Given the challenges in our country, like COVID, and the current state of Canadian optometry, Canada still has a solid market from a business perspective. As a profession, Canadian optometry still has a high demand for doctors to grow because of the elements which play a massive role in the industry. In the fifth installment of The Future of Canadian Optometry Series presented by Aequus Pharma, Dr. Sian speaks with Mr. Alfonso Cerullo about his perspectives on the profession's future. Mr. Cerullo shares his thoughts on the following topics: independent vs. corporate optometry, what increasing access to care means, the value of the eye exam, and emerging technology. Tune in to this episode and be sure to check out the entire series of interviews with leaders from various large organizations in the Canadian optometry space.
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Mr. Alfonso Cerullo, President Of LensCrafters - The Future Of Canadian Optometry
This is the fifth of six installments or the fifth of six interviews that I'm doing with leaders from various organizations across Canada that have footprints within the Canadian optometric market and in the industry. Generally speaking, they are large players in the industry. We are talking FYIdoctors, Specsavers, IRIS, and LensCrafters, which is going to be our interview.
If you haven't heard the previous four interviews, I highly encourage you go check out Dr. Alan Ulsifer from FYIdoctors, Dr. Daryan Angle from IRIS, and Mr. Bill Moir from Specsavers. All of these interviews have been valuable and truly insightful into what the future of Canadian optometry is going to look like from the perspective of these different leaders in different organizations.
What I have said along the way is that some of these guests have been very candid and very open. They have been open to discussion, open to face these questions head-on, and open to answering the question that I'm asking. Some guests are not so open. It has been interesting to hear your feedback as these episodes have been rolling out and to hear feedback from people who are listening and from my colleagues who tell me, “This person was open. This person was not so open.”
I appreciate that feedback. I appreciate you sharing. As I always make the request, please do share this with our colleagues across the country, whether you post it on Instagram, or post a link on LinkedIn or Facebook. Send a text with the link to your friends so they can tune in, whether they are watching on Facebook, YouTube, Spotify, Apple, Stitcher, or wherever platform because all of these conversations are valuable.
What I would love for everyone to take away from this is that we all need to be collaboratively, as optometrist and as colleagues, pushing in the right direction. Pulling in the right direction or however you want to look at it, and making sure that the public has the highest possible perception of our profession and what we do in the service we provide.
The fifth of the six episodes is with Mr. Alfonso Cerullo who is the President of LensCrafters and For Eyes. LensCrafters is one of the biggest retail met brands in North America and the biggest one under the EssilorLuxottica banner. Having Mr. Alfonso Cerullo on was very interesting and sharing some valuable insights. One, I'm going to tell you right off the top. I love that Alfonso shared that optometrists have the power. We have the power to decide which direction our profession is going, and which corporation we want to work with, whether we want to work independently. Ultimately, we have the power
If we make a decision to work with a certain organization that may not be driving the profession in the right direction, that's on us. If we make the decision to work in a certain direction to make sure the perception of our profession is always elevated, that's on us. That's our responsibility. Without giving away too much from this interview, here is the conversation with Mr. Alfonso Cerullo. I hope you enjoy it.
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Mr. Alfonso Cerullo, thank you so much for taking the time to join me here on the show, in particular for this very special set of conversations that we are having that I have called The Future of Canadian Optometry. Thank you very much for joining me here.
Thank you, Dr. Harbir, for the opportunity. Thank you so much.
My pleasure. Alfonso, you probably know this now. A few months back, I put an invitation on the show to invite leaders like yourself and from other organizations to come on to share their thoughts about what's going on in our profession right now. I ask every guest at the beginning of each interview that I would love it if you could be as candid and open as possible to share your thoughts on what you think is going on these days. I start every guest with the same question. From your perspective as president of LensCrafters and For Eyes, what do you think is the current state of optometry in Canada now?
I have to say that from a business perspective, Canada is a very strong market for us. Looking back to the last months, this 2022, then also starting from the middle of 2021, we are doing very well. It's a very solid and strong market. We are very happy to be there. We are also experiencing some trends that start a little bit early here in North America. Many related to the doctor and supply. There is a strong need for doctors, and if we don't handle this carefully, it could be a potential challenge for the Canadian market.
LensCrafters: There is a strong need for doctors, and potentially if we don't handle this carefully, it could be a potential challenge for the Canadian market.
For optometry as a profession, from what you've seen in Canada, particularly, and from the service provider's or optometrist's perspective, do you think that the profession is strong? Is it growing or is it doing well? Do you see some pitfalls or challenges right now?
There are several types of challenges. We cannot forget COVID. COVID-19 starting in 2020 has been a strong element of disruption for all of us and any professional in this market. Including the ODs. All of us out there are trying to rethink how to do the things that we used to do in a different way. Technology played a strong role during COVID. As a result, people change their mindset personally and also the ODs. The work-life balance became even more a very important element in the life of people and the life of doctors.
