Study, which is directly relevant to the rules being considered
by this Committee, is described in more detail below. A copy of
the Contact Lens Study is attached to this testimony.

II. Description of the Rules

The first of the new rules defines a "contact lens
prescription" as a written order from an optometrist to another
optometrist, physician, or dispensing optician. The second
new rule, which governs “determination of, contact lens
specifications by dispensing opticians," applies only to
opticians who are not directly supervised by the prescribing
optometrist. Such independent dispensing opticians may be
authorized to determine contact lens specifications, with the
consent of the prescribing optometrist. But a contact lens
prescription is not to be written until after a final evaluation
of the lens on the eye of the patient; at that time, the
prescription is released to the dispensing optician.

Under these new rules, opticians may still fit contact
lenses, but only under much more tightly controlled direction by
optometrists. A contact lens prescription may be filled only by
an optician who works under the optometrist's direct supervision
or by an independent dispensing optician who must, in each case,
be specifically and individually authorized in advance by the
optometrist. By this requirement, and by requiring that a
prescription be released directly to the dispensing optician,
rather than to the consumer, the rule now apparently gives the
optometrist considerable, if not complete, control over the
consumer's choice of an optician.

-..continued)

"cosmetic" contact lenses that were studied are lenses worn as an
alternative to eyeglasses. The study did not deal with
therapeutic lenses, which may be required for medical reasons
other than the simple correction of vision.

10

4 Wash. Admin. Code § 246-851-520. Other regulations have
been amended so that a prescription is always referred to as
"written." See Wash. Admin. Code §§ 246-851-270, 246-851-360.

Wash. Admin. Code § 246-851-530.

3 an earlier draft of the regulation had referred to "the
patient's request" that a prescription be filled by an
independent dispensing optician. In the final regulation, that
phrase, which implied that the consumer might have had some right
to choose where to have contact lenses fitted, was deleted and
the requirement that the prescription be issued only to the

(continued...)


with respect to some conditions, some other providers did
slightly better for other conditions.

The study also examined the prices of cosmetic contact lens
- fitting services. In contrast to quality of service, which was
substantially the same among provider groups, prices ranged
widely. On average, ophthalmologists charged the highest prices,
opticians and non-commercial optometrists the next highest
prices, and commercial optometrists the lowest.

The Contact Lens Study remains the most complete, and
reliable study of this subject of which we are aware. Because
it studied how opticians fitted cosmetic contact lenses in
jurisdictions where they were permitted to provide that service,
its findings, although based on data now twelve years old, should
still apply where they are permitted to do so now. The study's
findings do not support claims that there are significant
differences in the quality of cosmetic contact lens fitting
services performed by different types of providers.

Iv. Conclusion

Allowing opticians to provide contact lens fitting services
in competition with other providers can be expected to encourage
all types of providers, including optometrists and
ophthalmologists, to lower their prices or improve their
services. Restricting how qualified opticians can compete in
offering contact lens fitting services appears to be unnecessary
to protect the public from poor quality service. Instead,
restricting that competition is likely to result in consumer
injury, by reducing competition and increasing the prices of
contact lenses.

* out of 24 comparisons that were possible, based on the data,
differences appeared for only three. The differences were small,
and evidences of superiority were evenly shared; that is, each
provider group (opticians, optometrists, and ophthalmologists)
appeared (slightly) superior to the others on one of these three
comparisons. Contact Lens Study, supra n. 10, pp. 37-38.

20 Optometrists' associations, in opposing the Commission's
rulemaking efforts, criticized the study's methods and findings.
After reviewing these criticisms, the Commission concluded that the
Contact Lens Study (and the Bureau of Economics Study) provided
reliable information about the cost and quality of eye care, and
that the criticisms offered did not materially discredit the
study's key findings. Commission Statement, supra n. 6, at 10,294.

8


restrictions on commercial practices have caused significant
injury to consumers, in both monetary losses and less frequent
vision care, without providing consumer benefit. Based on the
evidence assembled in the rulemaking proceeding, the Commission
adopted a rule to prohibit state-imposed restrictions on several
types of commercial arrangements.

In the course of those proceedings, the staff of the
Commission conducted two comprehensive studies. The first,
published in 1980 by the Commission's Bureau of Economics,
compared the price and quality of optometric goods and services
in markets where commercial practices were subject to differing
degrees of regulation ("Bureau of Economics Study"). The
second, published in 1983 by the Bureaus of Consumer Protection
and Economics, compared the price and quality of cosmetic contact
lens fitting services performed by opticians, optometrists, and
ophthalmologists ("Contact Lens Study"). The Contact Lens

s Ophthalmic Practice Rules (“Eyeglasses II"), Scatement of
Basis and Purpose, 54 Fed. Reg. 10285, 10286 (March 13, 1989)
("Commission Statement").

7 In the course of the formal "Eyeglasses II" rulemaking,

the Commission received 243 initial comments, 24 rebuttal
comments, and testimony from 94 witnesses during three weeks of
public hearings. The commenters and witnesses included consumers
and consumer groups, optometrists, sellers of ophthalmic goods,
professional associations, federal, state and local government
officials, and members of the academic community.

