AOS March 2012 Newsletter
Many people within the profession are asking how many practicing optometrists are needed to meet the needs of the population of the United States and whether the plethora of new "for profit" optometry schools which have opened, and those planned to open, over the last few years will produce an over supply of O.D.s. There is a significant concern that too many practicing O.D.s could negatively affect the ability of practicing O.D.s to earn a reasonable income. This is especially important for younger O.D.s who are graduating with an average debt of $150,000.00 to $200,000.00. How will they be able to pay their student loan and cost of living bills if they are unable to earn an appropriate income?
Let us evaluate some of the pertinent facts which may help us determine if there are too many schools graduating too many O.D.s.
There are currently 21 optometry schools, public and private, open in the U.S. and its territories with another proposed school in Virginia which is tentatively scheduled to enroll its first class in 2014. Four new schools have enrolled students in the last few years with some of them now graduating their first group of optometrists.
In 2012, according to the Association of Schools and Colleges of Optometry (ASCO), the 21 current schools had 2545 individuals apply for the 1797 first year spots available. If the Virginia school opens, that will add approximately 48 more students per year to the initial enrollment for a total of 1845 students per class. For the 2011- 2012 class year, there were a total of 6289 optometry students enrolled in the 20 schools operating at that time. That represented a 14.6% increase in total enrollment since the 2006-2007 class year. With the opening of the new school in Massachusetts and the proposed school in Virginia, that number will increase by approximately 112 students per class year for a total of approximately 6737 optometry students once the two newest schools enroll all four class years. In 2011, there were 1308 graduates. In a few short years, with 22 schools graduating students, that number could very easily exceed 1600 per year which is a 22% increase in graduates per year compared to 2011.
With a projected annual average of 850 O.D.s retiring by 2015, we will soon have an average net gain of 750 O.D.s coming into the marketplace every year. In 2008, there were 34,800 practicing O.D.s and, at the present rate of growth, the projection is that there will be 43,200 practicing O.D.s by 2018 which is a 24% increase in 10 years. It appears that the RAND and Abt studies were both correct in predicting an oversupply of O.D.s which began a few years ago and seems to be getting worse with the opening of each new college of optometry.
A couple of issues which have to be closely scrutinized regarding all of the schools is the level of clinical experience they will be able to provide to the students while enrolled and also whether the schools will be able to obtain the necessary skilled teaching staff. It will be especially interesting to see how the school in Virginia, which is opening in a very rural low population density area of the state, will be able to meet these critical needs.
If the schools cannot meet the didactic and clinical education requirements for their students, then we may see a situation where the NBEO pass rates begin to decline or more graduates just barely being able to pass these board exams. What effect will that have on the quality of the graduates at a time when O.D.s are taking on a greater role in the medical eye care of their patients every day? Only time will tell.
Now let us evaluate some practice income and patient load data for the average O.D.
According to the "Review of Optometry" 2012 income survey, the average net income per O.D. was ...
$121,182.00 in 2010. In 2011, the average gross income was $137,806.00. If you take into account just the Federal tax rate of 28% for that income level, that yields a net income of $99,216.00 which is an 18% decrease in net income year over year. That is for an average work week of 39.4 hours per doctor.
According to the American Optometric Association Research and Information Center, the overall average of patients, of all types, treated per week per O.D. in 2012 was 60 which means that the average O.D. saw 1.52 patients per hour. Compare that to ophthalmologists who average seeing about 150 patients per week according to "Medscape." When you also consider that most O.D.s now accept reduced examination fees for 61% of their patients, due to the prevalence of vision care plans, you can see how hard it has become for the average practitioner to maintain and increase their level of annual income.
So what do all of these facts and figures show us?
1) Considering the sophisticated examination technology available to O.D.s today, it would seem that the average O.D. is fairly inefficient. Even seeing an average of 3 patients per hour would result in greater gross and net income and reduce per patient chair time costs significantly. Increasing the number of patients seen per hour would also actually add to the over supply of O.D.s above and beyond the over supply caused by the opening of more schools.
