BUSINESS

  financial foundations

Three CL Numbers

Use these metrics to measure the success of your contact lens business

DAVID MILLS, O.D., M.B.A.

When evaluating your contact lens business, there are three metrics that will directly measure the financial health of this portion of your practice: (1) inventory level, (2) percentage of new patient fits and (3) percentage of specialty fits.

Inventory levels must be constantly monitored to ensure that you have the proper mix and quantity of contact lenses to meet the needs of your patients without overspending in slow-moving inventory.

Measuring the percentage of new patient fits and specialty fits will help you determine whether you are (a) growing the contact lens segment of your practice and (b) capitalizing on new lens technology that will allow you to successfully fit your patients who have “challenges,” such as a post-surgical irregular cornea.

How to Calculate

► Inventory levels: The simplest way to monitor your inventory levels is to utilize the inventory module in your office management system. The metrics to monitor are not only the number of units of inventory, but also the Cost of Goods value.

► Percentage of new patient fits: Calculate the number of new patient fits vs. the total number of active contact lens patients in the practice. This can be done by reviewing billed service codes. I define active contact lens patients as those who have been evaluated in the office within the last 18-month period.

► Percentage of specialty fits: Calculate the number of new and refit specialty fits by reviewing the billed contact lens service codes. Specialty fits should include multifocal, RGPs, sclerals, keratoconic and ortho-k fits.

Steps to fix

► Inventory levels: Again, your goal is to have a proper mix and quantity to meet demand without overspending. When reviewing inventory levels, determine whether the lens brands and quantities match your current fitting preferences. Investigate whether purchasing of “banks” or bulk purchasing makes the most sense for the business. Often times, it’s a mix of purchasing options that best control inventory costs.

► Percentage of new patient and specialty fits: If you are looking to grow your contact lens business, strive for a 5% growth rate per review period. In other words, your goal should be to have 5% more contact lens patients in the practice when compared with the previous six-month level.

An easy and effective way to increase these percentages is to introduce contact lens wear as a viable option for all contact lens candidates. The latest modalities and lens options available today allow for successful fits for most patients, especially those who previously were not contact lens candidates. OM

DR. MILLS PRACTICES AT OCEAN STATE EYE CARE IN WARWICK, R.I., AND HOLDS A M.B.A. FROM PROVIDENCE COLLEGE. E-MAIL HIM AT MILLSD@NECO.EDU, OR SEND COMMENTS TO OPTOMETRICMANAGEMENT@GMAIL.COM.