Understanding Patient Decisions and Profitability

So far in this series, we’ve explored revenue, patient exams, and revenue per exam as foundational metrics for understanding how your practice generates income. There’s one additional metric we need to cover in this section, which is capture rate. In eye care practice practice management, capture rate is a pivotal metric for building profitability. This article will explore the basics of capture rate, teach you how to easily apply it to practical daily activities, and suggest strategies to create better outcomes for your patients and your practice.

Revenue Per Exam is actually the outcome of your capture rate. However, what capture rate tells you – and revenue per exam does not – is which product choices are being made and how often. Monitoring your capture rate helps you understand how to build that all-important revenue per exam metric. 

Improving the outcome of the patient encounter begins with helping patients make good decisions about their eye health and vision products, and you can leverage capture rate to accomplish that. Step one is finding your starting point, so we’ll begin with a basic description of what capture rate is and how it helps you measure your practice activities.

Doing the Math

“Capture rate” may sound complicated, but it’s actually extremely easy to calculate. It’s a simple, straightforward way to answer the question “What percentage of my patients chose to complete a specific purchase?” That purchase could be any specific service or product. Let’s look at a quick example. 

Consider a practice that conducted 100 eye exams last week, resulting in 30 patients purchasing eyeglasses. The capture rate for eyeglasses would be calculated as follows:

You can see that Capture Rate quickly shows you how well you are converting patient visits into revenue-generating sales. That makes it very easy to see the relationship between what’s happening in your exam room or optical department, and what’s happening in your bottom line.

Real World Example

Here’s a revealing real-world example of how capture rate can uncover problems and help you solve them. A practice owner decided last year that she wanted to focus on contact lens services. She made adjustments in her marketing, reaffirmed her costs with her vendors, and invested in staff training. She successfully increased the number of contact lens exams by 19%. However, in the same period of time, she had not seen the expected rise in her practice revenue. She clearly wasn’t getting the desired results from her efforts. 

An assessment of her contact lens capture rate revealed that only 35% of those hard-won contact lens exams resulted in the purchase of an annual supply of contact lens. Had she been tracking that capture rate for annual supply sales from the start, she would have been able to work on strategies to increase her product sales before arriving at the end of the year. The missed opportunity was expensive and unnecessary.

Tracking capture rate regularly will help you maximize your opportunities for successful results. 

What Does Capture Rate Really Tell You?

Capture rate is closely related to revenue per exam in that it tells you how well you and your staff are working with patients, and whether your patients are understanding your needs assessment for their vision solutions. The difference between these two metrics is that capture rate measures specific activities – what types of purchase decisions your patients are (or are not) making, where revenue per exam is the cash result of those decisions. 

• Relationship of Patient to Outcome: Capture rate reflects the patient’s engagement and satisfaction level, indicating whether they are opting to complete treatment recommendations and choosing the best products for their visual needs.
• Effectiveness of Value Proposition: Because a high capture rate signifies that patients understand the value of products and services offered, it indicates successful sales conversions and effective sales strategies.
• Language/Communication: Clear and effective patient education, using both verbal and non-verbal communication skills, plays a pivotal role in influencing capture rate by conveying product benefits and addressing patient needs.
• Merchandising: Strategic product placement and visual merchandising enhance capture rate by attracting patient attention and encouraging purchase decisions.

Building Patient Value 

Profitability is built on more than just seeing more patients. It’s also about understanding and maximizing the value of every interaction. When the doctor and staff communicate the value of their services and products successfully, the outcome for each encounter is better – both for the patients and for the bottom line. 

Now that you have an understanding of what capture rate is, Let’s examine how you can put it to work to build your practice.

Standard Capture Rates

At this point, it should be clear that capture rate is flexible enough to measure a variety of operations in your business. However, there are two applications that have become standard practice for optometric management. They are the “Optical Capture Rate” and the “Complete Pair Capture Rate.” These two metrics are used by industry experts to assess the success of a practice in the optical, as well as the conversations taking place during the exam. Let’s take a look at these standard capture rates, and how they are measured.

Optical Capture Rate: Measures the percentage of patients who make any frame/lens purchase during an exam encounter. 

Definition: the number of eyewear orders (whether frame and lens, frame only or lens only) divided by the number of refractive exams* in the same period. (If you’re more comfortable with percentages than decimals, multiply that number by 100%.)

This result is your Optical Capture Rate, the number of optical sales you can expect to realize every time you seat a patient for an exam. A healthy optical capture rate should be at or above 0.65 (65%). This number can also be impacted by the structure of your practice. If you are primarily serving managed vision care patients, it may actually be higher.

Complete Pair Capture Rate: Tracks the percentage of patients who purchase a complete pair of eyeglasses, including both frames and lenses. 

Definition: The math for this is similar – find the number of times the desired purchase (in this case, an eyewear order that includes both a frame and a lens purchase) is made, and divide by the number of eligible exams.  

These two ‘standard’ optical capture rates will give you an understanding of how well your basic optical sales routines are working. They’ll also help you understand whether the conversations you are having in the exam room are resonating with your patients as they make their retail purchase decisions.

