STATE RESTRICTIONS ON VISION CARE PROVIDERS: 

EFFECTS ON CONSUMERS 

("EYEGLASSES II") 

Report of the Staff 

to the Federal Trade Commission 

BUREAU OF CONSUMER PROTECTION 
LIBRARY 
I 

LSTATE RESTRICTIONS ON VISION CARE PROVIDERS 

THE EFFECTS ON CONSUMERSi 

( "EYEGLASSES II" ) 

Report of the Staff 

to the Federal Trade Commission 

FEB 1 8 198 1 

by 

Gary Hailey 

Christine Latsey 

Scott P. Klurfeld 

Elizabeth R. Hilder 

Erica L. Summers 

Renate Kinscheck 

Terry S. Latanich 
+~1)l-1-1C?'1 .nc,u~r 

tqio 

c,1 
ACKNOWLEDGEMENTS 

The staff wishes to acknowledge the valuable assistance 

provided to it by the following individuals: 

Dianne Dusman, Jill Siegel, Gail Jensen, and Mark Baribeau 

performed a variety of tasks, including research, editing and 

proofreading, with speed and diligence. 

Duane Fink, Bonnie Linn, and Elaine Lucas typed the report, 

patiently accepting the thousands of changes and revisions 

requested by the staff between first draft and final product. 

Finally, several members of the Bureau of Economics (particularly Ronald Bond and John Phelan) answered in terms that 

lawyers could understand many questions on economic and statistical topics. 

i 
PREFACE 

In this Staff Report to the Federal Trade Commission, the 

Bureau of Consumer Protection recommends that the Commission 

publish for comment an Advance Notice of Proposed Rulemaking 

I' concerning private and public restrictions which affect providers 

and consumers of ophthalmic goods and services. 

By making this Staff Report public at this time, the Commission hopes to provide information about those restrictions 

to the public and to focus current debate about their effects. 

However, nothing in the Report is intended to limit the form or 

substance of public comment on the proposed rule. 

The Commission has not adopted any of the findings or conclusions presented in this Report. 

! 

