By Staff

While reviewing the overall forecast for 2013 for the national economy is important, there are key changes in the optical industry that are predictors of what is to come. The Vision Council conducted several surveys and after careful analysis of the results, came to these conclusions. Check out these trends to see how they will impact your future and the future of your lab.

The Changing Face of our Customer Base

Raising the level of involvement by the owners in their dispensary remains a battle. More than half of their practice’s income is derived from their dispensary and yet in most cases this is the one aspect of their business to which they are the least connected. Many million-dollar-plus practices are being run by individuals with no formal training and no vested interest in the success and health of the business beyond their paycheck. The Ohio State college of Optometry now estimates that 73 percent of all revenue generated, in the average ECP’s office, comes from the dispensary. The optical laboratories success is becoming linked, more and more, to “opticians” many of whom have no formal training. Do you have a plan in place to train your customers?

The High Cost of Technology and the Speed at which it is Changing

Laboratories today are being forced, at an ever-advancing rate, to reinvest in technology in order to be able to fabricate the highly sophisticated products that continue to come onto the market. They no longer have the luxury of small investments, and making the wrong decision could be costly, if not totally detrimental. Having a good grasp of the ROI of these purchases is more important now than ever before and still requires somewhat of a leap of faith when they are introducing a new product, since they don’t know the answer to the questions: Will they sell and how many?

The high cost of this equipment and software make it increasingly difficult for a good many of the independent labs to handle these products in-house forcing them to outsource production. Labs find that proprietary lenses and treatments that preclude in-house manufacturing within the independent lab environment is an issue. When outsourcing these products, margins are squeezed so tight that many labs have to make the decision whether or not they can afford to provide them to their accounts. The question becomes, can a lab make money when they must outsource so many Rxs today. Labs are also finding that once they make the investment, the need to “ramp up” demand for the products specific to the technology is critical to the financial success of that investment.

Mass Merchandising

Most laboratories are intrinsically connected to independent ECP’s. Due to many circumstances, however, surrounding the marketplace, we continue to see erosion in their market share. Their decline will have a major impact on the wholesale laboratory as a successful business model.


The wholesale distribution channel has been completely turned upside down since lab consolidation began in the mid-90’s. This has created a unique set of dynamics in which laboratories find themselves competing with their suppliers, and having to position themselves against competitors with much deeper pockets, and the marketing wherewithal to create and drive a brand, and then limit the distribution of products in their favor

The Human Component

It remains a constant challenge to acquire, train, and retain the people necessary to help ensure the success of today’s laboratory. A laboratory today is finding that they need to spend more money to hire a more qualified type of candidate. Furthermore, successfully managing this human resource pool, takes more time than ever.

Third Party Program

Third party programs continue to be a threat to the way labs do business, can disrupt their current customer base, and impact their financial strength by dictating reimbursement schedules, etc.

Managed Care Risks Include:
• First there is the risk of losing a contract that represents a large portion of their business such as VSP.
• Second, it’s a problem for labs when third party plans dictate which lab the doctor can or cannot use and the order is fully controlled by the managed care company.
• Third, there are cases where the ECPs CAN send the order wherever they want but are forced to take significantly less money, so they approach the lab for a discount for these types of orders. This is the case with Eyemed.

National Healthcare
Labs are concerned about the effect of national healthcare on independents. One lab owner had several conversations with VSP, Essilor, Zeiss, VC executives and it appears to him that VSP, EyeMed, United Healthcare and Davis (Highmark BC/BS) may be the biggest players in the administration of eyeglass benefits under a national program. All these insurance plans have people lobbying in Washington to have national eyeglass benefits distributed through their networks. The vendor owned lab networks are in a position to produce a portion of these jobs due to their national presence. This independent lab owner found it hard to believe that an independent lab will be able to align themselves with any of these major players other than VSP. “Our VSP relationship is more critical now than ever,” he said.


Labtalk June 2020