optoblog.com

I keep hearing this type of comment: “I don’t understand you. I’ve read your blog when you were in private practice versus now. I don’t think you know what you want out of life.”

They seem to be saying that I’m a flip flopper and must be some unhappy individual who is lost. You can’t discredit me because I’ve experienced three major forms of practice. Someone who has experienced government, private, and various flavors of commercial is not a lost soul, but rather he is an experienced voice.

I implore all students and new O.D.s to listen to my words. If you would like the security of government work and don’t mind living in remote locations, then by all means be a government optometrist. If you want to be able to live in more populated areas, than choose commercial practice over private and choose Wal-Mart over all other commercial options.

In my previous posts advocating private practice and demonizing commercial, I had been drinking the private practice cool-aid that I’d been served since optometry school. Some of the disparaging remarks against commercial hold true for many brands of opticals, but not Wal-Mart.

Private practice is too risky. Sure, you know or have at least heard about successful private practice businesses, but you can’t assume that things would go well for you if you were to hang up a shingle. The money it takes now days to start cold could be better invested in Vegas. It’s a crapshoot, heavy on the crap because the frame vendors, the lens suppliers, ophthalmic equipment companies, the financing company, the advertising people, the landlords, the employees and more all get their money from you. But when do you get paid? Paying all of those people doesn’t automatically bring patients in the door. And when will you actually get enough patients to break even? That could be never, you know. You may just have to close shop when the money dries up, like I did.

Wal-Mart makes it risk free. There will always be patients coming to your door. Your success is only limited by the number of hours you are willing to work. That’s why if you want to be rich, make and sell widgets. If you want to do eyecare, work for the government or Wal-Mart, depending on where you want to live.

Anyway, just because I’m giving advice from my experience doesn’t mean I’m somehow lost or unhappy. I have family, religion, and a great job inside a Wal-Mart Vision Center. Of course I’m happy.

Here is the scenario. One doctor can own a Wal-Mart contract (or a Sam’s Club contract for that manner) for more than one location at the same time. Wal-Mart usually decides to do this if the locations are struggling with volume and/or having a hard time finding someone to fill the location.

Can the doctor physically be at two places at once or work eight days a week? No, so he hires someone. Let’s call the multi-contract owner Dr. Fingers and the two doctors who work for the contract owner we’ll call Drs. Desperate and Disgruntled. Wal-Mart needs three locations filled: Bountiful, Ghetto, and Rough Diamond.

So let’s say Dr. Fingers works Bountiful and hires Dr. Desperate at the Ghetto location and Dr. Disgruntled at Rough Diamond. The contract is similar to “I’ll pay you 70% of your gross receipts.” Dr. Desperate says fine because she just needs a job and doesn’t care about a long term commitment because she’s willing to relocate in a moments notice. Dr. Disgruntled is in a bind because he really wants to live in the city of Rough Diamond forever, but he doesn’t want to pay Dr. Fingers 30% of his gross receipts, especially when he finds out that Dr. Fingers is only paying Wal-Mart 10% or if the contract is some ridiculously low flat fee not even based on receipts.

So what happens? Usually Dr. Disgruntled will leave and try to find his next best ideal location. Dr. Fingers will probably have to funnel in and out doctors every couple years. The vision centers stagnate and never grow because the doctors who work there have no vested interest in growing the practice since they know they won’t be there long term since Dr. Fingers takes so much of their money.

I believe that it is a mistake for Wal-Mart to give any doctor a contract for more than one location just so he can suck cash from other doctors for no reason other than, “Hey, I own the contract.”

Now, I can see how some of you might say, “But what if you had a multi-doctor parnership share multiple locations equitably?” Well, you’d still have the problem of the last location not growing because the doctors rotate every day, and then which of the doctor partners would volunteer to work at the last location on its poor performing days?

It’s better for the vision centers, the doctors, and even the community to have each doctor own the contract for the vision center that they work in.

