By Chad Fleming, OD, FAAO
Oct. 5, 2022
Managed care sometimes limits how much a practice can charge patients and often requires that the practice sell specific products and use particular labs. All of that means practices that are dependent on managed care, and don’t have the right strategies in place, generate less profitability.
Here are a few strategies we use in my practice to deliver a high level of care and service to our patients while becoming more profitable.
“In-House” Glasses Option
We give patients the ability to buy glasses from a proprietary brand that rivals the prices of Costco and Sam’s Club while delivering eyewear in the style of Warby Parker. We did this to capture more cash-paying patients and to create awareness that there are great options outside of managed vision care-controlled eyewear.
Our proprietary brand is powered by Twelve84, which we learned about after asking other practices what worked for them, and then doing our own research. It cost us a little under $200 for the set of proprietary eyewear we display, which included all frames and setup.
Profit: Patients get our staff members’ experience and expertise in the optical and have glasses that have an unconditional two-year warranty, which is hard to beat, especially by online retailers. We increased yearly cash sales by approximately $300,000, thanks to being able to offer our own patient-pay brand of glasses.
By selling a cash-pay line of in-house eyewear, without having to process the managed vision care reimbursements, you realize cash-flow increases and reduce staff time, which is a win-win.
Joined Patient-Pay Concierge Healthcare Network
Fair Market Health provides consumers with a network of doctors offering high-quality, yet affordable, concierge care, which they pay cash for through an online portal. It allows us to present our services and products with a company that transacts a cash-pay service.
We need to have options for new patients to find us outside of managed vision care. If you look at the financials of managed vision care, you soon realize that it has a shelf life of profitability. Nowhere in the economy can you have a system that reduces reimbursements while inflation is rising. We cannot adjust our prices to adjust for inflation, so you get to a tipping point where profits become negative.
It costs more to care for managed vision care patients because of the required documentation and plan administration. When you see signs of the breaking point, you look for other alternatives. Fair Market Health is an alternative that we would like to build on. This company has been in the healthcare space for a while, but not specifically in eyecare. We became the first eyecare practice to join the organization. It took 10-15 hours sitting down with the Fair Market Health team and explaining what eyecare from an OD has to offer, and how our internal financials work.
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Consumers/patients get a negotiated price for our services. It does not cost them to be a part of the Fair Market Health system. They also get to work with a healthcare provider directly rather than through a third party. This ability to work and transact with us directly improves the patient experience.
For every patient who signs up to be our patient through Fair Market Health, there is one less patient for whom we have to navigate the difficult and unprofitable road of managed vision care.
Profit: Fair Market charges us 3-5 percent of the cost of the service we are providing. So, if your exam is $100, Fair Market will keep $5. The patient pays them via the Fair Market website and Fair Market sends a check to you for all services at the end of the month, which came to you from their website, minus the small percentage you owe them. We are 40 percent more profitable from beginning to end with each patient we get through Fair Market Health.
Free Shipping on All Contact Lens Orders
Offering free shipping on all contact lens orders makes buying from us easier for patients, reduces the need for staff processing and lowers the costs of small orders. To do this, we raised per-box fees by $1.
Profit: Free shipping of contact lenses has resulted in more orders placed through our office on the same day of our patients’ exams. We were able to capitalize on our patients purchasing from us and increased sales of annual supplies from 36 percent to 54 percent.
Free shipping also allows us to reduce the cost of staffing, thus making it possible for us to afford the poor managed vision care reimbursements that are not adjusted for inflation.
This change has made our patients happier and our practice more profitable.
Chad Fleming, OD, FAAO, is a partner with Wichita Optometry, P. A. in Wichita, Kan. To contact: firstname.lastname@example.org