60 Second Survey: How Did Your Practice Do In The First Quarter Of 2009?

Allow me to start this blog with a little bit of dark humor based on the economy.

Q: What is the difference between a recession and a depression for an optometric practice owner?

A: A recession is when your optometric colleague sees a decline in his or her practice. A depression is when you see a decline in your practice.

As bad as the economic news has been over the last year, and particularly the last six months, there is a silver lining. Eyecare seems to be holding up relatively well.

Why Is The Business Of Eyecare Doing OK In A Recession?

I want to hear how you are doing and what you are seeing in your practice.

I think there are three main reasons that eyecare revenues are relatively steady during what most economists are labeling the worst recession since the 1930’s.

1. Basic Healthcare Need: Optometrists have been preaching this for the last 100 years. Clear, healthy vision is a precious commodity. People have to see well to function well in life.

2.  We Provide A Lot Of Value At A Good Price Point: The average revenue per patient in most optometric offices is in the $300 to $400 range. That is a very manageable amount for the typical consumer. And very importantly, it's generally not a big enough number to require special financing.

By comparison, cosmetic dentists and plastic surgeons who make their living on patients spending $5,000 to $20,000 per case are seeing noticeable declines for two reasons; 1) consumers are cutting back on big ticket discretionary items and 2) credit, in the form of home equity loans and plastic, for this type high ticket item is much harder to get. 

Case in point, I was in for a hygiene appointment last week and my dentist told me her patients were having trouble getting financing for expensive cases and it was affecting her practice revenue.

3. Third-Party Payers: Love ‘em or hate ‘em, third-party programs like VSP and EyeMed are bringing patients into your practice, despite the recession.

In fact, many third party programs are reporting higher than normal utilization rates in Q4 2008. Administrators speculate that employees are rushing to use their health care benefits, just in case they get laid off in the future.

Let’s Hear From You

That’s what I think. Now I’d like to know how you are doing and what you have to say. Click here to respond to our ‘60 Second Survey’. Your answers will be completely anonymous. Results will be published in my April 30th blog.

Regards,
Jerry Hayes, OD

Agree with this blog? Disagree? Have a comment or question of your own? Click here to send me an e-mail. 

Disclaimer: The information and opinions contained on this site are for discussion purposes only and are NOT intended to serve as legal, accounting or investment advice. ©2009 Jerry Hayes, OD. Not to be reproduced without written permission of the author.