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									Patient benefits of a fee based contact lens plan Changes to the Opticians Act in June 2005 regarding the supply of contact lenses caught many independent practices by surprise. The changes caused a great deal of confusion for many, whilst others saw it as an opportunity. Some of these have introduced feebased pricing plans, which provide greater pricing transparency for patients, are fairer for practices and more easily understood by all practice personnel. Martin Russ considers how your patients can still benefit from competitively priced contact lenses, as well as receive all the clinical care they may require. Many independent optical practices consider themselves to be health care providers, but operate in a retail environment. This can cause confusion, not just for practice personnel, but for consumers as well. The traditional optical practice model includes the provision of professional care, linked to the supply of spectacles or contact lenses, with the productrelated profit including an element to subsidise the cost of the optometrist’s or contact lens optician’s time. Yet other professions, such as lawyers, veterinary surgeons and accountants, are able to charge more realistically and transparently for their time. And, importantly the public generally understand why. The key factor differentiating many optical practices is service and professional care. This means that most consumers will not consider changing from one practice to another, unless they are disappointed by poor service or they perceive they could receive a similar level of service at a much lower cost elsewhere. Considering this traditional model it is no wonder many practices reconsidered actively promoting contact lenses, when other sometimes-newer outlet channels appeared to be offering the same branded lenses for a fraction of the price. However, what was being offered were contact lenses at low margins often without the aftercare, service and support that were included by traditional optical practices. The risk Many practices seem almost afraid to be more transparent about the pricing structures they use, especially those relating to the supply of contact lenses. Unfortunately, a lack of openness and transparency has meant that many contact lens wearers are suspicious about the value, or apparent lack of it, on offer. This has led them to consider lenses from alternative sources, i.e. mail order and Internet. Of course, by sourcing their lenses in this way does not guarantee they will receive or even understand the importance of regular and consistent aftercare. The risk is that many will gradually drift out of contact lens wear, missing out on the convenience and lifestyle that it afforded them. Or, even worse perhaps, they will continue to wear lenses, but not change them or care for them as often as they should, leading to a greater risk of eye infections. Therefore the opportunity to offer a care based scheme for all contact lens wearers, for an affordable fixed monthly fee, for all full and part-time wearers exists. Care and service With the supply and fitting of contact lenses being very much a care and service led activity it is worth considering how the consumer values service. According to a UK based study conducted by Accenture in the last six months across all businesses, 80 per cent of consumers feel that the quality of customer service has declined in the past six years. However, the same survey identified that their expectations relating to service had also increased in the same period. The conclusions from this appear to be that consumers demand good service, however businesses cannot remain complacent and expect consumers to still be satisfied with similar levels of service that they once were. The

challenge for practices must be to continually review and improve the levels of care and service they provide. Accenture also found that the majority of consumers prefer ‘local expert knowledge’. This provides a great opportunity for independent practices to thrive, as long as they communicate effectively with potential patients. To confirm this, a survey conducted by the Henley Centre found that 65 per cent of UK consumers would always be loyal to a supplier who provided good customer service. It also found that only 28 per cent made buying decisions purely on price. The opportunity This research supports the opportunity for local practices to offer contact lenses via a scheme that is flexible, ties patients in and provides a wide range of benefits, as well as greater transparency regarding the cost of the lenses themselves. Of course, it must also ensure that practice profitability is maintained too. The majority of practices already have monthly payment schemes for contact lens wearers. However, the main drawback with these schemes is that they are not transparent. Forward thinking practices have modified their existing schemes to show more clearly how much is being charged for each element on a menu basis. By breaking down the monthly fee, contact lens wearers are better able to understand exactly what they are paying for. Additionally, the actual price paid for the contact lenses will appear more competitive, even when compared with the majority of alternative contact lens suppliers. Some practices have also incorporated additional benefits to make their scheme even more attractive. These include an eye examination every two years and discounts on all spectacle and sunglass purchases. As well as being more appealing to existing and potential contact lens wearers, practice support staff have found it easier to explain and are therefore more confident when handling enquiries. This offers practices the opportunity to grow their contact lens business, whilst charging fairly for professional time and yet provide competitively priced eyewear. This is a similar business model to that used by eye care payment plan schemes, which are becoming increasingly popular. If practices are to be confident of ensuring all patients make an informed choice about their eyewear options they should offer contact lenses more often. This is supported by a survey conducted on behalf of the Association of Contact Lens Manufacturers (ACLM), which found ‘48% of spectacle wearers would consider contact lenses as well, (as spectacles) if their practitioner recommended them’. Professional fee template Professional fee templates exist to help practices calculate the true cost of their chairtime and then apply a modest mark up to the cost price of contact lenses and solutions. They should be flexible to allow for any additional charges relating to the collection of regular monthly payments from patients’ bank accounts. Generally, they should consider; total annual practice turnover, gross profit, expressed as a percentage, other information such as number of clinic hours worked per day by each optometrist and or contact lens optician, followed by the number of clinic days per week and weeks worked each year. To provide an accurate cost of each hour of clinic time, based on the allocation of gross profit, it is important to consider the average percentage of appointments attended by patients. This is called appointment utilisation. When the length of each eye examination appointment is considered the cost of providing an eye examination can be calculated. In the author’s experience this figure can range anything

