| Highlights of Review of Optometry’s 2008 Income Survey
| |
| Average Net Income
|
$121,273 (n = 530) |
| Median Net Income
|
$100,000 (n
= 530)
|
| Average Net Income by Years in Practice
| |
| Less than 10 years
|
$93,726 (n = 176) |
| 11 to 20 years
|
$128,191 (n = 130) |
| 21 to 30 years
|
$146,744 (n = 119) |
| More than 30 years
|
$138,728 (n = 65) |
| Self-Employed O.D.s Average Net Income
| |
| All self-employed O.D.s
|
$136,594 (n = 334) |
| Solo practitioner
|
$128,441 (n = 193) |
| Partner/group practice
|
$154,372 (n
= 117)
|
| Franchisee
|
$122,893 (n = 12) |
| Other
|
$85,222 (n
= 8)
|
| Employed O.D.s Average Net Income
| |
| All employed O.D.s
|
$93,886 (n = 196) |
| Other O.D. or M.D.
|
$94,077 (n = 104) |
| Commercial firm
|
$86,230 (n = 28) |
| HMO/PPO
|
$101,567 (n = 21) |
| Other
|
$93,420 (n = 41) |
| Average Gross Revenue – All O.D.s
|
$443,752 (n = 428) |
| Median Gross Revenue – All O.D.s
|
$350,000 (n = 428) |
| Self-employed O.D.s Average Gross Revenue
|
$512,906 (n = 302) |
| Self-employed O.D.s Median Gross Revenue
|
$450,000 (n = 302) |
| Employed O.D.s Average Gross Revenue
|
$275,572 (n = 126) |
| Employed O.D.s Median Gross
Revenue
|
$126,000 (n = 126) |
Dr. Almaraz’s story is not uncommon. For the first time in years, it seems that optometric income actually decreased rather than increased—at least among our survey respondents. Also, gross revenues are down for at least the fifth year in a row. Still, profit margin appears to be holding steady, and nearly two-thirds of O.D.s say they are at least satisfied with their income.
These are some of the results of Review of Optometry’s 21st Income Survey. The survey was e-mailed to more than 22,000 readers, and more than 530 optometrists responded.
Numbers Out of Whack?
According to our survey, the average optometrist (including both self-employed and employed doctors) had an annual net income of $121,273 in 2008. Compare that to $135,484 in 2007. That’s a decrease of 10.5%. Very extreme salaries, either very high or very low, can skew the average income. So, median income—the midpoint amount of all responses—may provide a different picture of the typical optometrist’s income. Among all O.D.s, median net income was $100,000 in 2008 compared with $120,000 in 2007—a decrease of more than 16%.
At this point, you’re asking yourself, “Can optometric income really have dropped that much? Is this survey out of whack? Maybe there are artifacts in the data? Or, maybe those O.D.s who aren’t making as much money have more time to answer e-mail surveys?” Maybe. The sample size of this survey is likely not truly representative of the larger population of all optometrists. However, the number and distribution of this year’s survey respondents are nearly identical to those of last year’s survey. (For example, 539 O.D.s responded to last year’s survey and 530 responded to this year’s survey. Also, the numbers of O.D.s in each employment category, and the numbers of O.D.s categorized by years in practice, are very similar to those of our survey last year.)
Self-Employed and Employed
Average income for self-employed doctors decreased to $136,594 from $151,548 in 2007, a decline of almost 10%. Then again, some private practitioners are doing better than surviving. “In a tough economy, my income has not decreased but has increased,” says Dale P. Lindsey, O.D., of Cortland, Ohio. Dr. Lindsey credits a well-defined five-year marketing plan for bolstering the bottom line. Among optometrists who are employed, average salary decreased to $93,886 in 2008 compared with $107,899 in 2007, a drop of almost 13%.
Optometrist Daniel Broza, of 20/20 Eyecare in Williamsburg, Va., takes it with a grain of salt. “There are many people in worse financial shape who have lost their jobs or taken a pay cut.”
Gross Income
Average gross revenue for all O.D.s has been declining since 2004, according to our surveys. Average gross in 2008 was $443,752 compared with $469,711 in 2007, a dip of 5.5%. For self-employed optometrists, average gross revenue decreased from $529,478 in 2007 to $512,906, a reduction of 3.1%.
Profit Margin
Profit margin is net income divided by gross revenue, and it’s often used to indicate a practice’s economic health. According to respondents, profit margins in 2008 compared favorably with those of 2007. Most O.D.s say their profit margin stayed the same (56% in 2008; 55% in 2007) or even increased (25% in both 2008 and 2007). One O.D. explains how he did it. “We’ve managed to contain our cost of goods as well as maximize the medical billing end of our practice,” says Samuel S. Estes, O.D., who is part of a group practice in Lansing, Mich. “Providing exceptional customer service has also helped in that patients don’t mind spending more if we can continuously exceed their expectations.”
A Plan for Improvement
Things can only get better, right? Many O.D.s believe the worst is over and it’s time to start looking ahead. Nearly half of respondents (45%) expect their income to increase in 2009. They say they’ll do this by increasing medical billing and services, improving efficiency, honing marketing efforts, boosting fees and seeing more patients. Making improvements doesn’t necessarily mean tightening your belt. Leslie Falcon, O.D., of Chandler, Ariz., plans to get more involved in community service. “Word of mouth has been our best advertisement, and it seems the more people I meet, the more patients I have,” she says. “Plus, I enjoy volunteering.”
