Practice Management

How I am Future-Proofing My Practice In Response to 3 Major Threats

By Aaron Neufeld, OD, FAAO

Feb. 12, 2020

The competition for independent ODs is fierce, with technology advances enabling online refractions, and more places than ever to buy glasses and contact lenses. I am conscious of these threats, and am in the process of “future-proofing” my practice.

A recent Forbes article highlighted the challenges faced by the eyecare profession.

The Forbes article noted that if optometric disruption trends continue as they are now, we will see a complete dissolution of mid-level optometry practices, as well as corporate practices. The article predicts that high-end, and certain volume-based low-end optometry offices, will survive the apocalypse.

This reasoning seems plausible despite being controversial, since it follows the trends seen at the major retailer level. Mid-level and chain department stores, such as Sears, are being dismantled while high-end boutique shops and discount stores, such as Dollar General, are thriving. Why? Because online retailing is able to provide a cheaper and more convenient alternative to mid-level offerings. High-end boutiques still thrive due to an emphasis on customer service and limited supply offerings while low-end/volume-based storefronts rely on negligible price differentials and a demographic propensity for brick and mortar over online, partially due to accessibility issues.

What Does It Mean to “Future-Proof” a Practice?
The consistent, modern surge of technological innovation has brought about much disruption in nearly every field. One field that has started to feel the impact of technological disruption is the medical field. When we look at optometry specifically, we are only at the forefront of what disruption will bring. Disruption to the industry comes in many forms, however there are three disruptors that pose the most significant threats:

Telemedicine/DIY Automated Examinations. As technology continues to improve, so does telemedicine and the ability to receive care through the internet. Despite obvious shortcomings in the realm of ocular health, telemedicine/automation continues to grow due to interest from both a cost and convenience standpoint.

Online Glasses & Contact Lens Suppliers. E-commerce continues to grow in the optical world. With the increasing ability to offer goods at a lower price, due to minimal overhead and necessary woman/manpower, online sales are steadily creeping in as a fast growing alternative and cheaper option to brick and mortar.

Stagnant Vision Care Plan (VCP) Reimbursement & Internal VCP Competition. While inflation has increased, VCP reimbursements have remained stagnant. Additionally, VCPs have begun creating internal competition by offering patients resources and products that take away from private practice sales. This creates a stranglehold on the practitioner who relies on VCPs for both supply of patients and payment.

Future-proofing comes down to one simple concept: create a business model that is impervious to disruption. Keep watching the free market and understand your competition. The reason that mid-level optometry is shrinking is because of easy reproducibility. If you provide services that cannot be reproduced cheaply, or emulated through e-commerce, then you can protect your future.

Pivoting to Toward High-End & Medical
My practice has always had a history of having a mid- to high-end optical. However, when I took ownership around four years ago, I made an effort to pivot the practice to mostly high-end with a boutique “Nordstrom” style of service.

From the doctor’s side, I implemented a full medical approach. Both my associate optometrists and myself practice optometry to its highest scope. In the last few years we have seen an uptick in medical optometry and have become a referral source from other local offices that do not have the equipment we have.

Finally, we have continued our tradition of providing specialty contact lens services. Once again, our continued efforts in specialty contact lenses have allowed us to be a referral source for both local optometrists and ophthalmologists.

What Is the Cost of Future-Proofing?
For my practice, future-proofing did not come with many tangible costs. The one piece of equipment we added to fully provide medical services was an updated OCT, which I purchased about three years ago for $35,000. The main “cost” came in the form of time needed for training staff and getting the word out to both our patients and fellow colleagues to spur referrals.

Our OCT took about three years to break even. I estimate this could have been two years, however for the first two years of owning the OCT, I had associate doctors who were not trained in medical optometry. Now that my associate can perform medical eyecare, we are seeing a rapid increase in medical billings.

The ROI of becoming a “future-proofed” practice is immense. The key is to focus on the long-term. You will not see your changes bear fruit instantaneously. Positive changes occur overtime. Make sure to track key performance indicators after you make changes. If they fail to produce meaningful ROI over periods of time, it may be time to reconsider.

Listen to Your Patients
Patient feedback is vital when it comes to practice improvements. Feedback allows for adjustments and changes from a consumer’s perspective. This is valuable to a business owner/practitioner.

For example, in my practice, patients told us they wanted more high-end frames. This encompassed  standard designer sunglasses, but also included functional frames with properties that allowed for bending and better strength. We adjusted from this feedback and brought in more high-end lines. While trying to find space for these new lines, we realized that a few of our lower-tiered lines were not performing well. Thus, patient feedback helped us move further toward future-proofing!

I mainly rely on word-of-mouth surveying in which I ask about five minutes of questions to my “grade A” patients. However, we have utilized surveys when we have wanted to learn about the market on certain issues.

Ask Support Staff For Insights
Support staff always have important input on both patient feedback and trends. While doctors are busy seeing patients and running their practices at a macro level, support staff is on the front lines and exposed to business at the micro level. Ask support staff about patient trends. What are they gravitating toward as consumers? Contact lenses, glasses? And what brands? Compile data on different demographics in your practice. Find out what these demographics are buying and start to create a future-proofing business plan based on this data.

Buy From Vendors that Support Independent Practices
Eyecare vendors need to support private practice, and private practitioners need, in turn, to support those that support them. Vendors always run into the temptation of selling to the lowest common denominator to meet bottom lines, and a lot of them do. The challenge is to buy from vendors that support private practice.

 

Aaron Neufeld, OD, FAAO, is the owner of Los Altos Optometric Group in Los Altos, Calif., and co-founder of ODs on Finance. To contact: aneufeldod@gmail.com

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