Monitoring Capture Rate

Capture rate, particularly these two standard optical capture rates, should be monitored on a weekly basis. As you track this number, make note of any fluctuations in staffing and scheduling. You may be able to draw some correlations between the types of exams and patients you’re seeing as well. All of this information will help you develop strategies to improve your results.

CAPTURE RATE

Keep a Narrow Focus. Because you can leverage capture rate in so many different ways, it’s important not to bite off too much at once. Narrow your focus to a single metric – two at the most – in this category, and work diligently towards improvement. Slow and steady wins the race here. You may be tempted to try and hit everything at once, but if you want sustainable growth, you’ll need to proceed at a pace that is manageable and grows gradually over time.

How to Optimize Capture Rate

Creating and refining strategies to improve and/or maintain your capture rate should be an ongoing process. You’ll want to do some investigation and observation in areas or activities that have less than optimal results, and it’s often productive to involve your staff in brainstorming solutions. Here are a few proven techniques for general improvements:

• Continuous Staff Training: Provide ongoing training on product knowledge, sales techniques, and effective communication strategies to empower staff and enhance capture rate.
• Enhanced Product Visibility: Strategically display products, highlight promotions, and create engaging displays to attract patient attention and drive sales.
• Personalized Patient Interactions: Tailor interactions based on patient preferences, needs, and purchase history to build rapport and increase capture rate.
• Collect Data: Always be prepared to follow the data. The results of your analysis may surprise you, and that’s why it’s so important. Data uncovers trends that may otherwise be invisible. Keep tracking consistently and monitoring your results, so you can understand what successfully moves the needle towards your goals. 

Expected Outcome

When you consistently monitor your capture rate in any given area, you will have a clear opportunity to improve and optimize performance. Diligent attention should yield growth that is clear, measurable, and positive. A higher capture rate will result in:

• Increased Revenue: A higher capture rate directly translates to increased revenue generation. (Improved revenue per exam!)
• Enhanced Patient Satisfaction: Patients feel valued and satisfied when their needs are met effectively, leading to positive reviews, referrals, and repeat visits.
• Improved Practice Efficiency: Streamlined sales processes and effective staff-patient interactions result in improved operational efficiency and productivity.
• Data-Driven Decision-Making: Insights from capture rate analysis empower practices to make informed decisions, optimize resource allocation, and drive continuous improvement.

Additional Information

As you start to think about building your practice profitability by improving your capture rate, there are a few additional concepts and tools you need to consider.

Adapt for Your Practice: Different practice structures, such as optometry, ophthalmology, and optical retail, may require tailored strategies to optimize capture rate effectively. The most important question is how much time, effort and resources you are investing in your desired results? Understand the dynamics of your unique business so you can select and implement targeted initiatives appropriately and maximize performance across the practice. 

Utilize Patient Feedback: Patient feedback serves as a valuable source of information for understanding capture rate drivers and opportunities for improvement. Actively seek feedback both at the moment of purchase, and afterwards through surveys, reviews, and direct communication to refine strategies and enhance patient experiences.

Embrace Technology and Innovation: Incorporate cutting-edge technology and innovative solutions, such as online appointment scheduling, telehealth services, and digital marketing campaigns, to broaden the reach and impact of your optimization efforts.

Be Collaborative: Effective capture rate optimization requires collaboration across different departments and roles within the practice. Build cross-functional teams, fostering communication, and aligning goals to drive coordinated efforts towards optimal outcomes.

Foster a Continuous Improvement Culture: Establish a culture of continuous improvement, where innovation and feedback are both valued and safe to provide, learning is encouraged, and innovation is embraced. This helps cultivate an environment conducive to ongoing improvement and overall practice success where employees feel confident enough to engage in the process.

Incentivize Staff: Implementing a reward system for staff who achieve high capture rates can motivate them to engage more effectively with patients. For example, offering bonuses or recognition for staff members who excel in converting patient visits into purchases can drive successful sales performance.

Build Patient Education Tools: Educate patients on the importance of recommended products and services. For instance, create standard scripts, informative brochures or videos explaining the benefits of certain lenses or treatments. When patients understand the value, they are more likely to make a purchase.

Don’t Forget Follow-Up: Leverage third-party technologies for after-sales service and continuous communication with patients. Sending personalized emails or messages with special offers can encourage patients who were initially hesitant to complete their purchase.

Personalize Service: Leverage patient notes to track patient preferences and history. Use this data to personalize interactions and recommendations.

Conclusion

Capture rate is a dynamic metric that not only measures sales effectiveness but also reflects the quality of patient interactions and successful communication of your value proposition. By leveraging strategic planning and continuous improvement initiatives, business owners can optimize capture rate, which drives profitability and raises the revenue per exam. This will also enhance patient satisfaction, positioning your business for growth and long-term success. 

This discussion wraps up our chapter on foundational metrics. We’ve covered your top-line revenue – on both sides of the business – your exam count, revenue per exam, as well as covering how to calculate your capture rate, and understand what it means in terms of your business activities. In our next chapter, you’ll learn how to leverage your metrics to start improving performance in your clinic business. We’ll take a look at how to optimize your exams, services and contact lens sales. Working on those key functions will help you build a higher revenue per exam in your clinical practice, so you can build a sustainable and successful business.