Power Hour Optometry: The Quarterly Roundup – Vision Metrics Every OD Should Know in 2025 with Dr. Jason Lake
Released on May 21, 2025
Introduction
In this insightful episode of Power Hour Optometry, host Eugene Shotsman welcomes back Dr. Jason Lake to delve deep into the essential practice metrics that every optometrist (OD) should monitor in 2025. Dr. Lake, renowned for steering practices to grow at four times the industry average, shares invaluable data-driven strategies gleaned from hundreds of top-performing clinics within his group.
Section 1: Understanding EBITDA – The Foundation of Practice Profitability
Dr. Jason Lake opens the discussion by emphasizing the critical role of EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) in assessing a practice's financial health.
"EBITDA has finally stabilized. We're seeing an average profitability of probably around 15% across our groups." [12:00]
Dr. Lake explains that EBITDA represents the residual earnings after compensating doctors and covering all operational costs. He stresses the importance of doctors viewing themselves not only as healthcare providers but also as business owners, thereby ensuring they allocate appropriate resources to both clinical services and business management.
Key Insights:
- Average EBITDA: Stabilized at around 15%, a commendable figure considering the pre-COVID levels were closer to 18-19%.
- Profitability Focus: Balancing top-line growth with bottom-line profitability is essential for sustainable business operations.
- Doctor Compensation: Understanding the dual revenue streams—patient care and business management—enhances financial stability.
Section 2: Collections Per Refraction – Maximizing Revenue from Each Patient
Eugene prompts Dr. Lake to discuss collections per refraction, a vital metric that measures the average revenue generated from each comprehensive eye exam.
"Each patient brought in more because they bought more stuff. We've seen a 15% jump during COVID, which has stabilized to around 480 to 490." [16:00]
Dr. Lake notes that pre-pandemic, the national average was closer to 300-350, positioning his group's practices well above the industry standard. However, he anticipates a modest increase in 2025 due to rising costs of frames influenced by tariffs.
Key Insights:
- Current Average: 480-490 per refraction, with national averages around 300-350.
- Trend Predictions: Expected slight uptick due to increased frame costs and ongoing economic factors.
- Impact on Revenue: Higher collections per refraction correlate with robust annual growth rates of 7-8%.
Section 3: Staff Costs – Balancing Expenditure with Efficiency
Dr. Lake addresses staff costs, a perennial concern for optometry practices. He reveals that while historical benchmarks suggested allocating 18% of revenue to staff, modern pressures have pushed this figure higher.
"Staff costs on average were in the 28, 29 range during 2020-2021, but are now stabilizing around 25%." [24:00]
Despite the stabilization, Dr. Lake argues that many practices remain understaffed, leading to burnout and decreased productivity.
Key Insights:
- Historical vs. Current Staff Costs: From 18% to nearly 28-29%, now stabilizing around 25%.
- Understaffing Issues: Higher wages have not been matched with adequate staffing, causing overworked employees and reduced operational efficiency.
- Optimal Staff Cost: Around 25-26% of revenue is ideal, though this can vary based on geographic and operational factors.
Section 4: Staff Hours Per Refraction – Gauging Productivity
This metric assesses the total staff hours dedicated to each comprehensive eye exam, reflecting the efficiency and support within the practice.
"The sweet spot is between 4 and 5 staff hours per refraction." [29:00]
Dr. Lake explains that maintaining optimal staff hours ensures that the practice can handle patient flow without overstressing the team.
Key Insights:
- Optimal Range: 4-5 staff hours per refraction.
- Productivity Balance: Ensures that staff can support doctors without compromising patient care or sales opportunities.
- Interrelation with Staff Costs: Balancing staff hours with their compensation is crucial for maintaining profitability.
Section 5: Capture Rate – The Heartbeat of Practice Success
Capture rate measures the percentage of patients who purchase eyewear following an eye exam, a metric critical to the financial viability of optometry practices.
"The average capture rate in our groups is about 60-61%, down from 64-65% pre-COVID." [38:00]
Dr. Lake identifies several factors influencing the decline, including consumer sentiment, reduced discretionary spending, and staffing challenges that hinder effective sales conversations.
Key Insights:
- Current Average: 60-61%, down from 64-65%.
- Influencing Factors: Economic pressures, staffing shortages, and less effective sales strategies.
- Strategies for Improvement:
- Templated Scheduling: Ensuring that exam schedules are optimized to include ample time for patient interactions.
- Staff Training: Equipping staff with the skills to effectively engage and convert patients during their visits.
- Product Diversity: Offering a range of eyewear options to cater to different budget levels and preferences.
Section 6: Practical Application – Enhancing Practice Metrics Through Real-World Scenarios
Eugene shares a compelling story about a practitioner with high demand but suboptimal efficiency, illustrating the importance of optimizing metrics to harness growth potential.
"If he could bump his number up to 1.5 exams per hour, he could see an extra patient per hour, significantly boosting his revenue." [55:00]
Dr. Lake dissects the scenario, highlighting the potential revenue increase from improved scheduling and staff support, ultimately demonstrating how strategic metric management can transform a practice's financial health.
Key Insights:
- Example Breakdown: Increasing exams per hour from 2 to 3 could generate an additional $40,000 annually.
- Strategic Scheduling: Allocating specific time slots for full exams versus follow-ups to maintain productivity and capture rates.
- Partner and Expansion Considerations: Ensuring that demand supports any expansion in capacity to avoid operational inefficiencies.
Conclusion
Dr. Jason Lake and Eugene Shotsman conclude the episode by reiterating the importance of consistently tracking and analyzing key practice metrics. Dr. Lake challenges listeners to prioritize understanding their EBITDA, optimize their staff costs and productivity, and enhance their capture rates to drive sustained growth.
"The key to success is that what we look at, we affect." [62:30]
Listeners are encouraged to provide feedback and suggest which metrics they’d like to explore in future episodes, ensuring that the conversation remains tailored to the community's evolving needs.
Final Thoughts
This episode of Power Hour Optometry serves as a comprehensive guide for optometrists aiming to elevate their practice through meticulous metric management. Dr. Jason Lake's expertise offers a roadmap to achieving exceptional profitability and operational excellence, making this a must-listen for any OD committed to thriving in the competitive optometric landscape of 2025.