Finances

What Eyecare Demand & Optical Industry Numbers Say About Your Future as an Independent OD

Lori Blackmer, OD,Owner, Picayune Eye Clinic in Picayune, MS.

Erich Mattei (right as you look at photo) with Lori Blackmer, OD, owner of Picayune Eye Clinic in Picayune, Miss. He notes the most critical factors to pay attention to when considering the future of independent optometry.

Part one of a two-part article offering a numbers-based look at the future of independent optometry.

By Erich H. Mattei, MBA

Jan. 2, 2025

The demand for vision, medical and specialty eyecare is growing, and the scope of modern optometry is expanding.

Meanwhile, competition to be providers of eyecare also is increasing. All of that begs the question: what is the outlook for private practice optometry?

This article explores the public health economics of eyecare. It provides an evaluation of stakeholder benefits across modes of care and looks at the role of private practice optometry in modern healthcare, and how to set yourself and your practice up for success across your business lifecycle.

Public Health Economics

The Demand: Rapid Growth

Lifestyle choices, environmental factors and longevity are resulting in an increased demand for vision, medical and specialty eyecare. According to VisionWatch, there were 111 million routine exams performed in 2020, forecast to exceed 113M/year by 2030.¹

The “Eyeconomist,” Richard Edlow, OD, released a report through the AOA illustrating how the growing 65+ crowd, which was 15 percent of the U.S. population in 2016, and is forecast to be nearly 25 percent by 2060, will have a significant impact on the need for medical eyecare. While only half of those under age 65 utilize medical eyecare, over 90 percent of those 65+ need medical eyecare.²

Thus, the 60 million medical eye exams performed in 2020 are forecast to grow by nearly 27 percent by 2030 to over 76 million.¹Moreover, the need for advanced diagnostic testing will increase by over 16 percent to approximately 10 million tests/year in 2030, and surgical care, too, will increase by a net +1.4 million cataracts/year by (33 percent growth over 2020).¹

Demand Growth 2020 to 2030¹:

Routine Exams: 1.8 percent
Medical Exams: 26.5 percent
Diagnostic Tests: 16.9 percent
Cataract Surgery: 33.3 percent

The Supply: Slow Growth

Delivering optimal care across the population will require eyecare professionals and allied health to collaborate like never before. By 2030, there will be nearly 200 million patient encounters per year, which is a radical increase over the 171 million of 2022, plus over 1.4 million additional cataract surgeries. Considering that many markets are already under-served, how will ECPs meet this growing need?

By the year 2030, there will be approximately 53,000 full-time equivalent (FTE) optometrists. With the average OD performing 2,400 patient encounters per year, that’s 127 million patient encounters served by optometry.

Stakeholder Benefits Across Modes of Care

State of Healthcare:

Recent years have seen our healthcare system experience record levels of provider burnout, ever-increasing cost of care and deterioration of overall quality of care.^4,5,6,7,8Though these trends may seem grim, a deeper look finds promise in private practice.^4,5,6,7,8

Doctor Burnout, Fulfillment & Income:

Doctors in private practice experience less burnout and emotional and mental fatigue, better balance in the workplace and greater professional fulfillment, according to Bryan Robinson, Ph.D. and author of “Chained to the Desk in a Hybrid World: A Guide to Balance.” Robinson spearheaded a survey of 1000 Americans and medical professionals to compare overall sentiments hospital versus private practice⁶.

Doctor experience across modes of care⁶:

Rate of Burnout: 53 percent health system vs. 44 percent PP
High levels of burnout: 45 percent health system 37 percent PP
Need additional support: 60 percent health system vs. 48 percent PP
Feel appreciated: 56 percent health system vs. 73 percent PP
Emotional and Mental Fatigue: 40 percent health system vs. 30 percent PP
Heavy workload, Long hours: 36 percent health system vs. 29 percent PP

Income and career growth are also motivators for doctors across the spectrum of clinical environments. Although half of doctor respondents stated that income potential was a leading reason for choosing to work in a hospital or corporate environment⁶, The AOA Research & Information Center reports that doctors of optometry in practice ownership earn ~40.1 percent more than non-owners.¹⁰

Cost of Care

Research indicates that the cost of care is lower in private practice.⁵ Physician services delivered within health systems cost 12-26 percent+ versus independent practices,⁵ and system-based hospital services cost 31 percent+ versus independent hospitals⁵.