between £50 and £150; somewhat more than the amount paid by the NHS or charged privately for an eye examination by most practices! Of course, this figure is dependent on whether a practice is fulltime or part-time, amongst other factors. Once an hourly cost has been established the cost to fit a new contact lens wearer can be calculated. The final stage is to calculate the total cost of the total annual chair time to deliver aftercare. Aftercare and fitting options can be decided upon and a realistic monthly fee established. This will be dependent on the inclusion of aftercare, eye examinations and/or initial fitting fees. The most popular option is to include annual aftercare and an eye examination once every two years. For new wearers, the initial fitting fee can be fully or partially covered by charging an initial payment upon registration on the scheme. Of course, because clinical time is being charged for realistically, covering all overheads and desired profitability, there is less need to make a large margin when supplying contact lens products to members of the scheme. Handling enquiries To support contact lens related enquiries all practice personnel will need to be able to answer basic questions, relating to the wearing and caring of contact lenses, confidently. In addition, they will need to know how to answer the ‘How much are contact lenses?’ question. Many practices answer this question with ‘From £x per month.’ Unfortunately this does not provide any meaningful information and is likely to encourage the caller to go to the practice quoting the lowest price, without first understanding any other factors associated with the wearing of contact lenses and the options available. However, if more information is provided, the caller will understand that there is more to contact lens wear than just going to what sounds like the lowest priced outlet. They will realise that, just like when making any other purchasing decision, there is more to think about than price alone. A better response includes, ‘What contact lenses do you want?' Most will not know, but they will be informed, in a subtle way, that there are different types available and that as a practice you will provide them with the best lenses for their needs. Following this, it is likely the caller will start to explain their motivation, the activities they want to do and how often they want to wear contact lenses. This will help to establish a rapport. It is worth remembering that many may be nervous about the prospect of putting something in their eye for the first time. They need to be reassured, as well as feel confident that the practice they choose is competent and able to do the best job for them. After this a price can be quoted for one of the practice’s more popular contact lens options i.e. ‘The cost of daily disposable lenses is £yx per month. This competitive price is available when you become a member of our contact lens scheme. For just £x per month you will be entitled to regular contact lens aftercare appointments and an eye examination every two years. This has been designed to provide you with complete peace of mind and value for money contact lenses. In addition you will be able to benefit from a discount of yz% on any spectacles you purchase. You will require an initial consultation with our Optometrist/Contact Lens Optician to help you decide which lenses will be best for you, depending on your prescription, the shape of your eyes and how often you wish to wear them. This will also include you being taught how to handle your lenses. Can I book an appointment for you?’ By answering an enquiry in this way, the caller will realise that your service is comprehensive and the prices quoted inclusive. It will make them suspicious that practices that quote a very low price only, may not include all the lenses and services that you do.

Unless a particularly good rapport has been established, it would be unusual for a caller to book an appointment at this stage, because they will probably want to speak to other practices first. However, you may want to offer them some information on your scheme, to support what you have said. Do ensure that the practice’s name, address and telephone numbers are on all pieces of literature that leave your practice, to make it easier for customers to contact you! To provide greater confidence in contact lens related prices a fee-based scheme will help your patients understand that the majority of the cost is for the professional time involved, i.e. the initial fitting fee, aftercare appointments and eye examinations, if included. This method generally generates a similar income to before, however it provides much greater confidence in the public and helps them to appreciate and value the clinical care they will receive. Eyewear products, especially contact lenses, will now become perceived as more of a commodity, but because your practice’s prices for them will not be that much more than those from alternative sources patient’s will have greater confidence in purchasing them from you. The author Martin Russ is a Director of TMR Ltd, a specialist optical consultancy that provide customised training, marketing and business services designed to improve the performance of optical practices. For more information, see, telephone 01252 626137 or e-mail Please send completed answer sheet to: TMR Ltd, 341 Fleet Road, Fleet. Hampshire. GU51 3NT

[Multiple-choice questionnaire] [Please note there is only one correct answer.] 1. What is a key factor that differentiates many practices? A. Product range B. Professional care C. Pricing D. Premises 2. Which of the following do consumers not want according a survey by Accenture? A. Expert knowledge B. Good service C. Local knowledge D. Low prices 3. What percentage of consumers make buying decisions purely on price? A. 8% B. 18% C. 28% D. 38%

4. Which pricing policy provides the greatest amount of transparency? A. ‘All in’ pricing B. ‘Menu’ pricing C. Low prices D. Premium pricing 5. What percentage of spectacle wearers would consider contact lenses if recommended by their practitioner? A. 18% B. 28% C. 38% D. 48% 6. When handling a contact lens price enquiry what is it better to say? A. ‘What type of lens do you want?’ B. ‘Why are you asking?’ C. ‘£160 per year’ D. ‘From £10 per month’

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