ii 
Tab l e of Co n tents 

PAGE 

Introduction . Viii 

I. COMMERCIAL PRACTICE • .••. . 1 

A. Introduction •••• . . . . . . . . . . . . . 1 

B. Industry Background . 3 

c . Analysis of State Laws 9 

1. Restrictions on the Employment of Optometrists 

and Opticians by Commercial Firms and Lay 

Individuals. • . . • . . . . • . . . . • . • . . 10 

(a) Employment of Optometrists . . . . . 12 

(b) Employment of Opticians . . . . . . 16 

2. Restrictions on the Permissible Location of 

Optometric and Optician Practices. .. .. ... 18 

3. State Restrictions on the Number of Branch 

Offices an Eye Care Practitioner May Operate 21 

4 . Restrictions on the Ability of Optometrists and 

Opticians to Practice Under a Trade Name . . 23 

D. Proffered Justifications for Commercial Practice 

Re s tr a int s . . . . . . . . . • • • . 29 

1. Introduction 29 

2. Restrictions on Commercial Practice are Necessary 

to Maintain the Quality of Vision Care . . 29 

3 . Trade Name Bans are Necessary to Prevent 

Deception.....•..... .••.•.. 39 

E. The Effects of Commer c ial Practice Restraints on 

Consumers. • . • 43 

1. Introduction ..... 44 

2 . Preliminary Evidence 46 

3. The Bureau of Economic Study • • • • . •.. 49 

4 . Do Commercial Practice Restrictions Affect 

Accessibility of Care? 84 

F. Conclusion .••.• 86 

II. RESTRICTIONS ON THE DUPLICATION OF LENSES BY OPTICI ANS . 93 

A. Introduction 93 

B. What is Lens Duplication? . 94 

C. Analysis of State Laws . • 97 

iii 
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PAGE 

D. The Dupl ica t 1On Market -- f-lh y Do Consumers Se ek 

Out Duplication Services?. . . . 101 

E. The Duplication Study. . . . . . . 110 

F • Results of the Study . . . . . . . 115 

G. Repeated Examination v . Duplication -- A Comparison 

of Variation . • • • . . . . ... 123 

H • Recomme ndations .. 131 

I I I. Rf:.S'rRIC·rroNS ON THE OVER-T HE;-COUN'ft::R SALE OF REJ\DY-TO-WEAR 

Rf:.ADING GLASSES. • • • • • • • • • • • • • • 138 

A. Introduction . . 138 

B . Industry Profile . 139 

C. Analysis of State Laws 140 

o. Effects on Consumers . 142 

l:. • Justifications for Restrictive State Laws. 145 

F. Concl usion . • 146 

IV . CONTACT LENS FITTING BY OPTICIANS . .. 148 

A. Introduction . . 148 

B. Industry Profile 152 

C. Analysis of State Laws 154 

D. Justification for Hestrictions on Contact Lens 

Fi tting by Optic i ans •••••. . ••••.• . . . 159 

E. Effects of Public Regulation of Contact Lens 

Fitters and Dispensers • ..•. . ..... 16 0 

F. The Contact Lens Wearer Study. 162 

G. Effects of Private Regulation of Replacement or 

Duplicate Contact Lens Dispensing •.•..•. 167 

H. Recommendations Concerning Replacement Contact 

Lenses •••••....• 174 

iv 
PA.GE 

I. Reasons for Severin9 Certain Issues from Rule.making 

Proceeding . • . • • • . • . . . . . • . . . • . 177 

J. Conclusion 181

K. Contact Lens Wearer Study Forms .. 182 

v.. LEGAL ISSUES . . 193 

A. Legal Basis for the Proposed Rule .•. 193 

1. Introduction •••.•....•. • . • .... 193: 

2. Consumer Injury ..•.•.•.... . . 19 7' 

(a) Commercial Practice Restrictions ..... . 198: 

(b) Duplication of Lenses .....• . .•.•• 201. 

(c) Replacement Contact Lenses . ..• ••. 202 

3 . Public Policy. • • • . . . . . • . . ..• 2041 

(a) Cost Control •• ...•..... 20 :, 

(b) Access to Health Care. . . . .••• 20B 

( c) The Free Market. . . • . • 211 

4. Conclusion • •............ • .. 213 

B. Remedial Considerations •• 2141 

1. Introduction • . . . . . . • • . . . • . • . . . 214 

2. Preemption • . . . . . . • • . . . • • . . . 21:i 

3. The Fitting of Contact Lenses by Opticians . 220 

4. Corporate Employment of Optometrists • • • . 223 

5. Is the Supreme Court's Decision in Friedman v. 

Rogers a Bar to Commission Preemption of Trade 

Name Bans? • • . . . . . • • • . • . . • • • • • 2 2 ~i 

(a) Introduction. • . • • • • • . • • . • • • • 225 

( b) The First Amendment Analysis in Friedman. • 2 2B 

(c) Unfairness Analysis under Section 5 of the 

FTC Act • . • • • • . . • . • • . • • • 232 

(d) The Significance of Spiegel . . . . 236 

6. Conclusion . • • • • . • • . . • . . • . 238 

VI. PROPOSED MODIFICATIONS OF THE EYGLASSES I RULE • 241 

A. Introduction .•. 241 

B. Modifications Necessitated by Eyeglasses II •. 243 

C. Other Modifications. 247 

VII. THE PROPOSED RULE. 251 

VIII . SECTION-BY-SECTION ANALYSIS OF THE PROPOSED RULE 25B 

Appendix ••••• 2 7 JL 

V 
vi 
July 3, 1980 

Division of Professional Services 

Bureau of Consumer Protection 

Eyeglasses II Investigation -- Staff Recommendation 

that Commission Propose a Trade Regulation Rule 

Commission 

INTRODUCTION 

In this report, we recommend that the Commission propose amendments to the Eyegrlasses I Rule and new trade regulation 

rule provisions under the authority of Section 18 of the FTC 

Act to subject to scrutiny some, but not all, of the issues 

raised in our Eyeglasses II in~estigation. 

