all, maintaining a profitable business, even if it means raising fees, is how nearly every other business works. But instead of giving you a historical overview and trying to determine whose "fault" all this is, let's instead come up with a solution.
What do Do, What to Do
Only one other revenue stream is available to you as a contact lens practitioner that doesn't involve selling products, and that's your professional fees. Once you recognize this, you next have to come to grips with the fact that you have only two choices when it comes to affecting your profitability:
1. Charge what you're worth and stop giving your time away for free
2. Don't charge what you're worth and continue to give your time away for free
If we can no longer survive on selling contact lenses themselves, then the only thing left for us to do is to sell our time. Compared to other healthcare professionals, and considering the amount of time most of us spend with our contact lens patients, a contact lens patient is usually receiving one of the best bargains in health care! And bargains are great for patients -- but not at the expense of the survival of your own practices.
Compare the services that we offer our patients and the time that we spend on them to those of nonmedical professionals. On an hourly basis, many of us would be financially better off as plumbers or hair dressers.
You're Worth It
If the continual drop in contact lens professional fees has done anything good for us, it's made us introspective about the real services we provide. It has caused us to acknowledge that regardless of how, when or where a patient buys his contact lenses, the fitting and examination process still starts with us. And it has forced us to admit that if we're to have thriving contact lens practices, then we must charge adequately for the services that we provide to our patients.
Dr. Gerber is the president of the Power Practice a company offering consulting, seminars and software solutions for optometrists.
You can reach him at (800) 867-9303 or DrGerber@PowerPractice.com.
Contact Lens Spectrum, Issue: June 2004