This generates some change in some disruption in the industry. On top of those that I just mentioned, let me say there’s a lack of supply. We need more doctors. We know that there are more practices that are growing. There are new players coming into the market. The demand for doctors is going to grow. Let me say together with these different needs that the people have over work-life balance, this can generate some disruption. As I said before, technology can come in our favor like tele-optometry and remote care. This could be an element that can mitigate these potential needs.
That's something we are going to touch on in a little bit. You use the term disruption there a couple of times. That is going to be my next question. It is related to disruption and the various disruptive forces. COVID was maybe the biggest global disruptive force that we have faced together. Here in Canada, what other forces would you say are potentially disruptive? We hear a lot about consolidation, new players, and eCommerce. Which of those do you feel is maybe playing a bigger role? What do you think optometrists should be looking for?
All of the things that you mentioned are already there. All of the things that we know in the market. There are new players that are coming out there that have their own strategies. eCommerce is playing a big role. Considering how important is eye care or vision care, one of the most important elements that we should look at very carefully is the availability of doctors or the number of doctors that we have in the market. LensCrafters operates in US and Canada, but looking overall at North America, we know that on average, there are 1,700 new grads joining the community. It’s a little bit less or a little bit more every year. They are joining the family.
When you look at the number of doctors every year who retire, they are almost in the same range. You have 1,600 or 1,700. In terms of head counts, and the number of people or doctors that are available to serve the community, we are almost there, but then there is a material element in terms of work-life balance that is reducing the availability and the access to the care to the entire market and community. Together with the fact that there are more doors. Yes, there are new players coming, but there are also private entities in corporate businesses that want to open new practices in the market.
On one hand, this is something very good for us because it means that this industry is very healthy. There are new operators that want to come. What is important is to make sure that we are continually giving access to care, which is the final goal of all of us. We are continuously giving high-quality vision care to patients.
What is important is to ensure that we are continually giving access to care and high-quality vision care to the final patient.
We need to make sure that we make it appealing to new people or young potential doctors in this profession, the doctors and the ODs. We need to work with schools and make sure that the school of optometry are very visible and there are more doctors that are joining them. We are supporting ASCO in all ways possible. One of their last campaigns is Optometry Gives Me Life.
We have been a leading supporter of this campaign to make sure that new generations see optometry as a very solid and strong profession from a business and professional standpoint. They can be very instrumental in serving the community, for access to care, and giving the gift of sight to the people. I strongly believe that as long as we have enough doctors and the doctor community is strong out there, all the other elements that can be disruptive are mitigated. That's what I think.
There has been a lot of talk about this during the series of conversations that I have had. There’s a fair amount of talk about the demand or the potential lack of supply of optometrists. You touched on a couple of things that make the profession seem desirable and attractive to potential candidates and students who may be going into that path. That's one of the questions I will probably be asking you again towards the end of the interview. Do you feel that having more schools is part of the answer?
I don't know if it is a matter of the capacity of schools and if we need more schools. There are some states at least in the US where there are areas that are not covered by schools. This can facilitate access to the schools and make sure that the people choose to go and choose an optometry school that they want to go to. What we need to do even more than most schools is to create a strong awareness of this profession. Making sure that when the students out of high school have to decide, they know that there is a strong profession out there that the market needs. There is a stronger demand. It’s a good moment to join this industry.
These are the things that we need to make sure from everywhere, and that these new potential doctors are knowledgeable and they know. They have this awareness that the doctor, the ODs, and the optometrist are out there. It’s something that can be good for them. I guess that now, optometry doesn't have the same level of awareness of the people that should choose a school that another type of profession has.
As part of that conversation of there being not enough doctors, some have suggested through these conversations that there should be more schools. There should be more acceptance of students, and therefore greater output of ODs on the other side of it. I will say within the OD community, there's some concern that if that's the case, then it lowers the bar to entry and therefore lowers potentially the quality of the professional that's being out there and being put out there. It then devalues almost the profession in a way, if there's now potentially an oversupply of ODs at some point. Do you feel that that's a legitimate concern? Is that something that may happen?
I have had several opportunities to talk with the schools. The schools of optometry will never allow that. They will never ever lower the bar down to let more people get in. It's something that I don't think is going to happen. All the schools that I had the opportunity to speak to always made this point. It's more a matter of having more people trying to start this school, trying to start this profession, and trying to become optometrists, rather than saying, "Considering that we don't have much, let's lower the bar down.” I don't think that this is something that is going to happen. It’s a risk. I don't think it's happening, and I hope that it is not going to happen.
The schools of OME will never allow lowering the bar down to let more people get in.
The core question that I post when I put that initial invitation to the various organizations in our industry was, what is your organization doing to support the profession of optometry as a whole to help the profession in Canada to grow and thrive in the future? I would like to know from your perspective and as president of LensCrafters or if you are willing to speak beyond that to EssilorLuxottica as a whole, what would you say is the organization doing to support optometry?