David Cutler, Ph.D., Otto Eckstein Professor of Applied Economics at Harvard University, Principal Investigator, National Bureaus for Economic Research, is a leading expert on the impact of consolidation in healthcare.

According to Prof. Cutler: “Big systems tend to be less vulnerable to economic downturns and can provide specialized care more difficult in smaller systems. But the hoped-for cost savings benefits of integrated health systems have not yet materialized.”⁵

A closer look at private equity, which has penetrated various healthcare verticals including optometry, reflects the same trends: A private equity price increase of 4-16 percent with a physician price increase in eyecare of 8.7 percent⁷.

In “Monetizing Medicine: Private Equity & Competition in Physician Practice Markets,” published by American Antitrust Institute, Petris Center for Public Health at UC Berkley, & Washington Center for Equitable Growth, cites many alarming trends on the impact of PE M&A.⁷

Principal investigator and lead author on the report, Richard Scheffler, Ph.D., Distinguished Professor of Health Economics and Public Policy, and Director of the Petris Center at UCB, Principal Investigator, noted “This report provides convincing evidence that incentives to put profits before patients have grown stronger with an increase in private equity ownership of physician practices. This will fundamentally change the way medicine is practiced.”⁷

Cost of care across modes of care:

Physician services delivered within health system cost 12-26 percent+ versus independent practices⁵
Private equity price increase 4-16 percent⁷
Physician price increase in eyecare 8.7 percent⁷

Quality, Experience & Preference

The Physicians Advocacy Institute commissioned the National Opinion Research Center at the University of Chicago to examine the experiences of doctors who sold to, were acquired or employed by hospital and health systems, venture capital and PE firms and payer and staffing agencies to evaluate quality, experience and preference.⁸

Over 50 percent of doctors reported changes in practice ownership reduced the quality of patient care, citing an erosion of clinical autonomy and greater focus on financial incentives.⁸

Further, approximately half of respondents reported a deterioration in relationships with their patients, due to less personalized care, more bureaucracy⁶and decreased visit time and communication.⁸

Who do patients prefer? When surveyed, 62 percent of Americans agree that it’s important to know whether a provider is part of a hospital, corporate or private equity system or private practice.⁶

Patients prefer independent practice 4:1 over corporate-owned due to stronger doctor-patient relationship and greater trust, and 57 percent agree quality of care is higher in private practice.⁴Within vision and eyecare, 77 percent prefer to be seen by an optometrist in private practice.⁸

Quality of Care, Patient Experience & Preference:

77 percent of patients prefer to be seen by an optometrist in private practice⁸
Patients prefer independent practice 4:1 over corporate-owned⁴
Stronger doctor-patient relationship, greater trust
57 percent agree quality of care is higher in private practice
Physicians report concerning trends in care delivery in hospital & health system, VC & PE firms⁸:
- ~60 percent report reduced autonomy has impacted care delivery
- 45 percent reported changes worsened relationships with patients
- 80 percent cited decreased time and communications as top negative impacts
- 45 percent report policies that influence or limit decision-making on therapies for patients

Part two of this article will look at how the many factors cited above impact patients, providers, community, and, ultimately, your practice.

References

Erich H. Mattei, MBA, is President and Chief Vision Officer of Akrinos. His mission is to make the business of eyecare approachable, accessible and profitable. In so doing, he consults with private practices across North America, provides strategic advisory to some of the biggest names and hottest start-ups in eyecare, and empowers modern ECPs as a continuing education and keynote speaker. To contact him: erich@akrinos.com

Review of Optometric Business