If your practice is like mine, you receive several verification requests for contact lens prescriptions each week. Each verification request represents a patient that was in your office and then chose to buy his or her contact lenses elsewhere. That ultimately means lost revenue.
Did you do something wrong? Could your prices be too high? Are you an inconvenient source for materials?
According to Jobson Optical Research, as many as half of all contact lens patients may be purchasing their contact lenses from someplace other than their eye doctors office. How high is that number in your office?
In this first installment of Review of Optometrys three-part series, Take Back Your Contact Lens Practice, Ill describe a formula that can help you analyze, and perhaps improve, your annual contact lens sales.
Earlier this year, I seriously considered adding an e-commerce module to my existing Web site. I was concerned that the Fairness to Contact Lens Consumers Act was pushing more of my patients to purchase their contact lenses online.
But did I really want to encourage an otherwise loyal patient base to look to the Internet for contact lenses?
Before I took that risk, I wanted a better understanding of how many contact lens sales I was actually losing each year. So, I tried to calculate how many patients actually ordered contact lenses from my office.
I developed a formula that I call the PASS Stat, or Percentage of Annual Supplies Sold Statistic. Any practitioner can use this simple formula to gauge the health of his or her contact lens practice.
By using this formula, I learned that my contact lens practice was not all gloom and doom. I was pleasantly surprised to learn that of all contact lenses prescribed, my practice keeps more than 70% of its potential sales.
Normally, our office loses a few Rxes per month, despite our best efforts, and a large percentage of patients still seem to prefer the six-month supply. However, my staff has also been very successful in educating patients about the value of an annual supply. Ive since decided not to risk jumping into e-commerce.
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If you track your PASS Stat regularly, youll be surprised how easily you can achieve your goals. Like me, you may find the PASS Stat useful when making business decisions in your practice. Most important, the PASS Stat allows you to check the pulse of your contact lens practice during a demanding and highly competitive time for contact lenses.
Whats Your PASS Stat?
The PASS Stat formula divides the total annual contact lens supplies sold in your practice by the total number of patient encounters. To determine your PASS Stat, follow these steps:
1. Determine how many disposable contact lens exams you did last year. Include all disposable fits, evaluations and refits, whether they are toric, cosmetic, bifocal or spherical. Do not include follow-up visits or contact lens checks. Count each patient only once.
For my practice, I used only disposable lens fits in my formula. If you have a large GP or conventional soft lens practice, then you may wish to include these patient encounters.
2. Calculate how many boxes of contact lenses you sold last year (or, count individual lenses for GP and conventional fits). Sort the number of boxes sold by replacement schedule. For example, group all the monthly lenses together and all the two-week lenses together.
3. Calculate the total annual supplies your office sold. First, divide the number of boxes sold by the number of boxes in an annual supply of that lens type. An annual supply of a monthly lens is four boxes, while an annual supply of a two-week lens is eight boxes.
In the example given (see Sample Practice Data) a practice that sold 400 boxes of Acuvue 2 (a two-week lens) would divide that number by eight boxes in a one-year supply. This practice sold the equivalent of 50 annual supplies of Acuvue lenses. If the same practice also sold 400 boxes of Focus Monthly (four boxes in an annual supply), then it sold 100 annual supplies of Focus Monthly. Add together the annual supplies that your office sold for each type of lens to determine the total number of annual supplies sold.
| Sample Practice Data |
|
Lens Type |
# Sold |
# Boxes/Annual Supply |
# Annual Supplies Sold |
|
Acuvue 2 |
400 |
8 |
50 |
|
Focus Monthly |
400 |
4 |
100 |
|
Frequency 55 Toric |
150 |
4 |
37.5 |
|
Totals |
950 |
187.5 |
|
Total number of contact lens evaluations/fits or exams = 230 Total # of annual supplies/total # of contact lens fits = 187.5/230 = 81.5% The PASS Stat for this fictional practice is 81.5%. This is not an actual percentage of patients who purchased an annual supply. Instead, this is the equivalent percentage by averaging all contact sales in the office over a specified period of time. |
4. Divide the total number of annual supplies sold by the number of patient encounters. So, if a practice sold 950 boxes, or 187.5 annual supplies, of contact lenses and did 230 contact lens fits last year, its PASS Stat would be 81.5% (187.5 annual supplies divided by 230 fits).
What Factors Impact The Stat?
The PASS Stat involves simple arithmetic, but it will tell you much about the health of your contact lens practice.
The statistic is only an equivalent percentagean average that tells you what typically happens in your practice. You will not measure the exact number of individual patients who purchase an annual supply of lenses. After all, some patients walk with their Rxes, while others order a three-, six- or even 12-month supply from your practice.
