Ophthalmology practices can no longer rely completely on traditional methods of generating revenues for business operations. The modern day ophthalmology practice must carefully evaluate all potential sources of revenues to help offset skyrocketing overhead operating costs that afflict the business aspects of ophthalmology. Primary and tertiary ophthalmic care will always be the core business of an ophthalmic practice. However, in today’s ever-challenging economic times, responsible fiscal management must include the proper evaluation of all opportunities to introduce cash paying services that have value for patients and the practice accordingly.
According to Immersion Active, Americans aged 50+ account for half of all consumer spending but are targeted by only 10% of marketing activities. There can be very little debate that the baby boomers represent the most powerful purchasing entity in the marketplace today. Since 1946, many successful companies have realized the buying power of the baby boomer generation and have positioned their product mix and marketing strategy to take advantage of the needs of this economically influential group of people. Ophthalmology practices could not be in a better position to take advantage of the current buying habits of this ever-growing community.
It all started back in the 1950’s when forward-thinking executives began to position their companies to accommodate the demand for a powerful baby boomer target market. According to Cashing in Big on the Health and Wellness Industry, by 1955, Gerber had sold two billion jars of baby food. According to Boomer Café, as the baby boomers began to grow up, Mattel saw its sales in the toy industry grow exponentially. In 1912, toy sales in the United States were $30M per year; in the 1950s, the population grew by around 45% and sales for toys exceeded $1.25 billion. That represented an increase of approximately 4000%! Many industries quickly recognized the spending habits of the baby boomer family – the car industry responded with the introduction of the Chevrolet Corvette and the Ford Mustang, the real estate sector realized a housing boom in the 1970s and the food industry designed a new kind of “fast food” restaurant that proliferated around the country. McDonald’s, Wendy’s and Burger King became familiar community names. All of these industries became extremely profitable by simply adjusting their business principles and practices to serving the needs of the baby boomer community.
Every product or service has a life cycle – introduction, growth, maturity and decline. According to Wikipedia, “Chevrolet is now on its seventh generation of the Chevrolet Corvette.” They are beating the odds of sales declines because the company continues to strengthen its brand recognition by introducing new models in order to appeal to its current and senior target market.
It is important to remember that when you are looking at the introduction of any new service or product, you need to make sure there is a demand along with a growing customer base. It is important to always introduce new products and/or services at the beginning of the growth cycle. Not in the middle or at the end. The Recreational Vehicle Industry Association reported “more than 9 million households own an RV-the highest ever recorded. This is a 16% increase since 2001 and a 64% gain since 1980.” The baby boomers have worked very hard all of their lives and now they are downsizing and exploring new forms of travel and recreation.
Now that a very significant number of boomers are reaching retirement, the next trillion-dollar business market opportunity will be in the area of health and wellness! The boomers want to look and feel good. Quite frankly, they will take every possible measure and spend money to enhance or prolong their life. How many people do you know that will pay premium prices for organic foods? Look at the volume of health clubs that continue to have substantial growth. According to Gallup research, “it is estimated that 68% of seniors over 65 years of age take a vitamin supplement daily.”
One of the significant keys to success in your ophthalmic practice is to make sure you consider the need to diversify your business operations. In order to be a dominant player in your market for eye care services today, and in the future, it is essential that you continue to offer the latest ophthalmic technology that is targeted toward the needs of the boomers, as well as offer this group one-stop shopping options. Do you continue to have substantial growth for premium IOL services in your practice? Have you thought about offering cosmetic services, hearing services, allergy testing or providing treatments for dry eye? Have you evaluated if an aesthetics and wellness program would be a good fit for your practice? Anti-aging and gene expression research will be common terms that you will hear all throughout the next 20+ years.
Bright Focus Foundation reports that “as many as 11 million people in the United States have some form of age related macular degeneration.” As the baby boomers continue to age, it is expected that by 2050, nearly 22 million people in the United States will be afflicted by AMD. Therefore, it may make sense for your practice to offer and sell a high quality antioxidant supplement that meets your approval for bioavailability and overall quality, based upon your own independent research. This will also assist you in meeting the PQRS requirements of measure 140.
The Biophotonic Scanner is an excellent way to accurately measure antioxidants (carotenoid levels) in just 30 seconds though Raman Spectroscopy. This allows the doctor and the patient to gain very valuable insight regarding the antioxidant levels found within the body. The biophotonic scanner also provides information on the bioavailability of any supplement that is being used by the patient. This test can be seamlessly incorporated into the patient’s work-up and we have found that patients have been extremely interested, receptive and willing to pay a cash fee in order to determine their antioxidant level.
As we travel around the country, we are absolutely stunned with the lack of formal strategic planning in ophthalmology. We recommend that every practice conducts an annual planning retreat to review operations for improvement and look for significant ways to increase growth, brand awareness and leadership within the communities they serve. The good news for ophthalmology and optometry is that the customer target market is growing; the bad news is that the competition has become much more intense. All successful companies have a key leader with a vision of innovation who are always thinking out of the box for ways to improve and preserve their market share and profitability. There are many examples of successful leadership that can be found throughout the eye care industry.
Continue to “think outside the box” to enhance patient care and improve operating profits for your business. If you would like to learn more about how to add new product lines in order to diversify your practice, please contact us.