Optometry Practices
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 19,000 optometry practices in the US are the main providers of vision care. About 55% of optometrist revenue comes from fees for patient care, which includes exams and treatment for problems. The sale of eyeglasses and contact lenses, known as “dispensing revenue,” accounts for over 40% of overall revenue. There are about 36,690 optometrists in the US – a majority work in private optometry practices.
Competition From Retail Chains
Independent optometry practices face competition from large retail optical chains, as well as mass merchandisers offering optical services.
Reimbursement Issues Affect Profit
Since about 30% of their revenue comes from managed care and vision plans, changing reimbursement rates and rules creates challenges for optometry practices.
Industry size & Structure
The average optometry practice has a single location, 8 employees, and about $947,000 in annual revenue.
- There are about 19,000 optometry practices in the US with $18 billion in revenue.
- On an annual basis, the typical optometry practice logs 2,500-3,500 patient visits per optometrist.
- There are about 36,690 optometrists in the US - a majority work in private optometry practices. The rest work for ophthalmologists, retail optical chains, hospitals, HMOs, or the military.
- Optometrists need a Doctor of Optometry (OD) degree, which requires 4 years of graduate study at one of 20 accredited schools of optometry in the US.
- All states require that optometrists be licensed, which requires an OD degree and passing a written National Board exam and a National, Regional, or State clinical exam. Licenses must be renewed every 1-3 years and continuing education credits are required for renewal.
Industry Forecast
Optometry Practices Industry Growth
Recent Developments
Dec 17, 2024 - Health Spending Continues Increasing
- US health spending increased 7.5% year over year in September and represented 17.7% of GDP, according to health care nonprofit organization Altarum. Personal health care spending growth in September was 7.8%, year over year, with utilization growth continuing to outpace price growth. Nominal health care wage growth in September 2024 was 3.6% year over year. The overall Health Care Price Index (HCPI) increased 2.6% year over year in September, down 0.4 percentage points from August’s revised value. Year-over-year growth in the overall Consumer Price Index (CPI) increased 0.2 percentage points to 2.6% in September and growth in the Producer Price Index (PPI) increased 0.5 percentage points to 2.4%.
- Optometry is experiencing a growing emphasis on specialization to meet the changing needs of patients, according to the “Career Considerations in Optometry” survey conducted by Jobson Research. A majority of respondents (67%) described themselves as primary eye care providers while one-third identified themselves either as a primary optometrist with subspecialty skills (30%) or a subspecialist (3%). Top subspecialty areas included dry eye (65%), cornea and contact lenses (64%), ocular disease (55%), and glaucoma (51%).
- Optometry practice owners have been selling their practices and retiring at an increasing rate during the past five years, according to Invision Magazine. This has boosted demand for associate Doctors of Optometry to fill the vacant spots. Private practice is not appealing when it’s a choice between going into debt to start your business or accepting a high six-figure salary and a generous package as an employee, according to Invision. Compensation demanded by young optometrists reflects the disparity between low supply and high demand. The average day rate for a part-time optometrist is now above $700 and, in some markets, above $800.
- Optometry practice employment increased slightly and average wages for nonsupervisory employees increased moderately during the first 10 months of 2024, according to the US Bureau of Labor Statistics. Physician and clinical services expenditures are projected to grow at a compound annual growth rate of 5.3% from 2021 to 2031, according to the Centers for Medicare and Medicaid Services. US optometry practice sales are forecast to grow at a 6.08% compounded annual rate from 2024 to 2028, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.
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