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Living on the Edge-er
By Steven Faith, OD, FAAO, Livermore Optometry Group, Livermore, CA
Office finishing. Do we? Don’t we? Why? Does it make economic sense or just economic cents?
Our office has had edging and finishing capabilities in-house for over 20 years. We have done everything from only private jobs to being a certified VSP lab and completing everything on site. Through the years we have learned a considerable amount about the obvious and not so obvious benefits and downsides to in-house finishing.
First, the obvious benefits.
The main benefit is that we have complete control over the production process of all of our jobs, or at least those we want to control. Our turnaround time is usually less than it would be outsourcing our jobs to a contract lab. That could be anywhere from 2 to 5 days less time. And now, with the technology of finishing equipment, the technical aspects of completing a perfectly edged and finished lens is more achievable than ever before.
Be careful, however, the turnaround could be longer in some instances if there are complications with the job from anything like lens breakage, base curve incompatibilities, unique edging issues, or incorrect tinting. In those instances, the turnaround is potentially longer since you would have to reorder the lens uncuts again and return the damaged lenses to the wholesale lab to obtain new ones.
The economics definitely pencil out on all of the private jobs we complete. The economic margins, including cost of goods on uncuts, labor costs, equipment costs, floor space overhead for the equipment and lab trays, are more than adequate to cover our costs and generate a very positive cash flow with our own lab. This is absolutely not true with most insurance jobs, which will be discussed below.
The not so obvious benefits.
It is much easier and with more predictable results on jobs for patients who have a frame they want to reuse. We all have those patients who want to use their frame no matter what their current insurance benefits are or their present eligible discounts may be. With our own edging equipment it is more accurate and less frustrating to edge their job in-house than even using the best lens tracer connected to our contract lab. And even if we use our tracer, we often need to fine tune the job on our own after receiving the traced job from our contract lab to make a more secure lens fit.
The intangible benefit of patients enjoying and appreciating the professional nature of our office knowing we have a complete on-site finishing lab is, quite honestly, hard to measure. They know we can get their product to them faster and with complete control, and are not at the whim of a “lab” that they know has always existed with other offices and usually gets blamed for the delay in their prior jobs.
“No, Mrs. Jones, we don’t need to send out your glasses to be completed, we can do it right here. How is next Tuesday to pick them up? You’ll receive a text when they are ready.” There is a confidence and comfort on the patient’s behalf with the above scenario.
The downside – mostly insurance economics.
As stated previously, the economics of private jobs for us is a no brainer. Insurance work, however, not so much. Particularly with VSP IOF and their uncuts program, the margins are simply not there and we lose money on every single job we do. And that doesn’t include the future potential warranty that might come into play if the patient needs the job replaced in our designated “warranty period.”
When we do an IOF VSP job or uncut VSP job in house for a VSP Signature patient it costs us anywhere from $10 to $20 in labor costs to complete one of these jobs when you consider all the overhead costs of completing a job. Since we are now “the lab,” from the time our opticians hit the “send” button on one side of our clinic to the opposite side where our lab optician sits, a few things occur that don’t if we send out the job:
- Our lab optician now has to create a lab order in our computer for tracking in house.
- They have to “tray up” the job with the appropriate materials and paperwork so they can order and monitor the process.
- The lab trays have to be stored somewhere on site throughout the whole process
- They now have to track the frame from the drop shipped company to our “lab.” The optician on the other side of the building wants to know the status of their patient’s order, just like with any lab.
- When the lenses arrive (usually next day to a couple of days) they need to unpack the box of multiple lens blanks and orders from the uncut wholesaler and get the appropriate lenses to the appropriate trays.
- Ditto for the frames.
- The actual blocking and edging for most jobs is simple and takes between 10-20 minutes to complete per job.
- Don’t forget that Trivex material really stinks, literally, when cutting. You need to make sure that you have a good vent or the whole office will know when your lab is cutting Trivex and some other materials.
- And then there is removing the completed job from our lab system and “sending” it back to our office. (This is obviously a simple step.)
This all sounds like why would you consider finishing an insurance job? See the above benefits section. And we consider the costs associated with the few Signature jobs we do now as a cost of doing business and even marketing expenses in keeping and solidifying that patient relationship with our office.
So what do you do?
- Get an edger and the associated support equipment from any of the great manufacturers on the market (we have had Santinelli for 20 years with no problems).
- Have an optician trained in all aspects of edging and finishing (it takes 6 months to get them totally comfortable with the process).
- Do all of your private jobs within reason (you will want to send out drill mounts, strange BC’s, unique frame grooves, etc.).
- Get a competitive source for uncuts.
- Figure your overhead costs including your space allocation, labor and materials (the edging companies can help you with this).
- And get a good ventilation system for the funky-smelling materials your lab will cut.
And remember, we will never get rid of our in-house lab even with the economic concerns stated above. The benefits to our patients, staff and doctors far outweigh the economic nickel and dimes stated above.