A quick introduction. We know that LensCrafters is part of the EssilorLuxottica group. EssilorLuxottica is a new company that is coming from the integration of Essilor and Luxottica. It's the bigger player on a global scale in this industry, and LensCrafters is the optical retail chain here in North America. It’s the corporate retail chain.
We are part of a vertically integrated business. All we do is all about spectacle and eye care instruments. We round the industry. We’re trying to be an open player to elevate the industry. Even because of the position that we have as the leader of the industry, we strive to let this industry grow. Only if the industry grows that we can grow in terms of business.
Looking at LensCrafters, it's our biggest optical retail chain in North America. We have overall 1,000 stores split between the United States, Canada and Puerto Rico. All we do is make sure that we provide high-quality eye care and eyewear. That's what we do. If you look at our brand value proposition, we want to set the standard in the industry to make sure that every patient every day in every store can have these high-quality eye care and eyewear.
Also, we always say, and this is something public that we are always sharing in the market, we want to be the trusted optical retailer in the community. Trust is something very important for us. You build trust. Thanks to the many things that you have to do as an optical retailer. Good stores, equipment, product and environment, but mainly good doctors. When you look at the community and you want to be a trusted optical retailer, the doctor is essentially one of the main characters of what we are doing.
LensCrafters: So when you look at the community and want to be a trusted optical retailer, the doctor is essentially one of our main characters.
We work around you to make sure that the doctor is very visible in the community. He can showcase the high-quality service that we can provide. The question is, what do we do? First of all, we are always committed to making sure that we are always a cutting-edge store. Our remodeling and relocation of new stores is something that is part of our strategy. It’s a constant element. We are talking huge investment in terms of CapEx, and this is one of the elements. The doctors that want to join us can see that they are joining a company that is looking at the store as a key element of the community, and put them in a position to showcase a high-quality journey. That’s the first one.
The second one. When a doctor joins us, in both cases, if it is an employee where it is allowed by law or if it's a sublease, a doctor that is joining but is a completely independent doctor, at which we are subleasing part of our stores. In both cases, we make sure that we always have up-to-date equipment for this doctor. We make sure that all the best technology that is out there in the market is present in this practice at a very convenient price.
This equipment can be very expensive. You can have an optomap. You can have the Drum, this digital refraction equipment and all this stuff. Setting up the practice can be a challenge mainly for new graduates because they are also paying for their schools. By joining LensCrafters, they can have all this technology in a very beautiful store with a very good deposition in the community, and at a very affordable price. Everything is included in the lease.
It's important to say that you will never feel alone in LensCrafters because this doctor is going to join a huge community. We are more than 800 sublease doctors and more than 2,300 employees. The community is very big. When I say 800, it is the sublease holder. In each practice or the sublease holder, there are other doctors. You can multiply the 800 by 2. We are talking about thousands of doctors that are part of this community. They will receive newsletters. We have a moment that we come along together and so on and so forth.
Also, we are a leading player in all the major industry events. Many of them are in the United States, but I also know that the majority of doctors that I know from Canada used to join it when they were talking about AOA, the Academy, Vision Expos, and East and West. Everyone is coming there to understand where the industry is going. In all of these, there's always a leading player. It's a solid company that invests money to make sure that we are providing high-quality eye care. You can join a huge community of doctors, so you can be up to date and be part of it, and you can have a leading position in all major industry event
In the terms of making sure the profession continues to grow. You've described there a setting for an optometrist to grow and pursue their career, and be part of a community. It's nice from that individual optometrist's perspective. We are looking across the entire country, for example, with various challenges that are happening such as in Ontario with their negotiations with the government there and things like that. How would you say LensCrafters is elevating the profession or strengthening the profession of optometry in those types of situations?
The example that I always used to share is the following. Now, if you want to be an independent doctor and you are a new grad, it is not going to be easy. You have a lease. You need to build the practice so you have CapEx investments. You need to keep your practice up to date, always beautiful, and showcase who you are. You need to maintain this practice. You need to have personnel and people working for you. It depends if you just want to be a doctor at just an eye care practice, or you’re also selling spectacle products out there. That situation is even more complicated. You need to manage a back office. It's not just about people, but you need to have also technology and instruments to manage the back office.
You need to have a website. You need to invest in marketing to be visible in the community. You need to have an HR and a system to let you manage the practice. You need to have an appointment booking management tool to make sure that you can handle your booking in a good way or in a seamless way. All these things are all challenges that when you are a doctor managing your practice by yourself can be a headache instead of joining a big optical retailer or a big organization like LensCrafters where you can have a lot of these things with a very affordable sublease contract.
You are already joining a company that has a strong guide within the community. You have a company that is already giving you a practice that is remodeled and fresh with equipment and everything. You already have a system and back office. Now, if you have any kind of equipment or instruments that is not working, it’s independent. It’s on the practice to make sure that this is working.