The restrictions at issue in Eyeglasses II fall into two 

distinct categories: (1) form of practice restrictions, and 

(2) scope of practice r estricti ons. In the first category, 

we are examining restrictions imposed primarily on optometrists 

and opticians which limit the ability of those professionals 

to work for "for-profit" corporations, restrict the number 

of offices which they may operate, limit the locations at wh i ch 

they may practice (~, proscribe the location of an optometr i c 

practice in a mercantile establishment or a shopping center), 

or prohibit the use of a trade name. This first category of 

restrictions, which we will t erm restrictions on "commercial 

practice," are intended primarily to restrict the growth of 

high-volume, "chain" vision care outlets. For the reasons discussed in this report, we rec_ommend that the Commiss ion propose 

a trade regulation rule which would remove total bans on commercial 

vii 
ophthalmic practice. 

In the second category, scope of practice limitations, 

we have focused on two restrictions . First, we have conducted 

an inquiry into the effect on consumers of state laws which 

restrict the fitting of contact lenses to ophthalmologists and 

optometrists, excluding opticians from that market. We have 

worked closely with representatives of those three groups to 

design and administer a study of patients to arrive at comparative measures of cost and quality of care delivered by members 

of those groups . 

For the reasons discussed later in our report, we do not 

recommend t~at the Commission propose a trade regulation rule 

preempting state laws on the fitting of contact lenses . Our 

study data show that existing entry requirements for contact 

lens fitters may exclude many competent providers and force 

consumers to spend more than necessary to obtain quality contact 

lens care . Our recommendation not to include this issue within 

the rulemaking is founded in our concern that effective Commission action would raise serious questions of federal-state 

relations, and would encounter severe remedial difficulties . 

It is our recommendation that the Commission continue its work 

in this area with the goal of developing a report and model 

law for submission to tbe states for their consideration. 

The second group of scope of practice restrictions we have 

investigated are state-imposed restrictions on the duplication 

of lenses by opticians. A number of states make it illegal 

for an optician to duplicate an existing pair of eyeglasses 

viii 
without having a signed prescription from an optometrist 

or ophthalmologist. If a consumer cannot have a broken lens 

replaced or a duplicate pair of eyeglasses prepared from 

an existing pair, he or she may be forced to undergo a potentially 

unnecessary eye examination. 

We have conducted a survey to measure the adequacy of 

duplication by opticians in states where they are permitted to 

perform that task. We recommend that the Commission include 

this issue within the proposed rulemaking. Although this 

issue involves a state scope of practice determination, the 

course we recommend to the Commission would not involve a 

preempti on of state laws. Rather, our recommendation would 

s i mply modify the current prescription release requirement of 

the Eyeglasses I Rule s o that consumers could obtain replacement eyeglass lenses by presenting their original lens specifications. Such a rule would eff ectively eliminate the poss i bility of duplication error, yet would allow the states to 

place an expiration date on the prescription to control the 

length of time during which duplications may be obtained. 

Our recommendation would mitigate the current consumer loss 

wi thout preempting state laws and would elevate the level 

of eyeglass quality currently received by consumers who desire 

duplicate or replaceme nt eyeglasses which contain the visual 

correction present in their ex isting eyeglasses . 

The Eyeglasses II investigation was authorized by the Commission on January 19, 1975 . The original Commission authorizat i on grew out of the Eyeglasses I investigation, which culminated 

ix 
when the Commission adopted the first final Magnuson- Moss Trade 

Regulation Rule on The Advertising of Ophthalmic Goods and Services (16 C.F.R. Part 456). When we recommended that the Commission propose the Eyeglasses I Rule, we recommended that other 

restr i ctions in the ophthalmic ma r ket which appeared to increase 

consumer costs for vision care and to decrease consumption of those 

goods and services , but which did not offer consumers commensurate 

benefits in terms of increased quality or protection , be investigated. The Eyeglasses II investigation did not begin in earnest 

Until the conclusion of the Eyeglasses I proceeding, because 

the s taff members assigned to Eyeglasses II were also responsible 

for conducting that proceeding. 

The Eyeglasses II investigation is best described as one 

of the Commission ' s "second-generation" rulemaking proceedings. 

