Given recent industry growth and their relatively safe credit risk, optometry practices are a solid niche for business bankers to pursue. Here’s why. There are nearly 20,000 optometry practices with about 37,000 optometrists providing vision care in the United States; together, they earn $14.7 billion in annual revenue.
As the nation’s population ages, the demand for eye care services should experience steady growth. Employment of optometrists is expected to grow 18 percent between 2016 and 2026, much faster than the average for all occupations. Overall employment by optometry practices rose 3.6 percent in January of 2018, compared to a year ago, according to the Bureau of Labor Statistics. Employment by optometry practices was up 1.7 percent in 2017 and 3.6 percent in 2016.
Therefore, the industry’s biggest challenge is a shortage of staff in the optometry industry to meet this demand.
A talent shortage
There are 23 schools of optometry in the U.S., which produce only about 1,500 to 1,700 new optometrists each year—not enough to keep pace with the growth in demand. In addition, the American Optometric Association estimates that nearly one-quarter of practicing optometrists are approaching retirement age. Optometric technicians are already in short supply, and competition for qualified staff has grown.
Brad McCorkle, founder of LocalEyeSite.com, which offers a searchable database of eye care jobs, says that this shortage of eye care professionals isn’t new. “Even a decade ago, when I first started Local Eye Site, optometrists would say that staffing was the number one challenge of running their practice, and that hasn’t changed in 10 years—it has only gotten worse,” says McCorkle.
But perhaps the biggest problem is finding optometrists who are willing to work outside of urban markets. “When we are trying to fill an optometrist position in Atlanta, we’ll get five to 10 good candidates for that opening, but if we’re trying to fill a position in a smaller town, if we get one applicant, we are really fortunate,” McCorkle observes. He also points out that of the 20 different eye care roles that they highlight on LocalEyeSite.com, 75 percent of their job posts are for optometrists.
Focused on meeting demand
In order to meet this rising demand, optometry practices are increasingly using optometric assistants to perform routine clinical tasks, which allows optometrists to see more patients per day. Optometric assistants advise patients on contact lens use and care, conduct initial tests on patients, and provide chair-side assistance to the optometrist. Employment of optometric assistants and other medical assistants is expected to grow 29 percent from 2016 to 2026, making it one of the fastest growing occupations in the nation.
Another response to rising demand for eye care services is allowing optometrists (who are primary healthcare doctors) to perform treatments previously restricted to ophthalmologists (who are specialized doctors trained in all aspects of eye care including diagnosis, management, and surgery of eye diseases and disorders).
Looking for bank solutions
So, we know that the optometry industry is growing rapidly, though they are facing challenges as a result of that growth, paired with a lack of skilled practitioners. But you as a banker can help these eye care practices succeed by providing them with solutions to some of their other day-to-day challenges, which include:
- Managing check and credit card payments from patients (Payment is usually due at time of service):
Solutions to consider: Merchant Services; Remote Deposit Capture; Online Banking/Mobile Banking
- Ensuring timely payment from managed care vision and medical plans (65 percent of patients are covered by insurance plans).
Solutions to consider: Lockbox; ACH Services with Blocks and Filters; Line of Credit
- Funding investments in equipment and facilities to compete effectively with large optical chains and Internet retailers.
Solutions to consider: Equipment Financing; Term Loans
- Efficiently paying employees (28-30 percent of revenue) and minimizing staff turnover.
Solutions to consider: Payroll Service; Workplace Banking Solutions
- Keeping supplier costs manageable (eyeglasses and contact lenses are 40 percent of revenue).
Solutions to consider: Line of Credit; Positive Pay; Account Reconciliation
- Assessing benefits of "rent vs. buy" for office space (rent averages 6-7 percent of revenue).
Solution to consider: Real Estate Loan
The “eyes” have it
There is a lot of opportunity for bankers within the fast-growing optometry niche, and you can learn even more about their challenges, opportunities, trends, and forecasts by checking out the Vertical IQ Industry Profile on Optometry Practices—it’s where we got the information in this post! Reviewing the profile, or even doing a quick five-minute review of the industry’s Call Prep Sheet, gives you valuable insights into your eye care prospect–their opportunities as well as the issues that may be keeping them up at night.
Ready to get started? Contact us today for more information or a demo!