We have all back office, contact centers, and eye care operation teams that are making sure our doctor community can be always up and running in a good way. Nobody is perfect. You can have areas for improvement, but in terms of the operative model, we always try to serve our doctors in the best way possible, and the service level is pretty good.
LensCrafters: You can always have areas for improvement, but in terms of the operative model, we always try to serve our doctor to come in the best way possible.
You touched on the word corporate or corporation. That is the next question I was going to ask you. From when I was in school, and I know it’s from higher years as well, but the conversation starts to happen while you are in optometry school. It’s this division between independent and corporate optometry. I would like to hear your thoughts on what you think and if you could define each of those, and then where does the LensCrafters model fall in that?
What I’m going to say is pretty straightforward. It could be strong. This definition is one of the most confusing definitions in the industry. When I joined this industry, I'm a managerial engineer. I'm an engineer and I spend most of my life in consulting. During my professional life, I joined Luxottica, and then I start looking after this optical retail business, first in Australia and then here.
At a later age, I got in contact with this definition, and it's confusing because you have corporate and independent. Normally, what we mean by this is corporate are all the big operators of the optical retail chain. That's the overall definition that the majority of the people land on. We have the independent that is the single doctor with his own practice and so on and so forth.
It's a way to define something. If this is the definition, it's pretty clear. Where I focus on is what we want to mean with the corporate retail chain and independent. If all of us have the interest to define what type of eye care service we are providing to the community, so then it is worth understanding and clarifying.
For me, the important thing in any definition that we use is to make sure that the doctor is independent in the sense that he can manage and execute his profession in the best way possible without any condition. That's the way because you need to provide an eye care service to the community, and this should not be influenced by anything else. You should be independent.
Make sure the doctor is independent because he can manage and execute the profession in the best way possible without any conditions.
If instead you are employed in an organization, you should make sure that you are this independent. You are executing your job in a way that you are still providing this service to the community. In LensCrafters, to keep our life easy, we have both of them. The majority, more than 800 stores have this sublease model. What does this mean? For me, it’s one of the best ones because you have an independent sublease doctor that is operating in his own practice as an independent. He is not influenced at all by any sales coming from the product and material because he's not sharing any profit from the product and material. He's just operating next to LensCrafters.
It’s all the things that I told you before. He made his own decision and say, “I want to join LensCrafters. It's a strong brand. I can have traffic over there. They invest in marketing for me. They give me all these eyecare operation tools that I can operate in my practice. It's good to go there,” but he's independent. He’s got nothing to do with us. This is the model that we have in Canada.
In the United States, we have the majority of subleases but we have also employed doctors. When it comes to employed doctors in the United States, we strive for continuous employment, with continuous learning, with the processes and procedures to make sure that whatever is happening on the other side of the business, the doctor follows on the eye care. There is no difference in terms of equipment. The equipment is the same.
There is no difference in terms of the time that we dedicate to the patient in employed stores or in sublease stores. All the metrics and KPIs, when you look at it, are very much comparable. We are obsessed to make sure that these KPIs on both channels are very aligned because what we want is to provide high-quality eye care. Personally, the sublease model can remove any doubt because you are providing the best eye care backed by strong operators that can provide the best eyewear.
LensCrafters: The LES model can remove any doubt because you are just providing the best eyecare begged by a strong operator. So that can provide the best.
The definition is implying something, especially the way that it was always presented to us in school, and the implication is that corporate optometry is the less desirable route. The evil corporations will set you up that way, and the understanding or implication is that they are determining how you practice. They are determining how many patients you see. I know in some organizations, from what I understand anyways, that is the case. How many patients do you see? How much time do you spend on each patient? I would like to know your thoughts on that. Is that something that is generally the LensCrafters' perception of that?
I have to be very honest. I spoke with our independent doctors and then we look at our business as LensCrafters. There are two answers to your question. The first one is the availability of the doctor and the access to care. If you ask me, considering how important is access to the care, everybody, independent, corporate, hybrid model like LensCrafters, we have sublease and we’re corporate. Everybody should strive to increase access to care. If there is someone in the community that need an exam, he should be in the position and in the condition to have an exam.
Seven days, that's the goal where I try to strive to give access to care to the community as much as possible. Every day over the week. How we can achieve this is a little bit different because if you want to provide high-quality eye care, you cannot have a doctor seven days a week, ten hours a day. That's unfair. That's not good. This doctor is tired. He is not in the best position to provide a high-quality service. You need to organize your practice in a way that you can maximize access to care and make sure that you can guarantee your people a good work-life balance to keep them fresh and relaxed to provide the best service. One is access to care.
LensCrafters: Organize your practice in a way that you can maximize access to care and make sure that you can guarantee your people a good work-life balance and keep them fresh and relaxed to provide the best service.
