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Optical lab services: when to bring them in-house, how to purchase them
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With managed care cutting into profits and many retail optical chains providing 1-hour service, practitioners have had to re-examine their operating methods to remain competitive. Many practices have started incorporating services that have traditionally been lab jobs — such as casting, tinting, edging, surfacing and finishing — into their own practices. Others are shopping on the Internet or banding together to purchase lab services as a group.
There are certain services that every practice can benefit from doing in-house, said Arthur De Gennaro, president of Arthur De Gennaro and Associates, a practice management consulting firm in Lexington, S.C. “The first thing you should start out with is polishing your own edges and tinting. You can do these inexpensively, and it will save you money.”
Lens finishing should be cost-justified before you incorporate it into your practice. Profitability, however, isn’t the only factor that should be considered. Having lab services on-site also affords practitioners flexibility in satisfying patient needs. Kevin McDaid, OD, vice president of vendor relations at Vision Source, who also maintains a private practice, says that service is a key factor. “We are a very busy practice, but the decision to finish lenses on-site was made for service rather than economics,” he said. “We like to be able to supply same-day service whenever possible. Also, we have a very large contact lens practice and need to be able to provide back-up glasses to our patients immediately.”
Scott A. Edmonds, OD, felt that his practice could finish lenses more cost effectively as well as provide better service to his patients, which led him to begin finishing lenses in-house.
“We had a fully trained optician on the staff that was doing dispensing, but knew how to do other components,” he said. “We felt that we had enough volume to do it. Although it wasn’t large enough to make it greatly profitable, our interest was more service-oriented, so we could push out stock jobs while people waited. We needed to make sure we wouldn’t lose money, so we did an economic evaluation to see if we could break even with better service, and that’s how we reached our decision.”
Specialty lens services
Dr. Edmonds stressed the importance of specialty lens services, including high index, antireflective coating and aspheric designs, in building optical services and increasing revenue for your practice.
“With managed care dictating what some of the baselines are, your only opportunity is the high-end options,” Dr. Edmonds said. “Our particular practice does a lot of work with making our own low-vision aids. We get the blanks and then we grind our low-vision aids to the patients’ exact specifications.
“That’s a big piece for our particular practice, but any service not covered by managed care that people want is what really drives the business,” he continued. “The managed care plans are often a break-even proposition.”
According to Mr. De Gennaro, “The wholesale laboratories learned a long time ago that it was the add-ons and high ticket lens materials that would make them money. This is at least part of the reason for the popularity of the polycarbonate. If you price a plastic flat-top 28, you’ll get it for close to nothing; they’ll hardly make any money on it. But if you price an aspheric, progressive high-index lens, it’ll cost you big money because the lab knows that’s where the dollars are.”
Choosing an outside lab
Look at quality, price and turnaround time when you decide on a laboratory to work with. “When you choose a laboratory, obviously, quality has to be the first choice,” says Mr. De Gennaro. “If it produces an inferior product, you can’t deal with the lab at all. After you’re satisfied that the quality is up to your standards, then it comes down to a matter of price, availability and delivery.”
Many practitioners opt for a local lab because they feel more comfortable knowing that the glasses are not traveling far. But Mr. De Gennaro said you might get a better deal by looking further away. Many labs will even pay for overnight delivery. “When I worked for Eckerd Drugs in Florida, we used a laboratory in Seattle, and we would fax our orders over,” he said. “At the end of the day, we were still faxing orders at 5 o’clock here, but it was only 2 o’clock there, which gave them 3 extra working hours. We could call an order in at 5 p.m., and it would show up on our doorstep the next morning at 9.”
Tips on cutting costs
Other options can also help your office save money. In seeking quality products at a reasonable price, says Dr. Edmonds, every doctor should be comparative shopping on the Internet. “There are a number of services that allow you to lay everything out and make comparisons,” he said. “It’s also very convenient to order that way. The biggest tip I can offer is if you’re not shopping on the Internet, you should be, because that’s where you’re going to find the best arrangement.”
Web sites such as E-Dr.com and paradEyes.com give practitioners access to many of the large manufacturers on one screen, without the hassle of placing multiple orders and negotiating each individual company’s Web site.
Another strategy for keeping costs down is group buying. According to Mr. De Gennaro, group buying is still a viable strategy. “It’s difficult to do because everybody in the group wants to do their own thing, but it’s still a good strategy,” he said. “If you can get a number of doctors to use the same facility and negotiate together, they can get better discounts. It’s that simple. If your lab bill is $40,000 a year, and you multiply that by five or six doctors, I guarantee you the laboratory is going to listen to you a little bit more. It’s still a good model, but can be difficult to work.”
For Your Information:
- Arthur De Gennaro is president of Arthur De Gennaro and Associates llc. Mr. De Gennaro can be reached at 145 East Circle Drive, Lexington, SC 29072; (803) 359-7887; e-mail: IsForU@aol.com. Mr. De Gennaro has no direct financial interest in the products mentioned in this article, nor is he a paid consultant for any companies mentioned.
- Kevin McDaid, OD, is vice president of vendor relations at Vision Source. Dr. McDaid can be reached at Vision Source, 1580 Kingwood Drive, Kingwood, TX 77339; (281) 359-2020; Fax: (281) 359-7019. Dr. McDaid has no direct financial interest in the products mentioned in this article, nor is he a paid consultant for any companies mentioned.
- Scott A. Edmonds, OD, is president of the Edmonds Group. He can be reached at Lankenau Hospital, Wynnewood, PA 19096; (610) 896-7261; Fax: (610) 325-9241; E-mail: sedmonds@edmondsgroup.com. Dr. Edmonds has no direct financial interest in the products mentioned in this article, nor is he a paid consultant for any companies mentioned.