When we think of attending a major ophthalmology conference, we tend to think of marque seminars on various diseases and patient studies. These can include some of the most exciting cases to learn from in our industry — but other issues, which often get less attention, are just as important. A clinic cannot, for example, provide excellent patient care if it is run in a low-quality manner.
This is why some of the less well trumpeted, yet fascinating, presentations often focus on management issues, such as personnel training and proper record keeping. In this vein, Setting and Using Effective Benchmarking Standards for Your Optical Dispensary was a standout at the American Academy of Ophthalmology (AAO 2020 Virtual) conference last November 2020. This presentation was given by Aron Arkon, a senior consultant at Arthur De Gennaro & Associates, South Carolina, USA.
Increasing Efficiency and Profitability
The presentation focused on how clinicians can identify inefficiencies and determine profitability in optical dispensaries. Arkon points out that “very little or no specific data exists for the ophthalmological space.” Based on the average rate of optical store revenue of US$255,000, Arkon extolled the importance of a healthy patient capture rate.
“The capture rate allows you to forecast the revenue volume for your dispensary. All exams that generate a prescription (Rx), 30-day post-ops and all other Rxs generated are divided by captured daily Rxs, plus returning patients, plus outside Rx, which equals the daily capture rate,” Arkon said.
“We want to start with 50%, although many practices fall below that level. Our target benchmark for our clients is 65%. And the best cases average somewhere between 70 and 85%,” he said.
Arkon went on to examine some of the best benchmark levels for an optician’s clinic, like a top target 15% for payroll expenditure, and 38% for frame and lens expenditure. The overarching theme of the presentation was balancing — for example, how to balance the various aspects of optical practice to ensure a healthy and efficient practice. Arkon went into detail on more areas of note, including niche areas in optical practice like digital flat tops and Trivex sales.
Sales are obviously an area of concern to opticians which is why Arkon focused particular attention here. He recommended that his audience focus attention on creating specific benchmark profit levels for each product they sell. In particular, and perhaps unsurprisingly, standard glasses were the most important.
“The formula that we will use is total eyeglass — that is the total revenue of eyeglasses divided by the total number of complete pairs sold on average. The benchmark should therefore be about US$380 on average for an ophthalmology practice, with our best-in-class clients coming in at around US$500,” Arkon said.
“After this, what are your next steps? I would recommend that you begin to gather analytical data from your computer system. Second, compare your data to the benchmarking standards that I’ve introduced in this presentation. Third: Identify which areas are underperforming and identify those as improvement areas. Fourth, develop an action plan,” he concluded.
Editor’s Note: The American Academy of Ophthalmology annual meeting (AAO 2020 Virtual) was held from November 13 to 15, 2020. Reporting for this story took place during the event.