The other one is productivity and the way you want to execute your practice. I think that we are pretty much aligned. There are practices that used to see 10 to 12 people on peak days, and there are practices that on average used to see from 5 to 8. At the end of the day, if you have a doctor in the room managing twelve exams throughout the day is a fair amount of exams to provide a good quality eye exam, and also manage the productivity to keep financial stability for independent practice. Between 12 and 15 is something that is very fair to manage.
You mentioned that you had spent some time in Australia.
I have been there from 2017 until 2020.
The big elephant in the room these days in Canada is Specsavers, and the splash they have made in the last several months or whatever it is since they have made their entrance here in BC. It wasn't directly because of Specsavers, but a lot of the impetus for this conversation and these conversations that we are having is due to the second order, third order effects that have happened.
Other somewhat organizations are recruiting harder ODs and staff, poaching ODs from other places, and things that are happening in response to these waves that are being made. A lot of ODs, all of us essentially, across the country are a little bit on edge like, what is this going to mean for the profession? What is it going to look like 10 years from now?
We try to look to other markets where changes like this have happened and where Specsavers has come in. They originated in the UK, but Australia was the market where we know that they made a big impression if we want to use a diplomatic word. I would like to hear your thoughts as much as you are comfortable sharing. From your time in Australia, wow do you know or what do you understand of the market changing in the period of time after Specsavers entered?
In Australia, I was looking after the OPSM chain. In Australia you have OPSM and you have two historical optical retail chains in this market. When Specsavers came into the market, I was not there. I came later on. What I have been told is that they made the promise to the market, “We’ll open 100 stores in 100 days." This was the call to action that they open in this campaign and this journey in Australia, and they made it.
They did a great job. They went there and they opened a practice. They respected exactly the timeline of what they did. About how they operate, I cannot comment. I cannot say anything. Everybody out there is trying to do their best or what they can. Any kind of effect that you may have from the coming of an operator like Specsavers into the market, this effect is completely in the hand of the doctor. The doctors have 100% the power to make this phenomenon a big disruption or nothing. Specsavers, like all of us, need doctors. The only way that they can be successful is if the doctor is going that way.
It's a little bit interesting the dynamic because you see doctors that are very scared about this. I don’t know if they would be successful like Australia, but in case they will be, that scenario would be exactly the doctor that will allow this. Isn’t it interesting, this stuff? The only thing that I can say is that the doctor has the power. They should understand exactly what they are going to do, and then make their choice. You cannot eat the cake and have it.
That's a fair point. The optometrists are demanding. We want the cake and we want to eat it too. That's the way we work. We have talked about the importance of the eye exam. One of the questions that I'm asking everybody is how do we create the perception of value through the eye exam service? How do we leave a patient feeling that the eye exam was worth the amount of money that they paid, hopefully, beyond or exceeding the amount of money that they paid? In your opinion, what have you seen on that side of the business in the eye exam? From the eye doctor's perspective, how do we create that value?
There are two key elements on this point. The first one, which is your first point, is perception. This is based on the awareness that the people have about the site and about eye care. In a world where the industry becomes a commodity, there are many operators that go in that direction. It's about price. It was about cheap. It's about the spectacle on the face of people because, with the price that they have, they cannot afford all the extra costs to provide high-quality eye care. The more we go into a world where the industry becomes a commodity, the more the customers don't see the worth of an eye exam.
LensCrafters: The more we go in a world where the industry becomes a commodity, the more we play and communicate as much as possible in the industry as a word of mind instead.
Instead, the more we play together and communicate as much as possible in the industry through word of mouth when a customer or a patient is in the doctor's room, or any magazine of the industry. How important is it to take care of your eyes? How much can you discover about your health testing and have an eye test? I don't remember, but it’s probably something like 80 or 90 different types of disease. You are a doctor, you know better than me, but how many can be discovered by just inspecting the eye? You can save lives by having an eye exam.
The more we are able to let the patient in their interest know that they should have annual exams. They know that it's important to have an annual exam for their safety and for their health, and they take care of their eyes like they take care of their teeth. You go to the dentist probably every month, every eight weeks, or every three months. There are many people that don't visit an optometrist every year. This is something that all of us need.
If we do a good job in letting everybody understand how important it is to do annual eye exams and how important it is to inspect your eye, not only for the good side, it is the main things, but for many other things, the more the customer has the attitude to approach the eye exams and strive and look for a high-quality exam. He’s also willing, if he has to pay, to pay more because he understands the value.
I have been in practice where the customer has been moving across pre-test and test, across 6, 7 and 8 different equipment without telling him anything. He doesn't see any value. We spend time in LensCrafters explaining what an optimal piece is. What are we doing with the vision fee? What does this mean when I'm doing the refraction? We spend time after the eye test. The doctor spends time with the patient to make him understand, “That's the overall situation. That's where you are.” Let him understand the situation regarding his health and his eye. The more we do that, the more he is willing to pay and so on and so forth.