In the months fo l lowing adoption of the Magnuson- Moss Act , the 

Commission proposed numerous trade regulation rules. In the 

years which followed, the Bureau of Consumer Protection underwent a transition from being primarily litigation-or iented to 

being primarily rulemaking-oriented. As evidenced by the report 

of the Administrative Conference of the United States, as well 

as the Commission ' s response to that report, we have learned 

a considerable amount about how to conduct a rulemaking proceeding . 

The Eyeg l asses II i nvestigation has made extensive use of 

market studies not only t o measure the pr evalence and economic 

impact of the practices under investigation, but also to test 

and measure the efficacy of the remedial alternatives being considered. In the sections of this report which follow, we will 

X 
detail the survey research which we conducted. It is important 

to note that in our efforts to conduct good research we have 

enjoyed the support and cooperation of the professional groups 

whose members would be most affected by Commission action. The 

American Academy of Ophthalmology, the American Association of 

Ophthalmology, the American Optometric Association, the Opticians 

Association of America, the National Association of Optometrists 

and Opticians, and other groups have provided us with expert 

advice and technical support in designing and administering our 

studies and surveys. Without this coopera tion, it would have 

been much more difficult to conduct these studies. Even more 

importantly, the dialogue which occurred between the Commission's 

staff and these professional groups has, we hope, demonstrated 

the objective nature of our inquiry and mitigated the adversarial 

atmosphere which inev itably surrounds investigations of this 

importance. 

Quality of Care -- The Commission's Role 

In each of the sections of this report detailing the specific 

questions under investigation, we respond in detail to the socalled "quality of care" defense. We believe that it is necessary 

to provide the Commission with a broader perspective on this 

issue because it is a potentially volatile issue which will 

be present in virtually all of the Commission's activities 

affecting the delivery of health care. 

In the Occupational DE!regulation Program and other health 

care matters currently being considered within the Bur eau of 

Consumer Protection, it is invariably asserted by defenders 

Xl 
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of the status~ that prevailing restrictions are necessary 

to maintain and protect the quality of care aelivered. In some 

instances , restrictive regulations may maint ain or elevate the 

quality of care. In other cases , the quality defense is little 

more than a public relations technique employed by a profession 

to fend off gove r nmental or public scru t iny of anticompeti t ive 

or anti-consumer conduct which results in consumer injury. 

We believe that the Commission must be willing to give the staff 

the time and r esources necessary to study and assess the quality 

of care defense to determine whether restrictive private conduct 

or state laws which seemingly cause economic injury to consumers 

are actually necessary to protect the public health, safety 

and welfare. 

I n considering the quality of care issue, we believe that 

the Commission (or any other decisionmaking body) must be careful to examine all aspects of the quality issue, not only the 

level of care received by those who can afford it. The critical 

inquiry is that of "aggregate " quality, not "delivered" quali t y . 

In examining restrictions on how and by whom professional services are delivered , we must be careful not to focus solely on 

those members of society who actua l ly obtain care. The effects 

of unnecessarily restrictive regulati ons may be to make care 

less accessible , or less frequently accessible to some segments 

of our society. Thus , it is imperative that we also consider 

the "no-care " component of quality. Difficult questions will 

inevitably arise as to whether the level of car e available should 

be maintained at a specified level through restrictive regulation 

xii 
even if the result is to deny any care at all to some members 

oJE society because of the costs imposed by that regulation. 

It is our belief that before a decision of that magnitude can 

be made, we must provide the Commission with the best available 

evidence addressing the extent and magnitude of the cost/quality 

trade-off. We have tried to produce such evidence in this proceeding. 

The difficulty, however, is that the evidence produced 

on the cost and quality issues will seldom, if ever, result 

in a clear-cut outcome. The decisions will be difficult ones 

because they may involve trade-offs between cost and quality. 

We recognize that while the Commission may at some point be 

faced with a situation where the removal of restrictions on 

how and by whom professional services are delivered could result 

in such a trade-off (i.e., removal would alleviate the "no care" 

problem but would also lower the overall quality of care delivered), 

the evidence shows that this is not an issue in Eyeglasses II. 

