Proposed Optometry Legislation Would Likely Increase Costs Without Increasing Quality of Care

Optometry legislation proposed in Tennessee could increase consumer costs while doing nothing to increase the quality of eye care, according to comments submitted by the Federal Trade Commission to the Tennessee legislature. The FTC provided the comments in response to a letter from Senate Majority Leader Ward Crutchfield, who requested the Commission's views on Senate Bill 855. The bill restricts the types of agreements that optometrists can make with commercial firms from which they lease space.

FTC Chairman Timothy J. Muris noted, "The Commission has extensive experience analyzing the types of restrictions contained in this legislation. We have consistently found that restrictions on commercial optometric practice reduce competition while offering consumers no offsetting benefit. I'm especially concerned that these kinds of restrictions may undermine public health by increasing prices, leading some people to forego eye care altogether."

The findings in a previous FTC rulemaking, known as the Eyeglasses II Rule, strongly suggest that restrictions on the commercial aspects of optometry and on chain optical stores do not benefit consumers. Eyeglasses II found that restrictions on commercial practice probably harm consumers in three ways: 1) the restrictions tend to hamper some of the more efficient firms, causing an increase in prices; 2) the higher prices lead many price-conscious consumers to defer seeking eye care, therefore harming that group; and 3) the Commission found no evidence to suggest that restrictions on the commercial aspects of optometric practice have any beneficial effect on quality of services for those people who did obtain them.

Tennessee Senate Bill 855 is designed to protect the independence of optometric care providers. The bill states that optometrists "shall be free from any influences that would interfere with their exercise of professional judgement." The first substantive provision then states, "A manufacturer, wholesaler, or retailer of opthalmic materials who leases space to an optometrist shall not, directly or indirectly, control or attempt to control the professional judgement, manner of practice, or practice of an optometrist."

The bill also lists 10 specific situations describing possible violations of its provisions. Included are prohibitions on negotiations and collaborative arrangements generally associated with the ordinary business aspects of an optometric practice. These prohibitions would not allow an optical store to specify an optometrist's professional fees or office hours, to restrict the use of after-hours appointments, or to provide its own office and staff support to the optometrist unless the optometrist supervises the staff.

These prohibitions would tend to make the operation of commercial optometric practice more difficult and would restrict chain optical stores particularly. Chains create a generalized business model that aims to reduce both operating costs and the costs to consumers of finding and purchasing opthalmic goods and services. The proposed restrictions, the comments state, would impair the creation of uniform, chain-wide business practices on basic business matters such as prices, hours of operation, and services offered.

The Commission vote to approve issuance of the comments, which are available on the FTC's Web site as a link to this press release, was 5-0.

The FTC's Bureau of Competition seeks to prevent business practices that restrain competition. The Bureau carries out its mission by investigating alleged law violations and, when appropriate, recommending that the Commission take formal enforcement action. To notify the Bureau concerning particular business practices, call or write the Office of Policy and Evaluation, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, D.C. 20580, Electronic Mail: antitrust@ftc.gov; Telephone (202) 326-3300. For more information on the laws that the FTC enforces, the Commission has published "Promoting Competition, Protecting Consumers: A Plain English Guide to Antitrust Laws," which can be accessed at http://www.ftc.gov/bc/compguide/index.htm.

(FTC File No.V030009)