The second question is the feeling. Do I feel good enough? Is it worth the money that I spent? Honestly, back to the first point. When you have a good expectation, then you can evaluate if this expectation is fulfilled, and then you can make a choice. It’s not only based on the price, “It’s a very good deal. I didn't pay anything.” You can make a choice on price and on service. You create the feeling later on. If you are in a world where everybody understands the importance to take care of their eye, so then people are willing and open to pay if you are a good operator in the community and you are providing a high-quality service. The competition then is on the service rather than on the price.
If everybody understands the importance of taking care of their eye, then people will pay. And if you are a good operator in the community, you are providing a quality service, then the competition will be on the service rather than the price.
Many of us understand or appreciate the fact that if it's a race to the bottom and if it's a matter of commoditizing and lowering the price, it's ultimately going to devalue the service or the perception of the service. On the flip side, I'm curious to hear what you think about if you do have a patient in front of you who values the service that they are getting. They understand that we can potentially find these multitudes of diseases.
The service provider or the clinic provides a very high-quality eye exam with all of the things that you mentioned like the technology and education aspect. On the low-end, you could go all the way down to $0 and give an eye exam for free, but on the high-end or the other end, it doesn't have to be at the very high-end. How much do you think a provider with that high-quality comprehensive eye exam should be charging?
Canada is a little bit different from the US with insurance. There is a copay. Even then, there is a world about the copay. How much should be the copay? How much are you charging? Even there, it depends. I give you an example of lawyers. With the same lawsuit, you can visit ten lawyers asking for the same service, but you can go from someone that is pretty much zero or very cheap to someone huge and super expensive.
They both have degrees. They both are lawyers. They both can practice, but you have a choice because you have a clear expectation. It’s the same thing when you go to a doctor or any specialist. There is any kind of price. I think that the price of a specific practice should be made by the doctor. He knows what he's offering and he is able to explain it.
With that said, let me give you an answer based on what I think, making the conversation general. How much you can charge? You have the best interest. You know what are you doing and the service you are providing. You can define a price, so you should be free to charge whatever you want as a doctor. I think on average, a pre-test is optimal. An eye test in the range of $100 is a fair price.
Your example of a lawyer is an interesting analogy. It is relevant because many of us have the perception that lawyers may be overcharging sometimes. We can appreciate that there is got to be a balance in there somewhere. Let's say I gave you the example of a lawyer, the same lawsuit as you said. One lawyer charges $50 an hour and the other charges $300 an hour. What would your perception of their work be?
On a like-for-like basis, let me say this. If you are providing safety, it should be like for like. If you get an eye test, you just go in for a pre-test, adjust refraction, and then you got the right test and you are out, you charge $50. You need to understand what are you buying. On a like-for-like basis with the same level of charge, you cannot grow 600 times, $50 and then you go to $300. That's unfair. This is not good. On a like-for-like basis, it's not acceptable. Most likely, the $300 doctor is not going to have a big following in the community on a like-for-like basis.
You need to understand what you are offering because, for $50, you are having a very basic exam. You are getting into the doctor's room for a very basic pre-test, and then you go to the refraction for a few minutes, and you get out. On the other side, if you walk through a deep pre-test examination, you go there, you walk through the visual field, you go to the outer refraction, you go to the optomap, you have an OCT, then you go to a slit lamp, and so on and so forth, you are having a comprehensive eye exam. I don’t know if you can reach the $300, but you can for sure double or $100 or $150 compared to the other one.
I used the lawyer example because I wanted to make it dramatically different. You are right. In an eye exam case, it wouldn't be six times the difference. More so the question was because you assume from the outside before you've met them or before you've gone through the due diligence that they provide a similar service. Would you perceive the higher-cost one to be potentially providing a more diligent and comprehensive service versus the one that's the lower fee?
It's back to the awareness. If you ask a potential patient what is an OCT, what is an optomap, what is a slit lamp, or what are the benefits of this stuff, we are not doing a good job. We are creating a good condition for the $50 and not giving anything. It’s commoditization. I totally agree with you. The patient is confused and the price becomes a key element to define where you go, but it's because of the industry commoditization. That's the main issue.
We need to spend time with the patient and the community. Let them understand what are you buying because otherwise, you are like the guy that is going around in Ferrari and the guy with the bicycle coming next to him and saying, "How much did you pay for this stuff to go around?" He said, "$200,000." He said, "How much do you pay for your stuff to go around?" "$200." The guy felt frustrated. He says, "How is it possible?" He didn't realize that this Ferrari is completely different stuff. You know what I mean. We need to work more.
We need to create more awareness about what a comprehensive eye exam is. What are the services that you should expect? What the different tests that you have can give to you?" When you go there, you don't see many steps of this journey. You don't see much information that you should collect. It's $50, but mainly when it comes to yourself and to the people you love, the $50, $100 or $150 is not a life change. If you can feel confident that your son or daughter is perfect, they don't have any issues. Awareness is very important. We need to make sure that we let the industry step far out from commodization.