We believe that the validity of a quality defense often 

cannot be determined without conducting a thorough investigation. In some cases we may find that the conduct being 

investigated is justified to protect the public health and 

welfare. Should our investigation demonstrate that particular forms of regulation are indeed appropriate and protect the public with a minimum of economic costs being imposed, 

we will have accomplished an important obje ctive. By gathering 

reliable data with respect to alternative providers and forms 

of practice, we will have made a significant contribution to 

health care decisionmaking. 

xiii 
The Staff Report 

In the past, there has been criticism of staff reports 

recommending proposed Magnuson-Moss trade regulation rules. 

Within the Commission there has been concern that the Staff 

Reports were unnecessarily lengthy , and may have become too 

advocative. Outside the Commission , staff reports have been 

criticized as conclusory and have been put forth as proof that 

the staff had prejudged the issues under considerati on . Cognizant of these criticisms , we have attempted to present the 

results of our investigation concisely , and to present the facts 

in a balanced fashion. 

ln addition , we have made a deliberate effort to min i mize 

the length of our report . We were ab l e to shorten our report 

to some extent because we chose not to repeat information contained in the final Eyeglasses I Staff Report . Thus , we have 

not included within this report detailed background on the industry 

and the consumer market , except to the extent that it is necessary 

to understand the market and how it varies with respect to the 

restrictive state laws under investigation . 

Access to the Record 

Brief mention should be made of how members of the public 

may review the evidence cited in the staff report. First , 

references to documents contained in the Eyeglasses I record 

include the author, title, publication information , public recor d 

exhibit number (.£.:..9_., "Exhibit III-1 " ) and the record page number 

within the e xhibit which supports the text (~. , "at R.12345"} . 

Citations to the Eyeglasses I Final Staff Report and Presiding 

xiv 
Officer's Report also have the actual page numbers from the 

report noted in parentheses (~., "(p.120)") . Citations to witness' testimony at the public hearings in the Eyeglasses I proceeding include the name and affiliation of the witness, the 

transcript page at which his or her testimony begins, and the 

spi?cific transcript page which supports the text (~., "Tr . 2000 

at 2020"). References to hearing exhibits from the Eyeglasses 

I proceeding are identified as HX ; record page numbers are 

not included because the hearing exhibits are not paginated. 

Documents cited in this report which are not on the record 

include all of the relevant bibliographical information, and 

citation to the document page number. Copies of the Bureau of 

Consumer Protection's study on the duplication of lenses without a prescription (entitled ''A Comparison of a Random Sample 

of Eyeglasses"), the Eyeglasses I Staff Report (entitled 

"Staff Report on Advertising of Ophthalmic Goods and Services 

and Proposed Trade Regulation Rule (16 CFR Part 456)"), and 

the Bureau of Economics study on commercial practice (entitled 

"Staff Report on Effects of Restrictions on Advertising and 

Commercial Practice in the Professions: The Case of Optometry") 

which are discussed in this report may be obtained from: Public 

Reference Room (Room 130), Federal Trade Commission, 6th and 

Pennsylvania Ave., N.W., Washington, DC 20580, telephone (202) 

523-3467. 

Rulemaking Procedures 

Several Magnuson-Moss rules proposed by the Commission in 

xv 
the recent past {namely, Children's Advertising,! R-Value,2 

and Standards and Certification3 have employed modified versions 

of the rulernaking procedures specified in Section 1.13 of the 

Commission's Rules of Practice. We believe that the procedures 

to be followed in this proceeding, should the Commission choose 

to follow our recommendation and propose a rule, are of critical 

importance. 

We do not favor the use of the bifurcated hearing procedure 

employed in the Children ' s Advertising Rule for this proceeding. 

In the Eyeglasses II proceeding , the critical evidence consists 

of market studies measuring the cost and quality of care provided 

in differing modes of practice and from different kinds of health 

care providers. Consistent with our investigatory efforts, 

we be l ieve that it is critical that both consumer and industry 

representatives be given the opportunity to cross-examine in 

detail the studies which are the foundation of our investigation. Industry groups bring to a rulemaking proceeding considerable sophistication in the operation of their industries, in 

this case both on economic and quality of care issues . We believe 

the quality of the record ultimately presented to the Commission 

l Childr en ' s Advertising, Proposed Trade Regulation Rulemaking 

and Public Hearing, 43 Fed. Reg. 17 , 967 (1978). 