5 rhe rule, drafted to apply to optometry, prohibited
restraints against affiliating with non-optometrists, locating in
commercial settings, operating branch offices, and using
nondeceptive trade names. In addition, the Commission decided to
retain, with modifications, the prescription release requirement
from the original Eyeglasses Rule. The Eyeglasses II rule was
vacated by the Court of Appeals, on the ground that the
Commission lacked the statutory authority to make rules declaring
state statutes unfair. But the Commission's substantive
findings, that the restrictions harmed consumers, were not
disturbed. California State Board of Optometry v. FTC, 910 F.2d
976 (D.C. Cir. 1990), reh'g denied, 924 F.2d 243 (1991).

° Bureau of Economics, Federal Trade Commission, The Effects
of Restrictions on Advertising and Commercial Practice in the
Professions: The Case of Optometry (1980).

10 Bureaus of Consumer Protection and Economics, Federal
Trade Commission, A Comparative Analysis of Cosmetic Lens Fitting
by Ophthalmologists, Optometrists, and Opticians (1983). The

(continued...)


III. Findings of the Contact Lens Study

Preventing qualified opticians from fitting contact lenses
“unless specifically permitted to do so by optometrists will limit
how effectively opticians can compete with optometrists. Thus,
it is likely to increase prices, and decrease the availability of

contact lens fitting services. Restricting this competition
might be justified if restrictions were necessary to assure high
quality care. But based on the results of the Contact Lens
Study, we believe that competition among these provider groups is
unlikely to have any adverse effects on the quality of eye care
provided to consumers.

The Contact Lens Study was designed to examine the
differences, if any, between the contact lens fitting services
provided by opticians and the services proyided by others.

The study compared the quality of cosmetic” contact lens

3. ..continued)

optician and not to the patient was added. The justification
given for these changes in the draft was that federal and state
laws did not require releasing a contact lens prescription to a

patient.

“ phis conclusion about the relationship between price and
restrictions on competition is supported generally by economic
analysis and by numerous studies. See, e.g., Bureau of Economics

Study, supra n. 9. See generally, C. Cox and S. Foster, The
i i ion, FTC Bureau of

Economics Staff Report, October 1990 (reviewing studies reported
in economics literature); Bureau of Economics and Cleveland
Regional Office, Federal Trade Commission, Improving Consumer

Truthful Advertising (November 1984); L. Benham & A. Benham,

Control, 18 J. L. & Econ. 421 (1975); Benham,
isi i , 15 J. L. & Econ. 337

Advertising on the Price of Eyeglasses
(1972). See also J.R. Schroeter, S.L. Smith and S.R. Cox,

Empirical Investigation, 36 J. Indus. Econ. 49 (1987); T.
Calvani, J. Langenfeld and G. Shuford, isi

Competition at the Bar, 41 Vand. L. Rev. 761 (1988).
% Contact Lens Study, supra n. 10.

6 whe Contact Lens Study covered cosmetic contact lenses,
which are lenses worn as an alternative to eyeglasses. It did not
cover therapeutic lenses, which are those that may be required for

other medical reasons, such as for cataract surgery patients. The
(continued...)


V930004

COMMISSION AUTHORIZED

PREPARED STATEMENT
OF
CHARLES A. HARWOOD
DIRECTOR
SEATTLE REGIONAL OFFICE
FEDERAL TRADE COMMISSION
BEFORE THE
JOINT ADMINISTRATIVE RULES REVIEW COMMITTEE
OF THE
WASHINGTON STATE LEGISLATURE

December 15, 1992


fitting provided by opticians,” private optometrists,
commercial optometrists and ophthalmologists. The staff was
assisted in the study by the major eye care professional
organizations: the American Academy of Ophthalmology, the

- American-Optometric Association, and the Opticians Assoc‘ation of
America. Representatives of these associations agreed upon the
procedures to use and standards to apply in examining the eyes of
the study subjects. The study included over 500 cosmetic contact
lens wearers located in 18 urban areas across the country. All
of the survey subjects had been fitted with contact lenses within
the preceding three years and were still wearing them.

An ophthalmologist, an optometrist, and an optician examined
each subject, looking for seven potentially pathological
conditions that are commonly associated with improper contact
lens fitting. The procedures closely resembled those that
contact lens fitters perform in "follow-up" evaluations. For
each subject, a "summary quality score" was determined based on
the examiners' findings for each of the seven conditions for each
eye. In addition to this summary quality score, intended to
indicate the overall health of the subject's eyes, each of the
seven eye conditions was also scored separately. The survey data
was then analyzed by expert statistical consultants and
economists experienced in survey research.

The study found that the quality of cosmetic contact lens
fitting provided by opticians was comparable to that provided by
ophthalmologists and optometrists. The study found that there
was no significant difference in the quality of cosmetic contact
lens fitting performed by the different classes of providers.

The summary quality scores showed no statistically significant
differences among the provider groups. For some of the
particular conditions, small differences did appear; however,
those differences are not consistent across provider groups.