We need to ensure that we let the industry step out from commoditization.
One of the things that you touched on right at the very beginning of the conversation that I was hoping to bring back to you now was technology. You mentioned telehealth. I would like to get your thoughts on what technology should we see coming forward, and how is it going to impact the way we perform an eye exam. How is it going to impact the optometrist's job and position as the eyecare provider?
In my point of view is the following. The current condition is creating a very favorable field for growth over tele-optometry. Back to what we said before. We have 1,700 doctors on the market. We have 1,016 that are leaving the industry because they are retired. There is a work-life balance. There are more doors and rooms coming into the market. The physical connection between a doctor and a room is going to be an issue. More rooms and fewer doctors. How can this happen? Technology is creating a highway, and I'm in favor of certain conditions that I'm going to share with you.
It is creating a highway to break this link between the physical doctor and the physical room. Putting a doctor remote that can cover more room. You are increasing access to the care. You are making this care more available to more communities. You are supporting the demand. The point is that we need to be very careful not to create a jungle because, in the world of tele-optometry, you can find lots of things.
This can be a tele-optometry between me. It's a video conference tele-optometry. In EssilorLuxottica and LensCrafters, we have the first chain in the group that we are testing this suite. We haven't created. We have built an end-to-end suite with all the equipment integrated into the same environment under a very restricted protocol that is very aligned with the comprehensive eye exams because this is what we strive for. Comprehensive eye exams, so in that case, the doctor is remote, but he has all the information to take and prescribe glasses or any medical decision.
How far is AI from taking over that? If via remote or virtual apparatus were able to collect all the data, how many steps is it until artificial intelligence takes that optometrist seat to compile the data and give a result?
We are in a situation where the doctor is remote, the patient must be in the practice. That's where we are now. If I understand what you ask, you say how far are we from both.
How far are we from the doctor potentially not being part of the equation?
That's impossible. I had the opportunity to spend a few years now in this industry, Australia and here. The eye is so complex. Not just these, you need to make sure that you are analyzing these patients and you are executing the subject interview with the patient by asking questions to him and interacting with him, and ask the following questions based on the first question that you asked him. Many venues can be open when you are doing the exam.
Only human beings have the experience that can reach this quality. We are all different from one another. Even if you are very close to another one, everything is different in terms of age or lifestyle. I strongly believe that an algorithm can never substitute a doctor. I don't think that in twenty years, we can have artificial intelligence that can substitute a doctor.
The other thing that we touched on earlier was the demand. We touched on that fair bit about the demand and the lack of supply of optometrists. Part of the impetus for this whole series of conversations was that there is a demand for optometrists. There's a mad scramble right now to recruit optometrists or new graduate optometrists. Part of that is some incentive programs that have been rolling out with certain organizations, whether it's signing bonuses or large salaries to work in certain locations or forgivable loans from some organizations.
It all looks very lucrative and glamorous for that new optometrist, but my question to you is based on all of that, do you think that that new optometrist is the person who would leverage looking at all of these incentives in front of them and making a decision based on those incentives? Is that new grad the person with the leverage or is it that these corporations are potentially clouding this optometrist decision and their career path and there could be long-term implications to those decisions?
I think that the market is in distress. There is a strong demand for doctors. Everyone wants a doctor. This is a general market rule. The more the demand is strong, the more the price goes high. We cannot do anything. It is what it is. It's an input for us. What we need to look for is a fair market value. When there is a fair market value, then there’s a fair market value to operate and that's what we have to do. Then there's the chain. The $50 cannot be anymore the $50. The $50 becomes $60, $70 or $80.
At the end of the day, it is a spiral that closes on itself. The more everything goes up, the more the service is going to go up, the more the people have to pay, and that's it. It is what it is. These are money. This is the market. This is a condition that it’s creating there, but how much this one can influence the decision of new grads? I don't see the risk because it’s the same stuff when the profession was much cheaper. You graduated yourself. I make it up. You can get $100. There is someone that can give you $120. You were moving from $100 to $120. Now, the situation is much worse. You start from $200, doubling. I make it up. You are moving from $200 to $250, but it's the same. The mindset of the doctor is exactly the same.
Money is money. These people are out of school. They have to repay the loan. They need to take the best decision in their interest from a financial standpoint. They need to repay the loan. They need to start building their lives. They need to grow and be successful in their life. I don't think that this can influence more or less the way our doctors used to make a decision and now they are making decisions. I make it up. If a doctor would like to be independent, and they were striving for this, he's going in that direction. No matter if before you could have $100 several years ago, and now you are getting $200. That's what you want to do. You go there.
