New Mexico Proposal To Restrict Optometrists' Operations From Retail Settings Could Raise Consumer Prices, FTC Staff Testifies

A proposal by the New Mexico Board of Optometry to restrict the business arrangements between optometrists and complementary businesses, such as stores that sell eyeglasses, could increase costs and restrict consumers' access to eye care, while offering them no countervailing benefits, a staff member of the Federal Trade Commission testified on Saturday. "Such restrictions on competition have cost consumers across the country millions of dollars annually," said Gary Kennedy, an attorney in the FTC's Dallas Regional Office, at a hearing of the Optometry Board held in Albuquerque.

The FTC staff testimony relates to proposed rules that would prevent optometrists from entering leases or any other kinds of business arrangements that contain certain prohibited features: for instance, the proposed rules would prohibit optometrists from entering into agreements with retailers or other businesses to leave some portion of time available for walk-in patients, maintain particular office hours, share support services or personnel, and to have credit accounts handled by a mercantile establishment.

These types of restrictions "discourage potentially efficient and pro-competitive ways of providing services and may tend to inhibit the development of large-scale practices that can take advantage of volume purchase discounts . . .," according to the FTC staff testimony. "The likely result . . . is higher prices for optometric goods and services."

Kennedy also noted that FTC staff studies have shown that restrictions on optometrists' commercial practices did not improve the quality of care, yet they resulted in prices that were 18 percent higher than prices absent such restrictions.

These comments represent the views of the FTC's Dallas Regional office staff, and not necessarily those of the Commission or any individual Commissioner. Copies of the comments are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.