contact lens economics
New Year, New Start, New Opportunities
BY WALTER D. WEST, OD, FAAO
Consider the new year a perfect time to update your contact lens pricing structure. Many practices suffer from inertia in this area stemming from fear of changing policies that long-time patients are accustomed to, and from a perceived lack of time to devote to something so "mundane."
If you differentiate your practice offer your services to patients who never considered contact lenses, suggest lenses for challenging cases and provide new solutions to patients who have dropped out of lens wear you show yourself to be a true contact lens specialist.
Many practitioners have failed to make the transition from "profit based on materials" to "profit based on services." As their margins on lenses have slowly eroded, they have hesitated to raise their professional fees. They believe that patients are not willing to pay higher fees for better service.
A reasonable fee is one in which the patient feels he received more than he paid for, yet is high enough to hold the practitioner's interest. If you charge extremely low contact lens fitting fees, you will quickly become disinterested in fitting them.
By using your staff to their fullest capabilities, you can direct and evaluate contact lens fittings and minimize your face time with patients, yet provide them with professional care that they value and are willing to pay for.
One way to determine your professional fees is to gauge them against the amount of time and complexity you spend in other procedures. Look at the number of options and the time it takes to evaluate and manage particular groups of lens patients, and price your fees accordingly. Patients can be grouped by category:
- Spherical, uncomplicated, disposable
- Spherical, complex, disposable (dry eye, neovascularization)
- Astigmatic, straightforward, disposable
- Astigmatic, complex, soft
- Astigmatic, complex, rigid
- Presbyopic, disposable
- Presbyopic, rigid
- Irregular corneas (keratoconic, post-graft)
As you evaluate your professional fees, also look at how you price materials. Many practitioners look at the per-box price of the nearest discount store or warehouse and charge a similar fee. While it is prudent to be in the ballpark, you must also consider the purchasing power of these entities. They buy lenses in enormous quantities and command pricing and advertising concessions from manufacturers. If you offer competitive pricing without implementing certain policies, profitability will evaporate.
If you and your staff permit patients to purchase disposable lenses in small quantities one or two boxes at a time the profit can be eaten up by staff costs. If these boxes come from your inventory, factor in inventory costs (the cost of having your money hanging on the wall). If they come from the manufacturer, considered the costs of numerous small orders, which cost you dearly in shipping fees and staff time. When your staff is tied up on the telephone with patients and order departments, they are not helping you care for the patients currently in the office. That lowers productivity for you and the rest of the staff and frustrates the patients who are waiting to be seen. Low productivity results in lower profits; frustrated patients do not return. I hope you can see the connection.
Manufacturers are eager to help you design programs and implement staff training. Tap into their resources and make this year more profitable than ever.
Dr. West practices in Brentwood, TN, and lectures nationally and internationally on contact lens and practice management topics.