A new pricing structure for contact lenses has proved successful for a Blackpool practice, writes Martin Russ
Between them, the six employees of family practice Woodhouse Opticians, Blackpool, have over 65 years' experience in optics.
Owned by optometrist Steve Woodhouse, the practice was opened in 1962 by his father. Steve joined as a DO in 1980, qualifying as an optometrist in 1999.
Today, the team includes a DO/contact lens optician, reception and accounts staff and a full-time technician. Quality and patient needs are at the forefront of everything Woodhouse Opticians offers, and much thought was given to implementing a new contact lens pricing structure. All team members were involved in setting the new pricing structure.
MONTHLY FEE
The practice - like many others - previously charged an initial fitting fee for contact lenses and then a monthly fee, which included lenses, aftercare and solutions. Yet this fee was never explained patients. Contact lens wearers assumed the fee was for products only - lenses and solutions - and no value was placed on professional care. Eye examinations were charged for as the need arose. About 18 months ago, some contact lens wearers started to query the cost of contact lenses, and even after staff explained the fee was for more than just contact lenses, some still felt that they were paying too much.
FEE-BASED TEMPLATE
This disappointed the practice team, and they no longer promoted contact lenses as they once had and lost confidence in explaining the existing charges. It was agreed that a new, more transparent, pricing structure was needed, but there was concern this would lead to higher prices or contact lenses becoming less profitable.
However, after Steve attended a seminar hosted by CIBA Vision, he recognised it was possible to develop a new contact lens pricing structure that staff and patients could easily understand. In addition, it would provide a range of benefits to the patient, while still maintaining practice profitability.
Attendees were introduced to a fee calculator, which enables practice owners to calculate the true cost of clinical time. Practice specific data is in-putted to provide individual clinical fee costs for each practice.
The data is easy to obtain, as most can be taken from the latest accounts and the practice diary. Once the data was entered, it became clear to Steve how much needed to be charged for clinical time, and he realised charging £25 for a 30-minute eye examination was unrealistic.
Woodhouse Opticians increased the private eye examination fee to £30, with an additional £20 charge for retinal imaging. The team has found it more effective to promote a 'comprehensive eye examination including retinal imaging for £50', instead of offering retinal imaging as an additional service.
After in-putting practice data and analysing the figures produced by the CIBA Vision Professional Fee Template, staff felt the most popular option for contact lens wearers would be regular aftercare and an eye examination, including retinal imaging, every two years. For most contact lens wearers, regular aftercare would include two aftercare appointments a year. The team wished to offer a package of benefits, and included a 20 per cent discount on complete pairs of spectacles and a 10 per cent discount on contact lenses, spectacle accessories and non-prescription sunglasses. Emergency aftercare appointments were also included.
Accounting for practice overheads, the monthly fee for contact lens wearers on the full package was calculated at £11 per month. Most existing patients on the old scheme would only be paying slightly more, but would gain more in terms of benefits. Contact lens product prices were calculated by adding 20 per cent to the cost price paid by the practice and then adding VAT. This meant that the majority of contact lenses are being supplied for around 10 per cent less than UK-based mail order and internet suppliers.
For those who do not want a regular examination, a charge of £7.50 per month was set. However, children who wear contact lenses and want retinal imaging, but have examinations funded by the NHS, are charged £10 per month.
So far, the vast majority of existing wearers have accepted the new pricing structure happily. Many are paying around £1.30 per month more, while some are paying up to £1 a month less.
Offering this new scheme to new wearers has been straightforward, as when they recognise the benefits and the competitive prices, they understand the scheme is good value. A practice brochure has been produced to clearly explain the scheme, and this helps the team explain the scheme with confidence.
ADMINISTRATION
The practice is keen to have all payments made by direct debit, but this requires changing to a more flexible business bank account. However, the new bank requires photographic identification from each of the directors, which includes Steve's nonagenarian father.
Unfortunately, he has never owned a passport or driving licence, so they are unable to proceed with this at present. Currently they are using an agency to collect direct debit payments on their behalf. An administration charge for this service is included in the monthly fees and equates to about 50p per payment, per month. Each month a report is sent to the practice showing all payments made by patient name and amount.
FUTURE PLANS
In the future, the practice will be offering an additional benefit of anterior segment photography for all contact lens wearers, when attending aftercare appointments.
As well as the obvious clinical benefits, this will also add greater perceived value for patients. The practice team are now eager to develop a scheme for spectacle wearers. This will provide patients with all the benefits of regular full eye examinations, including retinal imaging, as well as a substantial discount on spectacles purchased.
A CD-Rom containing the Professional Fee Template calculator and practice brochure is available free of charge from CIBA Vision. Contact customer services on 0870 608 20 20 to order a copy.
? Martin Russ is a director of TMR. For more information, see www.tmr.co.uk, telephone 01252 626137 or email martin@tmr.co.uk