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, 6-7 employees, and about $866,000 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
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Apr 2, 2024 - Strong Sales Growth Expected
                                  • US optometry practice sales are forecast to grow at a 6.17% compounded annual rate from 2022 to 2027, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc. Employment increased slightly during 2023 while average wages for nonsupervisory employees decreased slightly, according to the US Bureau of Labor Statistics.
                                  • Increased fundraising by private equity (PE) firms in 2023 is not expected to translate into increased health care industry deal counts in 2024, according to Home Health Care News. “Dry powder or available capital is not always indicative of future dealmaking,” Rebecca Springer, lead health care analyst at PitchBook, told Home Health Care News. “The typical investment period for a 10-year fund is five years with some additional flexibility through a number of technicalities. In 2024, we anticipate that PE health care managers will focus on deploying capital into existing portfolio companies, lower-middle-market platforms, and occasionally pursue opportunistic carve outs.” Health care’s share of global PE deal count peaked at 13.7% in 2020. That number fell to 10.8% in 2023— its lowest level since 2015.
                                  • Nearly 70% of US adults surveyed by CooperVision reported digital eye strain symptoms. Digital eye strain symptoms include tired eyes, dryness, eye irritation, headaches, or blurry vision. More than half of respondents reported spending an average of six or more hours per day on a digital device, and one in four reported spending an average of nine hours or more in front of a screen. About 79% of participants reported spending three or more hours using a smartphone, and 62% reported that their smartphone usage has increased over the past two years. The survey also showed that while 99% of respondents with digital eye strain reported trying at least one method for reducing symptoms, general awareness and implementation of these tools and techniques was low. Contact lenses designed to help with digital eye strain were the least known tool, the report stated.
                                  • Increasing screen time is associated with an increased risk of device-related eye issues like myopia (an eye disease that causes distant objects to appear blurry while close objects appear normal), according to the American Optometric Association (AOA). Almost 70% of individuals working in offices jobs are exposed to excessive screen time compared to 42% of individuals in other professions, according to the AOA. Only two in 10 parents are aware of increasing incidence of myopia, and about two in five parents know what myopia is, according to research from the Vision Council. Roughly 13% of parents recognized that lack of outdoor time is a risk factor for developing myopia, but 57% recognized that screen time and genetics are risk factors, according to the report. About 37% recognized that vision loss is associated with myopia. Sixty-two percent of parents indicated that their child’s eye care provider recommended a treatment plan, 42% said their child was given glasses, and 83% said the treatment plan was effective.
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