“But what about vacation days?” you say. Well, wouldn’t it be cool if each area could have it own full time fill-in person? Maybe the fill in person could always keep 100% of his receipts and not have to pay rent to subsidize the days when there isn’t an opportunity to work? I don’t know, I’m just thinking out loud here. Or you can probably find a private practice doctor who needs supplemental income to work for you. 😉

“But our store needs someone, and we can’t find anyone, so thank Heaven for Dr. Fingers,” you say. Well, that’s a short term solution that defeats you in the long run. None of your sub-contracted doctors would be motivated to grow the practice (an thus increase vision center sales) like a contracted doctor would. This scenario will just stagnate you at mediocrity. If you must hire Doctor Fingers, I think the terms should explicitly say that Wal-Mart has the option to not renew Dr. Fingers contract at the satellite location if they can find a permanent doctor when the contract expires in three years. I don’t care if Dr. Fingers is taking a “risk.” He has three years to recoup his “risk.” Take it or leave it, Fingers.

But let me restate. Multi-location contracts for a lone doctor who invariably gets greedy and pockets cash for not doing any work: BAD. Allowing a doctor to own the contract where he actually works in order to change it from slow to crazy-busy: GOOD.

I always wanted to do a podcast, but I’ve never gotten around to it because who wants to hear me ramble? I can say things more succinctly by writing them. I think a podcast is interesting when it’s a small group discussion or an interview with interesting people. I’ve never gotten around to recording either scenario, so I never published a podcast…until now.

In a previous post I linked to a YouTube snippet of the CEO of 1-800 CONTACTS, Jonathan Coon, giving a speech to Wal-Mart optometrists. Posting the entire video from the DVD would take too much bandwidth, but I managed to scrape the audio to share with you. So it’s not really my podcast, but it is a step in the right direction.

Again, if I get a legal letter from 1-800 or Wal-Mart demanding that I remove the content, I will of course comply; however, they did send this DVD to every Wal-Mart optometrist, and some of those optometrists also work in private practice settings. Also, this presentation defends 1-800 CONTACTS and Wal-Mart’s partnership better than anything I’ve heard. So, I think you will agree that every optometrist who is interested should listen to this talk (or watch it if you can borrow it from your nearest Wal-Mart Vision Center).

Enjoy. (Click the player below or download manually or subscribe to it in iTunes or subscribe to Optoblog’s site feed or podcast feed to automatically get it in your favorite podcatcher.)

It is interesting that some private practice docs can’t seem to tell the difference between Kleenex and Puffs- I mean 1-800Contacts and other retailers of soft contact lenses. This article was written in October 2006, but certain items are worth repeating in 2008:

…optometrist Wiley Curtis, of Arlington, Texas, represented the AOA’s position, tempered by his own experience. “Over the course of this year, I have tracked 18 contact lens orders placed with 1-800 Contacts,” he says. “I am saddened to report that the first 17 orders were all filled by the company without any verification contact with my office, in apparent violation of the FCLCA.”

After the hearing, 1-800 Contacts looked into this accusation. “Our records from the last 12 months to this doctor’s office show 192 phone calls, three faxes and eight total hours on the phone with his staff,” says Kevin McCallum, 1-800 Contacts’ senior vice president of marketing and operations. “We received 117 orders from this doctor’s patients. All 117 orders received a successful verification request.”

This actually happened while the congress was hearing testimony about the FCLCA. Apparent AOA stooge, Dr. Curtis, alleged that 1800Contacts broke the law, so the 1-800Contacts team stayed up all night to research, and the next day at the hearings they provided evidence to the contrary.

I only first heard about this event when I listened to Jonathan C. Coon, CEO of 1-800 CONTACTS, speak to all the Wal-Mart Optometrists on April 27th at our all-travel-and-expenses-paid meeting in Nashville, TN. He had given pretty much the same speech on a DVD sent to all Wal-Mart vision centers earlier this year after the announcement of Wal-Mart and 1-800’s alliance. Here is a significant clip. Please watch.

I wish everyone could see the entire half hour speech, but the above video clip combined with the aove AOA-is-stupid story show why optometrists blindly dislike 1-800 Contacts. I hated 1-800 blindly because that is what the organized optometrist establishment taught me to do. After learning the facts, there is no reason for any optometrist to dislike 1-800, unless that optometrist also hates all their other competitors. I don’t because I’m friends with most of the other optometrists in town and 1-800 is making my life easier now.