2) Many will argue that the aging population, especially of the "baby boomer" generation, will result in a significantly increased demand for optometric services. However, if you consider that most people in that generation are now in their early 60s, the majority of them have already had to enter the eye care market, if they hadn't before, due to presbyopia and normal aging changes of their eyes. As this group gets older, there may be more chronic ocular conditions they are treated for but it will not create a very significant increase in the number of active patients seen in the average practice. A modest increase in the number of patients seen per hour per O.D. would increase the available examination visit slots per doctor per week to a level which would easily compensate for any increase in visits per year per patient due to chronic age related ocular conditions with extra exam slots left over which could accommodate any significant increase in patient numbers projected by the effects of the Affordable Care Act (Obamacare).
3) Should there be concern due to the fact that there are approximately 1.45 unique applicants per student slot in the current optometry schools? Currently, according to ASCO figures for the 2012 enrollment year, it appears that most of the schools are maintaining a reasonable level of academic standards for those students admitted. However, as more "for profit" based optometry schools are opened, there could theoretically be a significant lowering of academic admission standards in order to fill available class slots. If that happens, the concern then becomes whether the schools reduce the rigors of their programs in order to keep those students enrolled through graduation and if those students are then able to pass the NBEO exams to obtain a license to practice. This potential problem can only be resolved if the schools are able to significantly increase the total applicant pool for admissions. Considering the significant debt these students will incur and the apparent erosion of optometric income due to increased practice expenses and reduced income per patient because of the prevalence of vision care plans and now on line opticals, it may become more difficult to convince someone to apply to optometry school. It appears that some schools which were traditionally dedicated to optometry programs only may be protecting themselves financially by starting additional programs for ancillary health professions such as Salus University's audiology and physician assistant programs.
Now for the main question: Are there too many schools graduating too many optometrists which will cause harm to the profession?
The answer to that seems to be yes for several reasons.
1) Many new graduates in several areas of the country are unable to find full time work in one office and must work in 2 or 3 different offices to make a reasonable income to meet their cost of living and student debt obligations. One O.D. in the southern California area related that he could post an ad for an optometric position and have 50 applicants within two days at a per diem wage which falls significantly below the average optometric annual income reported by Review of Optometry.
2) As O.D.s are forced to increase the efficiency of their practices by seeing more patients per hour in order to maintain their income, in the face of increasing practice expenses and continued erosion of net income per patient due to various outside forces, that will further increase the over supply of O.D.s. The adage, "Work harder to make less," will definitely come into play to a greater extent than it applies even today to the average optometric practice.
3) As the over supply problem multiplies, more O.D.s will be forced to work in some sort of commercial affiliated position which could eventually lead to the profession becoming more like pharmacy where the extreme minority of pharmacists are in private pharmacies and the majority are hourly employees of chains. Unfortunately, in many of these commercial affiliated practices, the O.D. is discouraged from practicing full scope care and the production of eyeglass and contact lens prescription takes precedence.
Is there a solution to the problem of too many schools producing too many optometrists? Apparently, at this time there is not.
The American Optometric Association has not taken an official position on this issue and, apparently, neither has the Accreditation Council on Optometric Education (ACOE) which is responsible for the accrediting of the schools. Some educators have expressed the opinion that perhaps the ACOE should enhance its accreditation standards, especially in light of the increasing scope of optometric practice and the enhanced didactic and clinical training necessary to educate new practitioners to those levels, which would result in fewer optometry schools being able to meet the accreditation standards. That discussion is beyond the scope of this article.
At this time it seems that the only resolution to the problem may come about if some of the schools are not able to find qualified applicants who can finish the optometric curriculum and also pass the NBEO exams to become licensed. If the cost of education becomes too prohibitive without the ability to fairly easily earn an income commensurate with the time and money invested after graduation, that may severely limit the applicant pool more than it is currently. How long will it be before we see optometry schools sued by their graduates for misleading them about their job prospects after graduation, as we've seen happen with several law schools?
Only time will tell how this over supply of schools and optometrists will adversely affect the profession. Hopefully, some entity with the ability to effectively deal with the problem, presumably the AOA which has a great deal of input to both the ACOE and ASCO, will step in to do something before its too late. At this time, it seems that it is either unwilling or unable to step up to say and do something.
