Finances

The State of the Optometric Profession: Optometry Has Excess Capacity

By Thomas F. Steiner

Director of Market Research,
Review of Optometric Business
Sponsored By Essilor and VisionWeb

AOA Excel recently commissioned Jobson Medical Information to assess the current status of the optometric profession and the future impact of major trends in the business, regulatory and technology environments. The AOA wanted an objective, third-party evaluation that weighed all available information on the eyecare industry from associations, publishers, manufacturers and government agencies.
>>The major findings of the report were presented at the AOA Optometry’s Meeting in June, 2013. The full report can be downloaded by clicking HERE<<
This article, the second of three, reports on optometry’s excess capacity in today’s marketplace.

Optometry Has Excess Capacity

The current supply of practicing eyecare professionals is fully adequate to satisfy Americans’ demand for vision care. There is currently one licensed eyecare professional for every 3,500 people using vision correction. During 2012, there were 58,000 eyecare professionals licensed to perform comprehensive eye exams and in practice in the US including approximately 40,000 ODs and 18,000 ophthalmologists. They serve a vision correction population totaling 202 million, as well as millions of other patients requiring therapeutic and surgical services. In as much as people requiring correction account for the vast majority of eye doctor visits and visit eye doctors infrequently, current demand for eyecare services is well satisfied by the current base of practicing professionals.

The 40,000 US ODs practice in many settings. Fifty-seven percent have a primary practice in a private practice owned by an OD. Twenty-four percent have a primary setting as an affiliate of a retail optical chain, either as a franchisee, independent contractor or employee. Eight percent of ODs practice in ophthalmology offices. The remaining 11 percent of ODs practice in government and other institutional settings.

Available information suggests that the number of practicing optometrists will grow approximately 2 percent annually through 2020 and reach 46,300 in that year. The net increase will occur as an average of approximately 1,550 ODs graduate and enter practice annually and about 750 ODs retire. Over the same time period, the number of practicing ophthalmologists is expected to be stable. At the end of 2012, ODs accounted for 69 percent of eyecare professionals in practice; by 2020 they will account for 72 percent.

Jobson projects that the total number of practicing eyecare professionals will grow 11 percent (CAGR = +1.5 percent) through 2020. Over the same period, the US vision correction population is expected to grow by just 8 percent (CAGR = +0.9 percent). These projections suggest that there will be a more than adequate supply of eyecare providers in the US, although local shortages may exist. The projection suggests it is unlikely that MDs will grow more active in dispensing corrective devices, because the static number of MD hours available will be needed to satisfy the rapidly growing demand for treatment of ocular disease and refractive surgeries.

Over the next seven years, 65 percent of new ODs entering practice will be women and 90 percent of retiring ODs will be men. This will change the gender ratio of practicing ODs. Currently the male/female split among practicing ODs is 61 percent/39 percent. In 2020 it is likely to be 49 percent/51 percent. A consequence of this shift is that there will be a continuing gradual shrinkage in the number of private optometric practices, as a majority of newly graduated female ODs choose employment in private OD or ophthalmology practices or affiliation with optical chains.

Despite an increasing proportion of patients enrolled in vision and medical insurance plans offering vision benefits, there has been no increase in annual per capita utilization of OD services over the past 15 years. AOA member surveys show that the average number of comprehensive eye exams ODs perform per hour has not changed and is just 1.1 per hour. Surveys conducted by the Management & Business Academy reveal a similar benchmark, but show that highly productive practices achieve an exam per OD hour ratio of 1.5 or more. This supports a conclusion that many ODs have excess capacity to see additional patients. This condition is unlikely to change as the number of practicing ODs grows.

This overview of the OD supply situation identifies several priorities for ODs to respond to a business environment with increased numbers of eyecare providers, including:

• Differentiate the practice value proposition. With a more than adequate supply of ODs to satisfy primary eyecare demand, prosperity will flow to providers who successfully differentiate their services from competitors. For independent ODs, a patient loyalty strategy, based on providing highly personalized care, is likely to be an effective differentiator.
• Increase hourly production. A plentiful supply of ODs will aggravate the current situation in which available OD hours are under-utilized in many practices. To prosper, ODs can focus on achieving high hourly productivity through maximum delegation to staff and more disciplined patient flow management.
The AOA is currently conducting a major workforce study, which is slated for publication in late 2013. The estimates and projections of practicing eyecare professionals in this article are derived from other industry sources including professional associations, manufacturers and publishers. The broad conclusions presented here about provider supply are unlikely to be contradicted by the workforce study.

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