For these reasons, I would like to officially and publicly retract the negative comments I made about 1-800 Contacts in this previous post. It was a knee jerk response conditioned by organized optometry, for which I am ashamed.

I admire Mr. Coon and his core team for everything they’ve done to become a very successful business. I think that private practice optometrists, like the above Dr. Curtis, are just jealous. Incidentally, Mr. Coon in his speech said that after presenting the facts about Dr. Curtis’s patient orders to 1-800 Contacts, 1-800 asked him and the AOA to stop making wrongful [slanderous, defaming] accusations or privide their evidence. He has yet to bring evidence or retract his statements.

Don’t be blinded, everybody. Go to your nearest Wal-Mart Vision Center and ask to watch the 1-800 Contacts DVD.

So I found out that I didn’t have to apply with 1800’s referral network, ProNet, for my practice located inside a Wal-Mart vision center because I’m already in the system because of the alliance between 1800Contacts and Wal-Mart. You won’t believe how awesome this is. First of all, no more telephone calls. It’s all fax now. Huge time saver for the opticians who need to keep busy helping my patients get checked out so they can pay my every-day-low-price exam fee.

And then today, 1800Contacts had a customer on the phone whose prescription expired, so they called my Wal-Mart vision center, and the customer was patched through to talk to an optician. The patient scheduled an exam for Saturday. How sweet is that?!!

So when I first announced that I was going to shift the focus of this blog to be pro Wal-Mart and tell people about my experiences in this setting (which I will someday get around to), I was flooded with spiteful comments. The first thing one commenter, “John Smith,” did was to try and dig up dirt on me and report me to the Utah optometric board.

On my VisionHealth EyeCare practice website, he saw that I linked to Wal-Mart.com’s contact lens sales section. He (mistakenly) believes this to be in violation of Utah law and (if he can be believed) filed a complaint to the board.

Let me quote the allegation that “John Smith” made:

In the state of Utah, optometrists are strictly prohibited from marketing or advertising for the mercantile establishment. This includes websites.

Now, I don’t know how they do things in Virginia, Ru-I mean “John Smith,” but here in Utah we have no such rule. I could see such crazy rules coming out of communist states like California or even psychotic-optometry-rule states like Nevada, but not in a freedom-loving, gun-and-God-clinging state.

Another commenter decided to sell us on 1800optometrist, which got me to thinking that hey, I’m providing those links to Wal-Mart.com for free. Why not annoy R-I mean “John Smith” even more and potentially make some cash at the same time by linking to 1800 Contacts!?!

It was simple. I found out about it while reading at 1800’s website, registered, and voila’, I have cool links on my practice website for patients to conveniently order contacts and save money while doing it. If they buy stuff, then 1800’s ad manager sends me a check to say thanks for the referral. While I was browsing 1800contacts, I also registered for ProNet so they will send me referrals when someone’s Rx expires.

Here’s what the ads look like (and if you are by chance a non-optometrist reading this article, please click on this link the next time you need to reorder contacts):

So, if you are like “John Smith” and think that I am caught in a Link Gate scandal, then here is the website for Utah DOPL’s complaint department. But believe me that I’ve searched all the documents found online with the Utah DOPL, and John Doe’s alleged Utah rule is made up out of the same magical stuff that new grads grab onto if they want to start their own solo private practice: wishful thinking.

Those of you new grads scampering to find a job might want to check out the Wal-Mart located in Brigham City, UT. They’ve only been having fill-in doctors lately, so I’ve heard they are looking for someone permanent who could stick around and grow the practice.

Contact the Vision Center manager at the Brigham City Wal-mart, and she could put you in touch with the District manager who makes all the decisions.

The Independent Urologist has an excellent post about surviving your first 1-2 years of private practice, should you be insane enough to try. I think he makes a great point, you need much more money in working capitol than capitol equipment. That was part of my problem, I ran out of money, had to get a job 4 days a week outside the practice just to pay the bills, and that left much less time available to grow my own practice.

