Ophthalmology and Optometry Coding Alert

Question: We just sat in on a webinar where they said every practice that sells eyewear should be calculating their capture rate and gross profit margin for eyewear. How do we do that?

Texas Subscriber

Answer: Your capture rate is the percentage of patients who receive prescriptions at your practice and subsequently fill those prescriptions at your optical center. Among eye care practices with private retail opticals, the capture rate is about 65 percent, according to Vision Watch.

Even if your capture rate is about average, you still have opportunities to boost your revenue. If your practice grosses $750,000 annually and you have an average capture rate, for example, you “lose” $160,000 annually to other retail opticals.

Ways to improve your optical’s capture include provider and staff training, a systemized “hand off” between provider and optical staff, appealing optical displays that patients see from the waiting area, a frame inventory that attracts your patient population, strategic pricing, savvy promotions, and excellent customer service.

To calculate the gross profit margin, subtract the annual cost-of-goods for your eyewear from your gross revenue for eyewear. Divide this number by eyewear gross revenue.

Independent optical shops managed by optometry practices average a 61 percent gross profit margin, according to Essilor MBA data. You’re doing really well if your gross profit margin is between 66 and 75 percent.

If your gross profit margin is on the low side, consider tracking the data more closely, adjusting retail prices to accommodate increases in wholesale frame pricing and lab prices, tracking optical chain pricing to make sure your pricing isn’t more competitive than it needs to be, and conducting pricing tests to learn what your market can bear.