In Contact - September 2008

Most Kiwi?s would agree that August is not exactly a showcase month for extolling the virtues of living in the half-gallon quarter acre pavlova paradise.
In this eastern, inferior quadrant of planet Earth, in the eighth month of the western calendar year, it usually rains. Then it blows. The ground gets soggy, if not boggy and houses slip off their precarious clay cliffs. This year we've had it in big doses and with the recession biting the picture is even less rosy. Finance companies and their principals fall like flies. There are thirty finance companies that have been wound up or are in serious trouble. Some wheeler dealers need ?protection?. Five billion dollars are ?missing?. that's big bikkies in the NZ context.
Someone has to pay for it?
The Kiwi fixation with property goes through yet another boom and bust cycle.
I arrived here in ?93 during the initial recovery phase in the years following the depths of the ?87 crash. It was a similar picture then.
All the eggs in one basket.(Well maybe two...)
Today the crazy Kiwi property system, that is largely free of capital gains tax and stamp duties - while heavily taxing legitimate workers and business owners - has created a state in which it seems every man, maiden and their dog, is a multiple property owner and property ?expert?. Some leverage themselves into debt servitude, seemingly forever. Much else spins off this made-in-NZ, macro-economy. A steady flow of immigrants helps fuel the fire.
Much of the economic policy of the past decade or three has led to some calling NZ the ?big economic experiment?. There was the tightly controlled era of Muldoon, followed by the Labour driven experiment of total deregulation, Rogernomics and no holds barred state divestment. It provided some real bargains and money was certainly made. It provided upliftment for some and made NZ an attractive investment playground for others.
There are morals to this story that have other parallels.

So What?

Optometry has of course also been the victim of economic and competitive deregulation. The profession has simultaneously and longitudinally suffered a push-pull of anti-competitive deregulation. The rather crazy deregulation of the sale of contact lenses, ?in a state ready for use?, by a 1996 select committee ruling ? influenced it would seem by some with vested interests - is one reason we see so many practitioners voicing their displeasure with trying to compete in the current contact lens market.
To make the professional?s task even harder they are ever more controlled and have to be more compliant. They must jump through a myriad of regulatory hoops at every turn in order to retain their right to practice, while on the retail side of things they get screwed at every corner. Practice owners have the additional load of business compliance.
We all know there's heaps of that!
Since ownership of eyecare practices was deregulated, much more has changed. NZ optometry and dispensing are in the throes of rampant upheaval as supply chain and commodity based competitive forces influence the market, like never before. Internet supply of specs, CLs, drugs and much more, are further pressures to be faced.
This magazine has devoted page after page in the past months covering many sides of the increasing participation of small, medium and large groups in NZ retail optometry. Many have been talking to some of the newcomers in order to suss out the options. Rumours abound as to who has bought who and we hear numerous stories that profess ?small group X has sold to large chain Y?. There is much hearsay and innuendo and stories from afar of success and failure. Some tell of untold money making opportunities while others tell of major dissatisfaction and a life of servitude.
I've been through two long-term partnerships, each over ten years in two countries with a wide range of partners and trading conditions, as well as having worked in dispensing owned ?stores?. I have seen and experienced various forms of buying groups, chain stores and all manner of practice style and retailing. It's been an interesting journey thus far with I am sure many twists and turns ahead.
that's life.

So Where to Now?

I hear the concerns and read the discussions on these issues that are obviously dear to many.
What I do believe is that when all is said and done and all things considered, there will always be passionate people that rise to the top. Whether that is as far as ethical and dedicated clinical care is concerned or the passion of practice management and business, we will see the best of the best survive and flourish. Mating and balancing the different aspects of a team of people with the desire to be the best will almost always lead to a high level of quality, service and value for money. that's what the public really want and need. In time those that provide a poor quality product will always be found out. Bad service is usually evident early in the process.
Communication is key and for the practitioner that excels it is usually evident from the start that this person knows their stuff, cares about their patients and is passionate about what they do.
There is still room for the true independent. Many have been around the block a few times. Although it may seem contradictory, diversification is the key ? both in practice style and investments ? while at the same time subspecialisation will also help protect one?s practice and differentiate one from the mass mediocrity of mall-based commodity retail shoptometry. that's not to say there's no place for the mall based stores. There obviously is, both here and overseas. It's really a matter of what you prefer. If one adapts to market conditions and if the practice is built on firm foundations, with an experienced team of passionate professionals and staff, then you will prosper and be able to ride out the tough times, where others will certainly fail.
It's going to be an interesting few years in NZ Optometry and eye care...
The news is of course not all gloomy. Summer lies ahead, somewhere, We usually have a taste of it in September (and then it hides away until New Year).
There were a few medals at the Olympics and the ABs left the Boks scoreless in Cape Town. How embarrassing. Full credit.
Of course we have a general election in two or three months...
Interesting times indeed.

 

For more information or any comments email Alan at incontact@optom.co.nz.