My financing company wouldn’t give me very much money as working capitol. They capped it as a percentage of the total loan. You’ll note that a urologist has less equipment costs than an optometrist with an optical. If I were to do it again, I would find out all the companies like Altair that give you frames on consignment. I also wouldn’t buy fancy digital phoropters and Officemate Exam Writer. I would go cheap as possible on everything- bootstrap. That’s the only way you’ll survive until the break even point.

And I wouldn’t hire a practice consultant that takes $13,000 of your borrowed money either. Practice consultants will make you think that if you build it, they will come. It’s pretty expensive flavor-aid to be drinking. You’ll get all the information you need from internet searches and free resources like the Management and Business Academy. Also, a good buying group like C&E Vision has excellent resources to help you see what numbers you should be putting up.

By the way, did you know Wal-Mart docs have the Optometric Business Academy? I hope that you didn’t really think that vendors (like Ciba, Essilor, Topcon, and Transitions) only look out for private practice docs.

Also the IU notes that while he now has a positive cash flow, he estimates that he has lost ~$200,000 in income by starting up his own practice. If you start off practicing in Wal-Mart, then you have income from the get-go. I know of doctors working for other optometrists for ~$50-60K pre tax salary for a few years with the hope of buying into the practice. Even if they are allowed to eventually buy in, what about all the income lost? They could have been making $120K+ pre tax net while working with Wal-Mart.

CooperVision’s newest lens, the Biofinity, is now available at Wal-Mart. They’re selling it for something like $49.87 (it’s a one month lens).
I guess my private practice is no longer the exclusive provider of Biofinity in the Cache Valley area.

I just was contacted by Review of Optometry. Apparently, they didn’t want any comment from me, but they were hoping that I knew the name of an optometrist in Utah that is vocal about 1-800 type stuff (apparently not me, just any other Utah O.D.). So, Utah ODs if you want to comment on the whole 1800/Wal-Mart story, let me know so that l can pass on your information to Review of Optometry.

But I thought that if by some miracle R.Opt. makes a link to my site, I’d better update more about what I’ve discussed with others about the whole partnership with 1-800 and Wal-Mart since my original post. Of course, this has been a hot topic at Wal-MartOD.com and at other sites like the highly secretive society of ODwire (which I don’t read anymore because, hey, it’s a secret).

So in my last post, you read the e-mail that I immediately sent back to Wal-Mart HQ the moment I heard about the news. The next day I went to work, and to my utter amazement, my vision center manager thought the partnership was pretty cool. Why? Apparently, Wal-Mart currently buys their contacts directly from each company, so this partnership is supposed to make the process faster for the patient. It is also supposed to help lower costs since 1-800 and Wal-Mart can combine their buying power to ask for a deeper discount from the individual contact lens manufacturers.

Then the district manager called and expressed the same opinions, but also added that Wal-Mart would save money by transferring the expensive maintaining of walmart.com’s online contact lens sales to 1-800’s website. She also said that 1800 has a huge brand recognition. If you walk-up to someone on the street and ask them where one could go to buy contacts, something like 40% will say 1-800-Contacts.

So this tells me that Wal-Mart is using 1-800 as their sort of high recognition buying group. In my practice, I order most lenses through a buying group like Lensco, but then some lenses I just purchase through the manufacturer, and hard lenses I get through Valley Contax ( I know Lensco does hard lenses also, but Valley has the I-Kone and my alumni’s C.A.D. design.)

So is it a sin for Wal-Mart to get itself a buying group? Of course not, unless that buying group happens to belong to the Spawn of Satan. Okay, all kidding aside, I wrote the following follow-up e-mail to Dr. Patel:

…I would gladly be willing to recant anything I’ve said about 1800 CONTACTS if they would join the Vision Council of America, prominently display the “Check Yearly. See Clearly.” logo (checkyearly.com), erase from their site any directions for consumers to subvert doctor recommended expiration dates, and withdraw their lobbying efforts for government mandates on 2-year expiration dates.

You should include that as part of your bargain with them.

So, just because 1800 sells contacts online doesn’t make them my enemy. It’s their coaching of consumers to badger doctors about prescription expiration dates and worse, their lobbying for laws to mandate to doctors a minimum 2-year expiration date (which succeeded into become a Utah state law).