By Kirsten Turrisi, OD
Nov. 9, 2022
Surviving as an independent practice isn’t easy. It requires a multi-pronged approach. Here are three of the most important strategies we use to provide great care to our patients while growing profitability.
Challenge #1: Creating Brand Recognition to Compete with Corporate Household Names
The biggest challenge that independent ODs face is always going to be corporate optometry, which has greater scalability, and therefore, can buy in larger volumes, making it easier for them to control costs. Many of those corporate-owned opticals also have the advantage of being household names people recognize and already trust.
Corporate-owned practices have brand recognition because they advertise all over the internet and on most TV channels. They have the resources to afford the constant advertising. A local optometrist’s best advertisement is word-of-mouth as we can’t always afford further advertising.
Solution: We always go above and beyond with our patient care in my practice. We focus on our patients’ full ocular health by practicing a medical-based model. We always make sure to book our patients with ample time so that they never feel rushed to get the care they need and deserve. When patients have an exceptional experience, they are more likely to talk to their friends and family about their experience.
We also strive for a large online presence with social media. Our practice has pages on Facebook, Instagram and TikTok. While it may seem trivial to spend time on silly things such as videos of how people in the office react to an NCT, it helps get you recognized. It helped our office when we participated in a “Drive Thru Boo” at an elementary school near our office, which we documented on social media.
The social media presence itself does not cost anything in dollars and cents unless you choose to boost your posts, but you need to have a staff member dedicated to keeping up with those pages. Having a strong social media presence requires a significant time commitment. Our office spends about 10-30 minutes a week recording a TikTok video, but our Facebook and Instagram posts get scheduled when we have downtime between patients. Don’t just think of it as trivial to do these videos, for our office it is a great team building time to have fun while also helping increase our social media presence.
Our office also tries to focus locally. We don’t need to advertise nationally when we should focus on our own backyard and the people who will be our patients. In the past, we have advertised our back-to-school special with flyers in local stores and daycare centers. We have company t-shirts that we give away to patients who spend a certain amount of money on glasses. Everyone loves a free gift with their purchase, and it’s walking advertising for you.
Local advertising has only cost us a few dollars to print the flyers and time to participate in local events. The t-shirt advertising costs about $7 dollars a shirt. We have bought about 500 t-shirts and they lasted about three months before all shirts were given away.
We spend a few hundred dollars a year on advertising with Google, and we intend on marketing on Facebook to have a greater outreach. A one-week Facebook ad costs around $35 to run.
Challenge #2: Competing with Online Retailers for Glasses & CL Sales
While shopping online seems more widespread than ever, we can excel by giving patients what online cannot provide: a better buying experience. It can be difficult to compete with a large-scale online retailer, but we strive for quality over quantity.
The ease of online shopping cuts into the sales of most independent practices. Optical sales comprise 40-60 percent of the typical independent practice’s revenue. Even if most of your patients come in annually for a comprehensive exam, the lost profitability adds up if a sizable number of those patients are not also making an eyewear purchase during their visit.
Other Articles to Explore
Solution: To increase sales, you need a great sales team that starts with the doctor. The doctor is the one who knows what visual demands the patient has and knows what lens or add-on lens treatment will most benefit the patient. The doctor should not only refract the patient, but should also prescribe the best lens options for their patient. Not only do patients trust their doctor, but they know that they have their best interests at heart.
In addition to a great sales team, you need to keep up with the latest technology. Our practice plan implemented Frames Data to our website. Frames Data allows patients to view the products/name brands you carry in your office directly from your website. Patients can virtually try on frames and add frames to a wish list. Patients can then request to try on the frames from their wish list in-office before purchasing. When patients come into the office, we give them a personalized buying experience with the help of our frame stylist.
The Frames Data addition to our current website cost around $100 monthly after an initial setup fee. If you manage to get 2-3 sales from the website per month, Frames Data will pay for itself!
The set up time is minimal with the help of the Frames Data service. They link our website and we select the brand-name frames we carry in our office. We are able to continuously update the Frames Data to keep it in sync with our optical stock. It will take training to show our staff how to work the website so that they can answer any patient questions they may encounter, but this is easily achievable through our regular staff meetings.
Not all patients want to come into the office and browse the optical, as it can be intimidating. With online shopping through your website with brand names you carry, you will open your practice up to more opportunities. Some patients will search online for a specific brand and will be able to see that you not only carry that brand, but they can start shopping online even if they have not been seen as a patient in your office before.
Better technology on your practice website enables patients not only to more easily purchase eyewear from you, but also shows that you are striving to keep up with the latest and greatest.
Challenge #3: Declining Insurance Reimbursements
Insurance reimbursements are steadily declining while production costs, employee wages and operating costs keep increasing; all while payor premiums are increasing for these supposed same reasons. The problem is, these changes enhance the insurance companies’ profitability, but directly lowers your revenue.
When a provider agrees to accept an insurance company, they are contractually obligated to accept a certain reimbursement on procedures. The flip side is that if a provider does not accept the insurance company, the patient will most likely choose another provider who does. The question becomes, do you take a lesser amount or run the risk of losing any payment if the patient chooses to go elsewhere?
The main problem behind this challenge is that optometrists have little control over their reimbursements. While other businesses can increase prices on the goods they sell, an optometrist will only get reimbursed for what they contractually “agreed” to. This becomes increasingly difficult when insurance companies change their reimbursement rates, often without the provider knowing.
Insurance-provider contracts can last for years before optometrists try to renegotiate their rates, and when attempted, insurance companies often deny any requests.
Solution: Our practice increased prices on uninsured procedures such as eye-health screening photography, contact lens fit training and self-pay refractions (for patients who only have medical insurance with no routine vision coverage). We have also brought in new technology such as the Equinox LLLT, which, while it is FDA approved, it is not covered by insurance.
We also dropped our lowest-reimbursing vision discount plans. While we lost some patients whose plans we no longer accept, other patients still choose to have their eyecare with our practice and file for reimbursement from their plan themselves.
We had a net positive gain from this transition because we replaced lower-paying appointments with cash-paying patients or with patients with better insurance reimbursements.
Going through each line-by-line item with every insurance your practice accepts to determine your compensations can be time consuming, depending on your EHR or practice management software. For us, this project took about a week to get all the numbers working outside of patient hours. It takes a staff member dedicated to contacting different insurances to get rates increased. This employee needs to have knowledge of insurances and rates as well as procedures.
From my experience, it takes a minimum of six months before you can even get in contact with the correct person at an insurance company to start the renegotiation process. Bidding to increase reimbursements can be challenging, but will directly impact your bottom line. If you have an insurance company that pays $60 for a routine exam, but a different insurance pays $115, you may need to reconsider continuing to accept the insurance with the lower rate.
Increasing rates and reimbursements will have a direct positive impact on profitability. If you can increase pricing by $5 on a procedure, you can average an increase of $300 per week assuming an average of 60 third-party patients being seen per week. That’s an additional $16,000 in revenue per year just from a $5 increase! It may seem mind-numbing to go through everything to adjust your pricing, but it all adds up, especially when you are a small practice.