I don't think that this is something different from what it used to be. If you are independent, you know that if you need a doctor operating in your practice, you pay more. You need to ask for more money. I don't think that this one can influence the way how would the doctor will operate. It's a market condition. It is what it is. There is no market that is only $100. An operator in the market is offering $500, so then yes. This can influence the potential decision of a doctor, but if everyone is on $500, you move from $490 to $510. It is what it is.
LensCrafters: If you need a doctor operating in your practice, you pay more.
Let's go a little earlier on in the educational timeline. If we rewind a little further to a student who is like how you were talking about earlier, potentially thinking about going into optometry or evaluating their options in the healthcare field. What advice would you give to that person regarding optometry?
Do it. At this moment, this is one of the best choices that a young student can do, 100%. There is no other industry so healthy as the optical industry. It's good for them. It's good for us. It's good for the patient. There is a strong demand there.
The last question I want to ask you is any other words of wisdom or any other thoughts or insights that you have regarding the profession or regarding optometry from your time in the industry that you would like to share with the audience.
The doctors in the optical industry are the main player. Most of the time, they don't come together. Listening to the view and the voice of the doctor sometimes is not easy. Instead, there are some communities, in a certain way, that should strive to make it easier to understand the need, and then all the operators can act in the direction to support them. They are amazing. They are the main player.
Without the doctor, the industry is not there. Everything starts with an exam. Everything starts from a prescription. That's what it is. It's the number one player in the industry. I personally have experienced being someone that wants to listen to the doctor play in my favor. Sometimes it is not easy. There are lots of different interests and you cannot go bold on a few things. You should do probably lots of more soft things in order to make sure that you can make everyone or as many as possible happy. I'm very happy about this kind of initiative. I can listen. I can learn which are the main concern. Personally, in my little space in the industry, I can take it into consideration, but then also the other can take into consideration all these needs. If we are all aligned, we are all moving in the direction that the doctor is looking for.
There are many different interests, and you cannot go bold on a few things. You should probably do a lot of soft things to make sure that you can make everyone happy as much as possible.
I appreciate that. That is one of the messages I'm hoping to share throughout this series of conversations. It’s that the doctors have the power and ability to make certain decisions. They have the ability to direct the profession the way we would like it to go and grow and thrive in the future. It's up to us to take that control of that. Take the reins and make those decisions and not leave it up to other players who may not have optometry's best interests at heart. I appreciate you sharing that, Alfonso. Thank you very much and thanks again for joining me on the show for The Future of Optometry series. I hope you get a chance to listen to the other conversations. They are going to be valuable if you get a chance to tune into those as well.
Please share with me everything. I can understand how far I am from the others.
That will be a good learning experience for everybody to tune into each other's conversations. I agree.
I thank you for that. Thank you for hosting me. I appreciate it.
My pleasure. Thank you, everybody. This is the fifth episode out of the six episodes in The Future of Canadian Optometry series here on the show. I will see you in the sixth and final episode.
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That was the fifth of the six interviews that I conducted for The Future of Optometry series, presented by Aequus Pharmaceuticals here on the show with Mr. Alfonso Cerullo, President of LensCrafters. As he mentioned, that means he oversees Canada, the USA and Puerto Rico, a very large demographic, a very large geographical area, and a very large brand.
I hope you were able to take away some useful insights from what Alfonso had to share. Whether you feel it's positive or negative, it's all very important that we take this information and we use it for the betterment of our profession working towards growing our profession in the long term. Don't forget, there's one more episode. This was the fifth. The last and sixth episode is coming up with Dr. Kerry Salsberg. I wanted to round up this whole series of interviews with a conversation with a successful and independent optometrist, and Kerry fits the bill. He will share some very candid insights into what we need to do as optometrists to make sure that our profession succeeds.
If you haven't heard some of the previous interviews, please go back and check them out. They are going to live on the internet forever. Whether you are on Apple, Spotify, YouTube, or wherever platform, go back and check them out, and please give me your feedback. I would love to hear your thoughts.
There's a chance that I will have some of these guests back on again in the future. If there's something you think I missed, I want to go back and ask them again down the road. As always, don't forget to share this with your friends. Send a text message, put it on LinkedIn, put up a screenshot on Instagram, and I will see you guys in the next episode.
Important Links
Dr. Alan Ulsifer - Past episode - EPISODE 81 - DR. ALAN ULSIFER, CEO OF FYIDOCTORS - THE FUTURE OF CANADIAN OPTOMETRY
Dr. Daryan Angle - Past episode - EPISODE 82 - DR. DARYAN ANGLE, VP AT IRIS VISUAL GROUP - THE FUTURE OF CANADIAN OPTOMETRY
Bill Moir - EPISODE 83 - SPECSAVERS CANADA GM, BILL MOIR - THE FUTURE OF CANADIAN OPTOMETRY
Alfonso Cerullo - LinkedIn
Apple - The 20/20 Podcast
Spotify - The 20/20 Podcast
YouTube - The 20/20 Podcast
