I need a business consultation with Optiboard

[drk]

1. My practice is, for all intents and purposes, 100% vision care. I feel I'm no different than many of my peers. It just happened. We're kind of large employer-y around here.

2. Because we're kind of "medical model" (what optometrist isn't trying this, these days?) and our office looks sort of professional and not heavily "retail", the patients' assumption is that "I'm glad I have insurance because I'm going to need it. There's no way I can afford medical care and vision care without my insurance (panic)!!" They've been sold. I'm complicit.

3. I believe that vision care plans are NOT the wave of the future. I think it will be cash and carry (for adults, that is). I don't think individual vision care plans will sell, and I think employers are going to gradually wean themselves off the benefits thing, because I really think health insurance is going to be a bear to afford.

4. Either #3 above, or vision care plans are going to tick so many providers off with their new systems and shameful reimbursements that a heck of a lot of providers are going to go to cash-only.

5. I want to hedge my bets on being so vision care driven. I need to ride into the future with one foot on one horse and one on another. I want to change my office's image to a "cash is accepted here, and we have services and materials that can be affordable".
Sort of like that family Dr. that gives up and says "$50 for all visits; no insurance allowed."

6. Now the strategy: I think if I use a simplified, reasonable, and transparent/posted pricing structure for select, basic services and materials that people will be exposed to the idea that we do "affordable vision care services for cash", as well as the big borg of vision care /medical care plans.

I'm hoping to "internally market" with some kind of tasteful display/signage, and put it on my website.

7. I'm considering using a select collection with package pricing to achieve this.


What do you think? And, what are you going to charge me for your advice?

[tx11]

I like your way of thinking. Try the Acculab pakage pricing. Glasses must be affordable (somewhere) or patients just get charged to know what they already know ( unless there is a medical condition)...they don't see well. I think that your idea will work but may take a few years to make a noticeable impact on your pt. demographic.

[PRECISIONLAB]

Your patients are the best form of advertising based on their experience during their last visit...good or bad. On average they will tell 10 and that 10 will tell 10 and so on. Although your practice is a high percentage of vision care there is no reason you wouldn't be able to capitalize on private pay.

If you haven't done so, develop a mission statement for your practice and have all staff members contribute in the development process. Once done, patients, doctors and staff will have a clear insight on the goals of the practice. Include a summarized version of this in all marketing materials and make signage to post throughout.

Marketing 101: Create "Top of Mind" When I say hamburger first thing that comes to mind is>>> When I say coffee you think>>>. Branding is critical. Create a tag line to describe who you are and what you offer. IE Complete and affordable eyecare for the entire family.

Retail: The opportunity for profit with managed care patients is with frame and lens enhancements...notice I avoided the word upcharge. Evaluate how your dispensers are presenting options to your patients. If able, run reports on each patient to determine how they are utilizing their benefits..% of who stays within plan % of upgrade frame % of lens options. This will assist in determining what is working and what doesn't. Adjust your model accordingly.

Selling: The idea of package pricing works if done correctly. Avoid labeling as Platinum-Gold-Silver this creates a bias mind set of what people can't afford. Good-Basic-Best doesn't say much either about what the patient is purchasing. Try Complete for basic..which it is frame and lenses. Enhanced-frame-lenses-AR or SRC Performance -top line fashion frame-high index-AR. Consider other businesses and their models- strategies ie Car Wash-Express Detail which in reality is a basic car wash with tire dressing and car fragrance. Express means fast while Detail suggests complete. So instead of spending $8.00 you now spent $14. Easy to select and you feel your car looks like it came of the showroom floor. For packaging make it as simple as ordering at McDonalds...number 3 please..Quarter Pounder-fries-Drink. Try not to a la carte lens enhancements but present as one affordable price. IE Transitions with AR is set price of...

Product placement-Top Down Selling: Have your plan frames mixed in with premium products. Most ECPs will have dedicated frame boards for insurance X which is the wrong thing to do. Place your premium frames at eye level with covered frames just below. If your dispenser recommends the premium frame first and explains "there is a minimal charge but your insurance is covering 80-90%" will usually result in your first upcharge. Also take the time to fully educate your patients on the benefits of lens enchancements (don't call them add-ons) with POP materials from your lab. Have the patient touch and feel your AR sample or show them how transitions changes. If they feel they are making an informed purchase they will not hesitate to pay out of plan. Doctor recommendations are the best way to start the conversation about what is best for their vision. A simple check mark on your RX pad to say AR-transitions will amaze you with results. If the doctor recommended it I want it!