That is, while opticians did slightly better than other providers

6. . continued)

study also did not cover types of lenses which had only recently
become available, such as extended wear lenses.

" whe opticians included in the study were permitted, under
the laws of their states, to fit contact lenses.

*® Commercial optometrists included those who were associated
with chain optical firms, used trade names or practiced in
commercial locations.


Mr. Chairman and Members of the Committee: I am pleased to
appear before you today to discuss the recent amendments to the
rules of the Washington State Board of Optometry. These new
rules affect how optometrists deal with opticians concerning
contact lens prescriptions. This testimony represents the
views of the Seattle Regional Office and the Bureau of Consumer
Protection of the Federal Trade Commission. They are not
necessarily the views of the Commission or any individual
Commissioner.

This testimony will concentrate on two new rules that have
the effect of limiting competition between dispensing opticians
and optometrists, by giving optometrists control over consumers’
ability to choose where to have their contact lens prescriptions
filled. Based on the evidence that the staff of the Federal
Trade Commission has assembled on this issue, we believe that
allowing opticians to compete in fitting contact lenses is likely
to benefit consumers by increasing competition and lowering
prices without impairing the quality of eye care. We are
concerned that the rule will result in consumers losing those
benefits.

I. Interest and Experience of the Federal Trade Commission.

The Federal Trade Commission is empowered to prevent unfair
methods of competition and unfair or deceptive acts or practices
in or affecting commerce.” Pursuant to this statutory mandate,
the Commission encourages competition in the licensed
professions, including the health care professions, to the
maximum extent compatible with other state and federal goals.

For several years, the Commission and its staff have investigated
the competitive effects of restrictions on the business practices
of state-licensed professionals, such as lawyers, physicians,
optometrists, dentists, pharmacists, and other non-physician
health care providers.” In addition, the staff has submitted

, Inquiries regarding this testimony should be directed to
Charles A. Harwood, Director, Seattle Regional Office (206-553-
4656) or to Richard F. Kelly, Assistant Director, Bureau of
Consumer Protection (202-326-3304).

2 15 U.S.C. § 41 et seg.

* See, @.g., joni
, 110 F.T.C. 549 (1988); i ‘n, 106
F.T.C. 556 (1985); Wyoming State Board of Chiropractic Examiners,
110 F.T.C. 145 (1988) (consent order); i i i
Association, C-3351 (consent order issued November 19, 1991, 56
Fed. Reg. 65,093 (December 13, 1991)); Texas Board of
(continued...)


comments about these issues to state legislatures, administrative
agencies, and others. As one of the two federal agencies with
principal responsibility for enforcing antitrust laws, the
Commission is particularly interested in restrictions that may

’ adversely affect the competitive process and raise prices to
consumers.

The staff of the Commission has been investigating
competition problems in the eye care professions for nearly two
decades. The Commission conducted a rulemaking proceeding about
the eye care industry in the 1970's. That proceeding resulted in
the 1978 trade regulation rule against restraints on vision care
advertising.” Another rulemaking proceeding in the 1980's
examined other kinds of restraints on the business practices of
eye care professionals. The Commission concluded that

5(...continued)
Chiropractic Examiners, C-3379 (order modified April 21, 1992, 57
Fed. Reg. 20279 (May 12, 1992)).

4 See, e.g., Comments to New Jersey Senate (May 14, 1987)
(contact lens fitting by opticians); New Jersey General Assembly
(April 11, 1991) (dispensing and sale of prescription drugs by
physicians); South Carolina Legislative Audit Council (February
26, 1992) (Boards of Pharmacy, Medical Examiners, Veterinary
Medical Examiners, Nursing, and Chiropractic Examiners); Texas
Sunset Advisory Commission (August 14, 1992) (Boards of
Optometry, Dentistry, Medicine, Veterinary Medical Examiners,
and Pharmacy); see also testimony before the Committee on
Business Legislation, Maine House of Representatives (January 8,
1992) (optometry).

5 Advertising of Ophthalmic Goods and Services, 16 CFR Part
456 ("Eyeglasses Rule"). The Commission found that prohibiting
nondeceptive advertising by vision care providers and failing to
release eyeglass lens prescriptions to the customer were unfair
acts or practices in violation of Section 5 of the Federal Trade
Commission Act. The Eyeglasses Rule prohibited bans on
nondeceptive advertising and required vision care providers to
furnish copies of prescriptions to consumers after eye
examinations. On appeal, the Eyeglasses Rule's prescription
release requirement was upheld but the advertising portions were
remanded for further consideration in light of the Supreme Court
decision in Bates v. State Bar of Arizona, 433 U.S. 350 (1977)
(finding state supreme court rules against attorney advertising
violated the First Amendment). American Optometric Association
ve FIC, 626 F.2d 896 (D.C. Cir. 1980). Rather than reinstate the
advertising portions of the Eyeglasses Rule, the Commission has
addressed advertising restrictions through administrative
litigation. See, e.g., Massachusetts Bd. of Optometry, 110
F.T.C. 549 (1988).