Nathan Hayes

Nathan Hayes is the Manager of Business Development for Red Tray and Editor of sellingtoecps.com.

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ODs’ Forecasts for 2010

Posted on February 11, 2010
Filed Under Articles, Industry News |

Results of the Dr. Hayes Blog 2009 Practice Performance Survey

Over at Dr. Hayes blog, we asked ODs how they expect their practices to perform in 2010.  Read on to get a feel for how your customers are feeling about the optical market this year.

Comparing 2009 production to 2008

Over two-thirds, (70%) of the practice owners who responded to our survey said their collected gross revenues increased in 2009 as compared to 2008.

12.5% of the practices reported being even with 2008.

27% said they were down for the year.

Forecast for 2010 – Optimism!

Over three-quarters (77.5%) of the responding ODs predict their full year revenues for 2010 will be up when compared to 2009. 47% expect to be up over 5%.

16% expect revenues to be even in 2010.

Only 6% of the responding practice owners expect their 2010 revenues to less than 2009.

This, of course, speaks to the optimistic nature of many OD’s.

Of note, 22% of the respondents were expecting a decline in practice revenues this time last year.

Who responded to this survey?

This is a blind survey sent to readers of drhayesblog.com. We had 146 responders, all of whom claimed to be OD practice owners.

75% reported being in practice more than five years.

The breakdown by annual collected gross revenues for 2009 was:

• 42% produced over $1,000,000

• 13% produced $750,000 to $999,999

• 23% produced $500,000 to $749,000

• 22% produced less than $500,000

Selected comments from survey respondents:

The bottom fell out in 2009 but that was LAST YEAR! We are anticipating a 20% growth this year. January was up 22% in collections and the TEAM is focused on MAJOR growth for 2010.

I remodeled my practice in 2009 and expect our up-to-date office to increase revenue in 2010. Although the budget was tight, doctor, staff and patient morale increased a great deal.

The last 4 to 5 months of 2009 were down in my practice. Prior to this, we had a 7-8% growth. We had difficulty with a few of our pay for service plans reimbursing in a timely manner – it took them 3 months to reimburse us.

67% of our exams are covered by VSP. I think their new contact lens program is going to have a huge negative impact on us this year.

My gross is up 20% with a net of 40% because I understand the separate and unique definitions of routine eye exam versus the medical office visit. In my mind, both visits are separate identifiable events. One is based on wellness/screening and the other is based on medical necessity/medical decision making.

We are down 10% overall from last year, but half of this is due to the loss of Medicaid in California. To combat this drain, we have leased a retinal camera and we are generating a bit of extra income from this to offset the Medicaid loss.

My greatest concern for the future is a sudden increase in patients buying eyeglasses on the internet. They come in looking for model names and asking for PD measurements. In my practice, eyeglass sales lost to the internet is about where contact sales lost to the internet was about 6 or 7 years ago. It’s concerning.

This is not a time to waiver on your business model. If you own a niche for high end eyewear and great service, continue to deliver on that. If your niche is lower prices, try to maximize on that. The demographic that built your practice up to this point will be the demographic that will sustain your practice into the future.

Put patients first. Set your profit goals. Accept the fact that you cannot provide the entire spectrum of eyewear, i.e. cheap and quick, as well as top of the line, in one practice.

Stop practicing optometry as a hobby. Define your services upfront to your patients and get paid appropriately for them. People understand the difference between a routine eyeglass/screening exam and a thorough medical exam to prevent vision loss. Just take a minute and explain your expertise to them.

What are you hearing from your accounts?  Post a comment below or email me.

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 Red Tray. All rights reserved. Not to be reproduced without written permission of the author.

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