Optometry Practices

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 19,500 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 55% 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, 6-7 employees, and about $866,000 in annual revenue.

    • On an annual basis, the typical optometry practice logs 2,500-3,500 patient visits per optometrist.
    • There are about 19,500 optometry practices in the US with $17 billion in revenue.
    • About 81% of optometry practices have less than 10 employees.
    • 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
                                  Source: Vertical IQ and Inforum

                                  Coronavirus Update

                                  May 4, 2022 - Telehealth Use Likely To Continue
                                  • Legislation introduced in the US Congress would prohibit vision and dental plans from price-fixing and establish other measures to protect patients from rising costs and aggressive behavior by insurers. The Dental and Optometric Care (DOC) Access Act would also provide doctors the freedom to choose laboratories that best fit the needs of their patients. It would also limit insurers from dictating network agreements longer than two years. Supporters say that the bill supports the Biden administration's Executive Order on Promoting Competition in the American Economy, which is intended to reduce excessive concentration of power and potential market abuses through its executive order promoting competition in the American economy.
                                  • Some 88% of consumers surveyed by Sykes want to continue using telehealth for non-urgent visits in the future (up from the 20% of patients that used telehealth before the coronavirus pandemic). About 58% of healthcare providers surveyed view telehealth more favorably now than they did in 2019, and by spring of 2021, 84% of those surveyed were offering virtual visits.
                                  • Demand is strong for traditional Small Business Administration (SBA) loan programs now that the Paycheck Protection Program is winding down. “In our footprint, we’re seeing a significant uptick in both the number of loans and dollars disbursed for our microloan and 504 loan programs,” said Angel Marschik, deputy district director for the SBA’s Western Pennsylvania District Office in Pittsburgh. “Our flagship 7(a) loan program numbers are on pace with second-quarter data from fiscal year 2021. As more lenders move away from PPP forgiveness processing, we anticipate those number to increase as well.”
                                  • Home confinement during the coronavirus pandemic appears to be associated with an increase in myopia prevalence in younger school-aged children, according to data published in JAMA Ophthalmology magazine. School closures and a shift to more online courses meant that millions of children spent large portions of their days working at computers instead of being outside. These are considered to be contributing factors to the increase. Children ages 6 years to 8 years had the highest prevalence of myopia, with only minimal shifts in the 9- to 13-year-olds.
                                  • A 2021 research review details how lockdown strategies may have led to an increase in what the authors call “quarantine dry eye.” The authors point to more screen time, disruption of nutritious eating habits, and irregular sleep patterns as reasons for more cases of dry eye disease. They cite previous research which found that indoor air quality contributes to dry eye. Air conditioning increases airflow over your eyes. When combined with work in front of screens, it adds to tear evaporation. Chronic dry eye is a potentially serious condition that can result in eye discomfort and vision problems, according to the National Eye Institute.
                                  • Many optometry practices turned to telehealth after the American Optometric Association advised optometrists to postpone all routine eye care visits on March 19, 2020. Policymakers and insurers across the country say that they are eliminating copayments, deductibles, and other barriers to telemedicine, but the process hasn't always been smooth. Industry experts say that many insurers have waived copays and other telehealth cost sharing for in-network doctors only.
                                  • Experts note that carriers promoting telehealth have little power to change telemedicine benefits for self-insured employers whose claims they process. Blue Cross Blue Shield, Aetna, Cigna, and UnitedHealthcare, four of the largest insurance companies, say that improved telehealth benefits don’t necessarily apply to self-insured employers. Neither governors nor state insurance regulators can force self-insurance plans, which are regulated federally, to upgrade telehealth coverage.
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