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 19,500 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

                                  Recent Developments

                                  Nov 1, 2022 - Industry Hit Hard By Workforce Exits
                                  • An estimated 333,942 healthcare providers dropped out of the workforce in 2021, according to Definitive Healthcare. The physician specialties hit hardest by workforce exits are internal medicine (-15,000 providers), family practice (-13,015), clinical psychology (-10,874), chiropractic (-10,662), psychiatry (-8,629), optometry (-8,292), anesthesiology (-7,459), pediatric medicine (-7,330) and emergency medicine (-5,530). Combined, these nine specialties saw the loss of 86,791 physicians in 2021, according to Definitive's analysis.
                                  • California Governor Gavin Newsom vetoed legislation that would have allowed optometrists in the state to perform anterior segment laser and minor procedures which involve the use of a scalpel or injections. The proposal would have meant that an individual would no longer be required to complete medical school and the required surgical training to become licensed to perform eye surgery in the state of California, according to industry experts. Many legal experts note that new California laws are often used as models for legislative proposals in other states. Stephen McLeod, CEO of the American Academy of Ophthalmology, says that the proposal would have allowed optometrists to perform scalpel and laser eye surgeries and medication injections after taking a 32-hour course offering lectures and practice on models, passing a national test, also on models, and completing a small number of training cases on patients.
                                  • Some optometry practices have begun helping their customers recycle their disposable plastic contact lenses. Experts say that the only way to do this is through the TerraCycle and Bausch + Lomb's ONE by ONE recycling program, as most recycling facilities don't accept contact lenses since they're so small and made from medical-grade plastic. Lenses sent to recycling facilities are currently sorted out and sent to landfills. “Programs like the Bausch + Lomb Every Contact Counts Recycling Program allow eye doctors to work within their community and take an active role in preserving the environment, beyond what their local municipal recycling programs are able to provide,” said Tom Szaky, founder and CEO of TerraCycle.
                                  • 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.
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