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How Badly Are We Being Ripped Off On Eyewear? Former Industry Execs Tell All (latimes.com)
LA Times reports: Charles Dahan knows from firsthand experience how badly people get ripped off when buying eyeglasses. He was once one of the leading suppliers of frames to LensCrafters, before the company was purchased by optical behemoth Luxottica. He also built machines that improved the lens-manufacturing process. In other words, Dahan, 70, knows the eyewear business from start to finish. And he doesn't like what's happened. "There is no competition in the industry, not anymore," he told me. "Luxottica bought everyone. They set whatever prices they please."
Both Butler and Dahan (former executives with LensCrafters) acknowledged what most consumers have long suspected: that the prices we pay for eyewear in no way reflect the actual cost of making frames and lenses. When he was in the business, in the 1980s and '90s, Dahan said it cost him between $10 and $16 to manufacture a pair of quality plastic or metal frames. Lenses, he said, might cost about $5 a pair to produce. With fancy coatings, that could boost the price all the way to $15.
He said LensCrafters would turn around and charge $99 for completed glasses that cost $20 or $30 to make -- and this was well below what many independent opticians charged. Nowadays, he said, those same glasses at LensCrafters might cost hundreds of dollars. Butler said he recently visited factories in China where many glasses for the U.S. market are manufactured. Improved technology has made prices even lower than what Dahan recalled. "You can get amazingly good frames, with a Warby Parker level of quality, for $4 to $8," Butler said. "For $15, you can get designer-quality frames, like what you'd get from Prada."
Both Butler and Dahan (former executives with LensCrafters) acknowledged what most consumers have long suspected: that the prices we pay for eyewear in no way reflect the actual cost of making frames and lenses. When he was in the business, in the 1980s and '90s, Dahan said it cost him between $10 and $16 to manufacture a pair of quality plastic or metal frames. Lenses, he said, might cost about $5 a pair to produce. With fancy coatings, that could boost the price all the way to $15.
He said LensCrafters would turn around and charge $99 for completed glasses that cost $20 or $30 to make -- and this was well below what many independent opticians charged. Nowadays, he said, those same glasses at LensCrafters might cost hundreds of dollars. Butler said he recently visited factories in China where many glasses for the U.S. market are manufactured. Improved technology has made prices even lower than what Dahan recalled. "You can get amazingly good frames, with a Warby Parker level of quality, for $4 to $8," Butler said. "For $15, you can get designer-quality frames, like what you'd get from Prada."
Not quite. We just need one insurer that pays for everything. They can have two or three policies with defined levels of care with limits on the ability to move between plans. Everyone picks one. Everyone pays the premium to cover the costs for that plan (parents pay for kids to age 18). Roll up all the various insurance and government medical programs into this one insurer. Pick an unannounced date to price the stock on all private companies at one time and buy them out (or the fraction of their business that is medical out) and transfer the backing assets to the single insurer. Transfer the assets on account at the government (state and federal) and unions and corporations and everything else health related into that one insurer. Then each year adjust the premiums based on the costs seen and projected for the next year to keep the program 100% solvent. Add limits on tort actions. Make that insurer the only payer so every medical doctor or facility will know exactly what will be paid out for anyone based on which of the two or three policy levels they have selected. No in or out of network - every facility and doctor is by definition in network. Make the pharmacies use the same insurer for payment. Adjust reimbursed costs based on cost of living by location and adjust reimbursements paid from then on based on cost of living changes at each location. There would be some quirks to be worked out, but just go to single payer that covers everybody from birth to death and adjust premiums as needed and call it good. Let capitalism then work out how many MRI machines every local doctor really needs access to and the like. People are covered wherever they are in the country. Temporary visitors to the country could be charged a fee for accident type injuries during their stay here. Full time non-citizens living here could pick a plan just like anybody else. Big disruption in "the way we do things". Yes. But what we have now isn't working and isn't sustainable. Everyone actually "needs" good coverage regardless of age. When you are young, orthodontics are pricey. Glasses are pricey. Broken bones are always pricey. Pregnancy is pricey. Cover everybody. Adjust the tiers till things are workable - no reason to pay for pregnancy premiums when you aren't female or are but aren't in the childbearing years for example. Adjust a long term care rider based on your age. But other than a few things like that, keep the differences between the policies limited (think adding a pregnancy rider for example to a basic level of care policy). Simpler for everybody. You could even adjust the payouts based on the doctors and facilities overall success rate on the procedure to give experience a boost. Lots of possibilities, but it all starts with getting rid of the patchwork of insurance companies, massively overlapping facilities and equipment, and all of the in and out of network garbage there is.