Best Regards,
American Optometric Society
801 Volvo Parkway, Suite 133
Chesapeake, VA 23320
phone (805) 768-4AOS (4267)
fax (805) 456-3005
Many people within the profession are asking how many practicing optometrists are needed to meet the needs of the population of the United States and whether the plethora of new "for profit" optometry schools which have opened, and those planned to open, over the last few years will produce an over supply of O.D.s. There is a significant concern that too many practicing O.D.s could negatively affect the ability of practicing O.D.s to earn a reasonable income. This is especially important for younger O.D.s who are graduating with an average debt of $150,000.00 to $200,000.00. How will they be able to pay their student loan and cost of living bills if they are unable to earn an appropriate income?
Let us evaluate some of the pertinent facts which may help us determine if there are too many schools graduating too many O.D.s.
There are currently 21 optometry schools, public and private, open in the U.S. and its territories with another proposed school in Virginia which is tentatively scheduled to enroll its first class in 2014. Four new schools have enrolled students in the last few years with some of them now graduating their first group of optometrists.
In 2012, according to the Association of Schools and Colleges of Optometry (ASCO), the 21 current schools had 2545 individuals apply for the 1797 first year spots available. If the Virginia school opens, that will add approximately 48 more students per year to the initial enrollment for a total of 1845 students per class. For the 2011- 2012 class year, there were a total of 6289 optometry students enrolled in the 20 schools operating at that time. That represented a 14.6% increase in total enrollment since the 2006-2007 class year. With the opening of the new school in Massachusetts and the proposed school in Virginia, that number will increase by approximately 112 students per class year for a total of approximately 6737 optometry students once the two newest schools enroll all four class years. In 2011, there were 1308 graduates. In a few short years, with 22 schools graduating students, that number could very easily exceed 1600 per year which is a 22% increase in graduates per year compared to 2011.
With a projected annual average of 850 O.D.s retiring by 2015, we will soon have an average net gain of 750 O.D.s coming into the marketplace every year. In 2008, there were 34,800 practicing O.D.s and, at the present rate of growth, the projection is that there will be 43,200 practicing O.D.s by 2018 which is a 24% increase in 10 years. It appears that the RAND and Abt studies were both correct in predicting an oversupply of O.D.s which began a few years ago and seems to be getting worse with the opening of each new college of optometry.
A couple of issues which have to be closely scrutinized regarding all of the schools is the level of clinical experience they will be able to provide to the students while enrolled and also whether the schools will be able to obtain the necessary skilled teaching staff. It will be especially interesting to see how the school in Virginia, which is opening in a very rural low population density area of the state, will be able to meet these critical needs.
If the schools cannot meet the didactic and clinical education requirements for their students, then we may see a situation where the NBEO pass rates begin to decline or more graduates just barely being able to pass these board exams. What effect will that have on the quality of the graduates at a time when O.D.s are taking on a greater role in the medical eye care of their patients every day? Only time will tell.
Now let us evaluate some practice income and patient load data for the average O.D.
According to the "Review of Optometry" 2012 income survey, the average net income per O.D. was ...
$121,182.00 in 2010. In 2011, the average gross income was $137,806.00. If you take into account just the Federal tax rate of 28% for that income level, that yields a net income of $99,216.00 which is an 18% decrease in net income year over year. That is for an average work week of 39.4 hours per doctor.
According to the American Optometric Association Research and Information Center, the overall average of patients, of all types, treated per week per O.D. in 2012 was 60 which means that the average O.D. saw 1.52 patients per hour. Compare that to ophthalmologists who average seeing about 150 patients per week according to "Medscape." When you also consider that most O.D.s now accept reduced examination fees for 61% of their patients, due to the prevalence of vision care plans, you can see how hard it has become for the average practitioner to maintain and increase their level of annual income.
So what do all of these facts and figures show us?
1) Considering the sophisticated examination technology available to O.D.s today, it would seem that the average O.D. is fairly inefficient. Even seeing an average of 3 patients per hour would result in greater gross and net income and reduce per patient chair time costs significantly. Increasing the number of patients seen per hour would also actually add to the over supply of O.D.s above and beyond the over supply caused by the opening of more schools.