Optician Training: Make absolutely sure they are up to date with all managed care plans you except in terms of what is covered. Some plans will provide transitions but it was never ordered. Never assume your patient can't afford or want it. Consider restaurants 9 times out of 10 you are offered an appetizer and dessert...they never assume you are full just from your meal. Video tape them during a fit and read mannerism presentation etc and have them watch and review. Smiles...are they engaged with the patient...are they answering all questions? In reality Opticians are both medical professionals for fit and measurements and sales associates.

If we remain open minded about vision care plans and utilize business models to maximize profit, the profession will thrive.

[matt2939]

I would do all of the above. Give that a year (so all your patients have the opportunity to see this in office), then pick your worst VCP and drop it. Track how things shake out with those patients. Then wait a few months and drop another one.

Personally I dropped Spectera a year ago - revenue & profit still increased YOY. 6 months later I dropped NVA - revenue & profit continue to rise. Effective Feb 1 I will no longer participate with Davis - I expect the same to continue. Each time I wrote a detailed letter explaining to patients why I won't be participating with their insurance any longer and took the opportunity to share our value pricing.

Good luck!

[drk]

Matt, you were in deep with the doo-doo.

[rdcoach5]

Doc, I tried cutting markup 30 years ago to counter cut rate chain pricing. It didn't work then and I think you will be better off charging reasonable markup and establishing your own niche. Take Craig or Johns for example. Two different ideas for business but both successful .The M.D I work for moved into a new , bigger office one and a half years ago. He added an O.D and an audiologist. Then he bought an existing practice 2 miles away, adding another O.D for a total of three. We added 2 opticians and now have added a retinal specialist. Our optical is so busy it's nuts. Our owners are VERY active in the community and bring in all sorts of friends and aquaintances because of that.

[David_Garza]

If Dentists have survived this long without taking any insurance/dental plans I am sure you can too. Best of luck.

[racethe1320]

If Dentists have survived this long without taking any insurance/dental plans I am sure you can too. Best of luck.

yeah, but Dentist are more service based. they aren't faced with online and retail establishments taking roughly 60% of their business as they don't have a dispensary.

[fjpod]

You can dream all you want.

[tx11]

yeah, but Dentist are more service based. they aren't faced with online and retail establishments taking roughly 60% of their business as they don't have a dispensary.

Could ODs make a living off their services...ie.chair time? Do ODs make a living when they work next to chains that sell all the cls and eyewear? discussion...

[tx11]

Doc, I tried cutting markup 30 years ago to counter cut rate chain pricing. It didn't work then and I think you will be better off charging reasonable markup and establishing your own niche. Take Craig or Johns for example. Two different ideas for business but both successful .The M.D I work for moved into a new , bigger office one and a half years ago. He added an O.D and an audiologist. Then he bought an existing practice 2 miles away, adding another O.D for a total of three. We added 2 opticians and now have added a retinal specialist. Our optical is so busy it's nuts. Our owners are VERY active in the community and bring in all sorts of friends and aquaintances because of that.

Im curoius why it didnt work back then. Today cost of goods are way low. discussion...

[racethe1320]

Could ODs make a living off their services...ie.chair time? Do ODs make a living when they work next to chains that sell all the cls and eyewear? discussion...

I suppose one could, but why would an OD forgo such a profitable area of the business such as a dispensary? I know there are plenty of docs that just play doctor and send patients elsewhere, but I would never do that. The exam for me is fun, it's what I've done for years, but the reality is the money is made outside the lane. Key is not to let the staff run it. Doctors that I know who complain are usually poor business people and don't have a full understanding of how to work VCP's and maximize the dispensary.

