Vision Care & Wear
outsourcing

Should You Outsource Your Optical?

Consider whether your practice can benefit from this option.

ZACK TERTEL, ASSISTANT EDITOR

John J. Martinelli, O.D., of Martinelli Eyecare in Pittsburgh, Pa., says he never considered out-sourcing his optical until a major personnel change occurred.

Specifically, his son, who had also practiced at Martinelli Eyecare, decided to leave the practice for medical school and took his wife, Dr. Martinelli's optical manager, with him.

Nearing the age of retirement and running a practice that he says focuses primarily on the medical side of optometry — he employs two ophthalmologists part-time — Dr. Martinelli says, “I didn't want to deal with it [the optical] anymore, and I didn't have anyone in the office who I felt was capable of taking it over,” he explains.

To bypass the challenges of running an optical, Dr. Martinelli says he chose to outsource his optical to a company that essentially manages his optical's day-to-day operations, including inventory and payroll.

Is outsourcing for you?

Optical outsourcing has been a particularly appealing option to ophthalmology practices that don't have prior training in the optical business. With their training in refraction and optics, optometrists historically showed little interest in outsourcing, although many successfully use the services of consultants and optometric alliances for dispensary-related management, purchasing and training services. However, some practices are now looking at outsourcing staff and operations as viable options, says Mary Walker, COE, director of operations for Vision Associates, an optical outsourcing company.

“Optometrists are turning toward more of a medical model than they did a few years ago,” says Ms. Walker. “They simply don't have the time to pay as much attention [to the optical].”

If you concerned about the performance of your optical and are open to outsourcing as an option, consider some key optical benchmarks. Start by considering your optical's current costs and revenue, including cost of goods, payroll and net profit percentages. Then, compare these benchmarks to expected future revenue by asking optical outsourcing companies for projection reports, which should include refraction volume, capture rate and average sale. Other general benchmarks include gross revenues, cost of goods, payroll, optician productivity, capture rate, inventory turns and net profits.

To ensure an apples to apples comparison of your optical to the outsourcing service, include your accountant in the information gathering process, says Dr. Martinelli.

Keep in mind that, these general benchmarks may not tell the whole story, notes Ms. Walker. For example, though three to five annual inventory turns and a capture rate of 60% to 80% can be representative of a successful optical, these metrics don't apply to all practices, she explains. So, be sure to request a benchmark assessment from the optical outsourcing companies to examine these numbers in greater detail and perspective, Ms. Walker recommends.

Further, consider the time saved that can be spent in other areas of your business, as well as the mental fatigue that you may avoid from managing your optical, Ms. Walker adds.

“Many owners just don't have enough hours in the day to actually concentrate on the business of their dispensary because they have so many other things within the practice to manage.”

Calculate the time you and staff spend analyzing numbers, creating optical marketing plans and training staff. This time is costly, as the average gross revenue per optometrist is $316 to $383 per hour, according to a 2012 Key Metrics report. You free up this time by using an optical outsourcing company to handles tasks, such as reconciling statements, paying bills and buying products.

“Do you think you're getting a return on the amount of time you invest?” she asks.

If the time spent managing your optical is not included in your time calculations, (e.g., making optical decisions after hours or in impromptu discussions with optical staff), consider the impact of shifting decisions to a vendor that specializes in optical management.

This freedom from management and clerical tasks, marketing and other needs of the dispensary made the decision to outsource an easy one for Dr. Martinelli, he says.

He adds that, when it came down to it, he just couldn't see what would go wrong if both sides upheld their ends of the contract.

Finding the right fit

If you've determined hiring an optical outsourcing company is right for you, here's some advice on how to find the right match for your practice.

▸ Conduct an Internet search. Use your favorite search engine to look for “optical outsourcing” companies, and then research how each company works, their fees, etc.

Ms. Walker suggests you look for optical management companies that are run by trained opticians who “live” optical and know how to make the business profitable, along with being able to fit eyewear and train staff. For example, a management company that can improve your turn time and quality utilizes a national laboratory and electronic ordering, Ms. Walker opines.

Be aware: Some may optical outsourcing companies may take over frame and staffing decisions, so determine the company's policies and decide whether you may be willing to relinquish control of these areas.

The company Dr. Martinelli uses hires and trains optical personnel, though they don't automatically fire all current staff and hire their own people, he says. Dr. Martinelli says this was important to him, as not only had he built relationships with his optical staff, he also had several people he trusted to best serve his patients.

“This is one team, just as an offensive line is on the same team as a defensive line,” Dr. Martinelli says. “Everyone has to work together, or this isn't going to work.”

▸ Ask colleagues. Post on one of the optometry-themed blogs and Facebook pages. Ask whether anyone has used an optical outsourcing company and their experiences.

“Make sure you're doing business with someone you like, because they're ultimately managing this side of your business on your behalf,” Ms. Walker points out.

▸ Meet with the companies that look good on paper. Continue to learn about the company as you negotiate a deal.

“[Choosing the right optical outsourcing company] is a big decision, so you want to have more than one meeting, and interview more than one company,” Ms. Walker explains. “It's not a decision you make in a first meeting.”

The next steps

The outsourcing company is given infrastructure and space to operate, but no rebranding takes place — current patients should not notice any changes.

For sales moving forward, outsourcing companies provide practices with a portion of sales, a percentage that varies for each company.

Though patients should not be aware of additional changes that take place behind the scenes, you may experience an adjustment period associated with relinquishing power within the optical and learning to “let go,” says Dr. Martinelli.

“Initially, there was a worry whether these folks coming really knew what they were doing,” he says.

However, despite fears that outsourcing the optical could negatively impact lab turnaround time and quality, Dr. Martinelli and those interviewed report improvements in these areas. OM

Editor's Note: Additional optical outsourcing companies were contacted but did not respond prior to press time. Use due diligence when performing your searches to determine each company's individual costs, benefits and policies.