2) Many will argue that the aging population, especially of the "baby boomer" generation, will result in a significantly increased demand for optometric services. However, if you consider that most people in that generation are now in their early 60s, the majority of them have already had to enter the eye care market, if they hadn't before, due to presbyopia and normal aging changes of their eyes. As this group gets older, there may be more chronic ocular conditions they are treated for but it will not create a very significant increase in the number of active patients seen in the average practice. A modest increase in the number of patients seen per hour per O.D. would increase the available examination visit slots per doctor per week to a level which would easily compensate for any increase in visits per year per patient due to chronic age related ocular conditions with extra exam slots left over which could accommodate any significant increase in patient numbers projected by the effects of the Affordable Care Act (Obamacare).
3) Should there be concern due to the fact that there are approximately 1.45 unique applicants per student slot in the current optometry schools? Currently, according to ASCO figures for the 2012 enrollment year, it appears that most of the schools are maintaining a reasonable level of academic standards for those students admitted. However, as more "for profit" based optometry schools are opened, there could theoretically be a significant lowering of academic admission standards in order to fill available class slots. If that happens, the concern then becomes whether the schools reduce the rigors of their programs in order to keep those students enrolled through graduation and if those students are then able to pass the NBEO exams to obtain a license to practice. This potential problem can only be resolved if the schools are able to significantly increase the total applicant pool for admissions. Considering the significant debt these students will incur and the apparent erosion of optometric income due to increased practice expenses and reduced income per patient because of the prevalence of vision care plans and now on line opticals, it may become more difficult to convince someone to apply to optometry school. It appears that some schools which were traditionally dedicated to optometry programs only may be protecting themselves financially by starting additional programs for ancillary health professions such as Salus University's audiology and physician assistant programs.
Now for the main question: Are there too many schools graduating too many optometrists which will cause harm to the profession?
The answer to that seems to be yes for several reasons.
1) Many new graduates in several areas of the country are unable to find full time work in one office and must work in 2 or 3 different offices to make a reasonable income to meet their cost of living and student debt obligations. One O.D. in the southern California area related that he could post an ad for an optometric position and have 50 applicants within two days at a per diem wage which falls significantly below the average optometric annual income reported by Review of Optometry.
2) As O.D.s are forced to increase the efficiency of their practices by seeing more patients per hour in order to maintain their income, in the face of increasing practice expenses and continued erosion of net income per patient due to various outside forces, that will further increase the over supply of O.D.s. The adage, "Work harder to make less," will definitely come into play to a greater extent than it applies even today to the average optometric practice.
3) As the over supply problem multiplies, more O.D.s will be forced to work in some sort of commercial affiliated position which could eventually lead to the profession becoming more like pharmacy where the extreme minority of pharmacists are in private pharmacies and the majority are hourly employees of chains. Unfortunately, in many of these commercial affiliated practices, the O.D. is discouraged from practicing full scope care and the production of eyeglass and contact lens prescription takes precedence.
Is there a solution to the problem of too many schools producing too many optometrists? Apparently, at this time there is not.
The American Optometric Association has not taken an official position on this issue and, apparently, neither has the Accreditation Council on Optometric Education (ACOE) which is responsible for the accrediting of the schools. Some educators have expressed the opinion that perhaps the ACOE should enhance its accreditation standards, especially in light of the increasing scope of optometric practice and the enhanced didactic and clinical training necessary to educate new practitioners to those levels, which would result in fewer optometry schools being able to meet the accreditation standards. That discussion is beyond the scope of this article.
At this time it seems that the only resolution to the problem may come about if some of the schools are not able to find qualified applicants who can finish the optometric curriculum and also pass the NBEO exams to become licensed. If the cost of education becomes too prohibitive without the ability to fairly easily earn an income commensurate with the time and money invested after graduation, that may severely limit the applicant pool more than it is currently. How long will it be before we see optometry schools sued by their graduates for misleading them about their job prospects after graduation, as we've seen happen with several law schools?
Only time will tell how this over supply of schools and optometrists will adversely affect the profession. Hopefully, some entity with the ability to effectively deal with the problem, presumably the AOA which has a great deal of input to both the ACOE and ASCO, will step in to do something before its too late. At this time, it seems that it is either unwilling or unable to step up to say and do something.
Best Regards,
American Optometric Society
801 Volvo Parkway, Suite 133
Chesapeake, VA 23320
phone (805) 768-4AOS (4267)
fax (805) 456-3005
