The economy is officially in recession, unemployment and home foreclosures have reached all-time highs, and the stock market is at its worst since the Great Depression.
But this gloomy economic picture didnt stop Paula Koch, O.D., from opening her new practice, Cherry Optometry PC, in
After 18 years of employment, Dr. Koch, a
Several things have worked to her advantage: Although larger banks had stopped lending money, a small community bank in
Dr. Koch did scale down some plans, opting to start with a small staff, to choose more economical frames vs. high-end lines, and to invest conservatively in instrumentation and build-out. Shes also saying a few extra prayers, keeping fingers crossed hoping for the best for this areas future and for the economy to turn around.
She credits her colleagues optimism for her decision. Most of my colleagues were still pretty positive about going into practice, so that did help, she says.
Richard C. Edlow, O.D., is one such optimist. Its difficult and its a challenge, but if someone has the business aptitude and wherewithal to open a private practice, over the long term, theyre going to do just fine, I believe.
Dr. Edlow has reason to be optimistic. Our patient volume is up. Our revenue is upnot as much as the patient volume though, so there is a little bit of decrease in spending. But, were still ahead of a year ago, he says of Katzen Eye Care, the Baltimore and Lutherville, Md., group practice of which he is chief operating officer.
Others, too, remain optimistic. Among 68 O.D.s who responded to a Live Poll at Review of Optometry Online, 22% said the recent economic crisis has not affected their practices at all, and 49% said it only affected their practices slightly.
Even so, 25% of those who responded to our Live Poll said the economy affected their practices badly but not permanently, and 4% said it affected their practices very severely.
Gary R. Bell, O.D., whose practice is in
The economy has been trending down all year, but my practice revenues were slightly ahead of 2007 until September came, he says. We had a sudden and dramatic 25% drop in gross in September and October.
Dr. Bell believes that patients are putting off eye exams and spending less when they do come in. There also have been anecdotal reports of patients stretching out contact lens wearing times.
This is part of an overall pattern of reduced health-care spending. For example, in a national survey conducted by the National Association of Insurance Commissioners, 22% of the 686 consumers who responded said they have reduced the number of times they see a doctor as a result of the economy. And, 11% said they are cutting back on prescription drugs.
Some of it is regional, Dr. Edlow adds. If youre still in
Dr. Bell has also suffered other losses. My cash flow is reduced and my retirement funds have been clobbered, he says.
Dr. Edlow, too, has suffered heavy losses in retirement funds. And, theyre not alone. In October, the Congressional Budget Office said that Americans lost as much as $2 trillion in retirement savings in the previous 15 months.
Drs. Bell and Edlow both plan to delay retirement until they have recouped some of their losses. When you look at the docs who are in their 50s or 60s, what I believe is that were very fortunate in that we still have our day-to-day and year-to-year income, says Dr. Edlow, age 54. But whats changed is that our retirement money is gone. So for me personally, Im still living the same life I was living before, but instead of retirement being eight years away, its now 15 years away.
A Brighter Future
Concerns about the economy do not appear to have discouraged would-be optometrists. For example, the applicant pool for Nova Southeastern University College of Optometry is up 6.2% from a year earlier, says Michael Bacigalupi, O.D., M.S., assistant dean for student affairs.
People are still looking for those jobs that provide stability. Optometry is one of them, he says.
Indeed, U.S. News and World Report, in its Best Careers 2008, listed optometry as one of the recession-resistant careers and best careers based on a changing job landscape. As of October, the health-care industry in general continued to expand, while other sectors of the economy cut jobs.
Also, as the baby boomers age, there will be an increased demand for eye care services. If someones thinking about [opening a practice], this is a great time to do it, because its going to just get busier and busier, Dr. Edlow says.
But that may be easier said than done. Student debtan average of $152,410 among Novas graduating class of 2008limits the decision to open or buy into a practice, he believes. Even those young O.D.s willing to take on more debt may find such opportunities limited by doctors who must now delay their own retirement.
The good news, however, is that students continue to receive job offers. I havent yet had a student who came to me and said, I cant find an opportunity, Dr. Bacigalupi says. I review a lot of contracts for students. Students are getting very solid offers, very solid opportunities.
So, perhaps they can afford to be optimistic despite an otherwise pessimistic economic environment.