If you sell contact lenses to walk-in patients who have a valid Rx, then your PASS Stat will be affected since these patients did not have an exam in your office. (Thats okay; the statistic still offers valuable information.)
The statistic also considers patients who initially refuse to buy an annual supply, but decide to reorder from your office later in the same year. It would be too time consuming to ask your staff to count the exact number of annual supplies sold each year. Instead, the PASS Stat is a shortcut that calculates an average.
What Does the PASS Stat Mean?
What is an acceptable PASS Stat? In a perfect world, everyones PASS Stat would be 100%. Realistically, this will not happen in todays marketplace.
Suppose your PASS Stat is:
70% or higher. Your practice is excelling in a very difficult contact lens market. A PASS Stat of 70% is an attainable goal for most practices, although a PASS Stat of 60 to 65% is reasonable.
Think of it this way: If 50% of your patients purchase an annual supply and the other 50% order a six-month supply, then your PASS Stat will be 75%.
Continue to track your PASS Stat and set annual goals. Even small increases in the PASS Stat can create large increases in your gross sales.
55% to 65%. Your office is effective at presenting the option of buying an annual supply of contact lenses. To increase this percentage, educate your staff to properly present the price per box after the manufacturers rebate. Consider quoting the after rebate price together with your own in-office volume discounts.
50% or lower. Your practice is hemorrhaging contact lens sales. A large percentage of your patients buy their contact lenses elsewhere. Or, they buy only a three- to six-month supply from you.
If your practice is losing this many contact lens sales, you need to improve how you educate patients about contact lens purchases and compliance. Also, you should look to reposition your practice in the contact lens market using volume discounts, rebates, patient education and possibly
e-commerce.
Grow Your PASS Stat
Even if your practice has a 75% PASS Stat, youre still losing 25% of potential contact lens sales. So, how can you grow your PASS Stat?
First, monitor your PASS Stat quarterly and set goals within your practice. Share these goals with your staff, and consider offering a bonus or reward when the goal is reached. The PASS Stat doesnt have to be a secret that you keep from your staff. Tell your employees what it means, and develop a plan to reach your goals.
Consider some simple steps that you can implement in your practice to market an annual supply of contact lenses. Take advantage of manufacturers rebates and offer your patients a 10% or 15% discount on volume orders. When quoting a price for boxes of lenses over the phone or in person, you may wish to quote the after rebate price. (To avoid confusion, always make sure your staff clearly explains to patients that the lower price per box that you are offering is the after rebate price.)
Also, some practices offer additional discounts on eyeglasses, sunglasses and professional fees when the patient purchases an annual supply of contact lenses.
Even if your contact lens practice is already at 70%, continue to track your PASS Stat and set new goals. Small increases in the PASS Stat produce large increases in gross practice revenue.
Education is Key
Patient education is key to selling an annual supply of contact lenses.
Patients must understand the value of an annual supply before they will purchase it. Why would a non-compliant patient care about stocking up on contacts? A patient who wears the same dirty lenses for five to six months will fail to see the value in an annual supply of lenses.
The education process starts in the exam room. Doctors who create an environment in which contact lens abusers are tolerated or even passively permitted should not be surprised when patients purchase a limited quantity of contact lenses.
Patient education about the value of an annual supply is not just about selling contact lenses. Imagine the liability of having a practice full of contact lens abusers! Non-compliance is risky for doctors and patients, and it certainly is not a practice builder.
You do not have to educate patients alone. Train your staff to educate them as well. The time spent working with employees in a staff meeting pays huge dividends for months and years to come.
Finally, you may still be wondering, why the emphasis on calculating the percentage of annual supplies sold?
The answer is simple. By knowing the percentage of patients who purchase an annual supply of lenses in your office, you also know the percentage of sales that leaves your office.
If a patient was hemorrhaging, no matter how slowly, you would certainly take action. Yet, many practices are hemorrhaging contact lens sales without even knowing how much they are losing.
Make sure you know exactly how much of your contact lens practice is exiting your office. You may be pleasantly surprised, or you may be shocked, when you see the results.
Either way, the Percentage of Annual Supplies Sold formula will allow you to check the pulse of your contact lens practice.
Dr. Milburn is a graduate of The Ohio State University College of Optometry. In 2003, he authored the National Contact Lens Enforcement Petition to the FDA. He is in private group practice with his wife, Dr. Annamarie Milburn. They have practice locations in Medina and Wooster, Ohio, www.drsmilburn. com.