[tx11]

I suppose one could, but why would an OD forgo such a profitable area of the business such as a dispensary? I know there are plenty of docs that just play doctor and send patients elsewhere, but I would never do that. The exam for me is fun, it's what I've done for years, but the reality is the money is made outside the lane. Key is not to let the staff run it. Doctors that I know who complain are usually poor business people and don't have a full understanding of how to work VCP's and maximize the dispensary.

I suppose that one would in order to be just that...a doctor and not a retailer...there are ODs that work in MDs office that do not have a dispensary.Just sayin

[racethe1320]

I suppose that one would in order to be just that...a doctor and not a retailer...there are ODs that work in MDs office that do not have a dispensary.Just sayin

Hopefully they aren't the ones complaining about lack of earning potential.

[optimensch]

Being a good doctor of optometry, in the sense of being a good clinician, can be rewarding and be plenty enough for some. You can diagnose retinal disease, corneal disease and be a super phoroptor jockey and see all your eyeglass prescriptions (and of course pharmaceutical) walk out the door. That's basically what optometry colleges pump out and what the profession has become - just look at any optometry journal - they are basically medical journals. This behavior has really been a boon to the chains and the on-liners. Operating a thriving showroom/dispensary requires a whole different skill set and level of creativity, and retail savvy.....but it is really just as important to the long term health of the profession imo.

[drk]

Agree with Mensch and Race. Optometry needs to have an optical to survive.

Opticians should have ODs working in their office, or make connections with ophthalmology.

[rdcoach5]

Im curoius why it didnt work back then. Today cost of goods are way low. discussion...

To try to compete with the low cost chains is only possible if you are a large chain with volume buying power and even then we have seen tons of those go out of business. It's better to compete with the best service and quality.

[fjpod]

I will offer the contrarian position here. ( it's not in my nature, but...). I DO think ODs can make it without materials today. I come from a long established private practice that was and is heavily optically oriented, but...medical is becoming a higher and higher percentage of what I do. The insurance reimbursements are decent. If I didn't have optical in my practice, I could let go of probably 2/3s of my staff, and use the old lab and dispensing space as exam and treatment space.

I wouldn't need to work for an optician nor an OMD.

[tx11]

To try to compete with the low cost chains is only possible if you are a large chain with volume buying power and even then we have seen tons of those go out of business. It's better to compete with the best service and quality.

I wonder if expensive buildouts and displays are part of the problem there....?A value optical shop would only work with extremely low overhead...and a volume of new customers or many repeat customers purchasing eyewear throughout the year

[Craig]

I am open and willing to show anyone what we do if they come visit us in Florida. Johns is the only one to come visit me; see any correlation? I have an OD who comes in and she loves coming to our non-insurance office. She also works at an MD office that has no optical and we have a great relationship.

The better question is why would they go to your office when they can go to mine or Johns?

[tx11]

I think that many opticians would love that type of set up(own the dispensary and get 100% of net) ...it would boost their pay quite a bitBUT it would only work if an OD/MD would be happy earning their living from chair time and procedures.

[tx11]

I am open and willing to show anyone what we do if they come visit us in Florida. Johns is the only one to come visit me; see any correlation? I have an OD who comes in and she loves coming to our non-insurance office. She also works at an MD office that has no optical and we have a great relationship.

The better question is why would they go to your office when they can go to mine or Johns?

I'm curious ...do YOU pay the OD or do they Only get compensated from the patients that they see?

[David_Garza]

I'm curious ...do YOU pay the OD or do they Only get compensated from the patients that they see?

In a 1 door state (not TX), this arrangement is quite common. OD/MD only receives payment for professional services and the optician keeps the optical sales generated by their exams.

[optician2601]

In a 1 door state (not TX), this arrangement is quite common. OD/MD only receives payment for professional services and the optician keeps the optical sales generated by their exams.

Please share with me how this arrangement is set up. I have an optical and an exam lane set up. Does the doctor "sublease"... how does it work?

[optician2601]

I am open and willing to show anyone what we do if they come visit us in Florida. Johns is the only one to come visit me; see any correlation? I have an OD who comes in and she loves coming to our non-insurance office. She also works at an MD office that has no optical and we have a great relationship.

The better question is why would they go to your office when they can go to mine or Johns?

Do you have one door entrance? How is your optical and exam lane set up