2 Trade Regulation Rule on Labeling and Advertising of Home 

Insulation, 16 C.F.R. Part 460; Statement of Basis and Purpose, 44 Fed. Reg. 50,218 (1979); Home Insulation, Proposed 

Trade Regulation Rule, 42 Fed. Reg. 59,678 (1977). 

3 Standards and Certification, Proposed Trade Regulation 

Rule, 43 Fed. Reg. 57,269 (1978). 

xvi 
would suffer if the industry groups were not permitted to conduct 

their own cross- examination. 

Similarly, we believe that the staff must be able to crossexamine surveys and stud i es submitted by other groups during 

the course of the rulemaking proceeding. During the course of 

o ur investigation we have gained substantial e xperience in conducting survey r esearch on t he issues i n this matter, which 

a presiding officer cannot bring to the proceeding. We cannot 

overemphasize our belief that limi ting the ability of the industry 

and the staff to cross-examine studies which form the foundation 

of a good rulemaking record will ultima t ely weaken the r ecord 

presented to t he Commission and lessen the credibility of the 

proceeding. 

Based on t he experience of the staff assigned to this proceed ing in conducting the first two final Magnuson- Moss Rules 

(Vocat ional Schools and Eyeglasses I) , we believe that the delay 

factor attributed to cross-examination is grossly oversta t ed . 

In Eyeglasses I, for exampl e , the entire public hearing phase 

of the proceeding was comp l e t ed in three months, notwithstanding 

the fact that we held hearings in five differ ent cities . I n 

the Advance Notice of Proposed Rulemak ing we have described 

the different hea ring procedures which could be used if the 

Commission proposes a rul e in Eyeglasses II and have asked for 

comment o n which format shou ld be followed in this proceeding. 

We r ecommend that the Commission convene onl y two public 

hearings: the first in Washington , o. c ., to permit us to present 

xvii 
our studies and subject our consultants and survey designers 

to cross-examination, and the second in a western city, either 

Los Angeles or Denver. This geographic split will facilitate 

public involvement in the hearing process, while minimizing 

the unnecessarily repetitive aspect of numerous public hearing 

sites. We project three weeks of public hearings in each site, 

with the entire public hearing process being completed in two 

months; that is, three weeks of hearings, three weeks off between 

sites, and then the final three weeks of public hearings . 

Finally, we recommend that the Commission employ a onenotice concept in this proceeding . The Commission has developed 

some expertise in the ophthalmic market through its involvement 

in Eyeglasses I. Through the extensive dialogue which has taken 

place between the staff and industry groups, the process of 

issue identification has been essentially completed . Thus, 

we recommend that the Commission issue a single notice of proposed 

rulemaking, designating the issues which will serve as the focus 

of the proceeding, setting forth the hearing sites and times, 

as well as the procedures for submitting materials to the rulemaking record. 

xviii 
Wit,b "the exception of the aforeme.nti.on~.d modifications; 

W'e recommend t;hat the Col)imission adhe1:'::e t'o the basic 1.13 proc;;.edares 

fo.r Mag·nusou-Moss riHemaking ~ 

Al?Pi:OVED: RESPEC:TF.OLLY $t1B~ltT-TED:· 

,. 

.Mich.aeT c; Mc·~.arey., Ass·1st;#it GacI D. Ifiiley Director for Pt:ofes~:rionar Se·rvice-s 

.Bureau ·ot: Con$qmet :Pt."ot.ec-tion 

.Ctirlst-ine Lat.sey 

E-ric a L. Summers 

/ 

.Renate: Kinschec.k 

-TerrytlL t .atanich 

xix 

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I. Commercial Practice 

A. Introduction 

As par t of the Eyeglasses II investigation, we examined 

restrictions on the practice of optometry and opticianry in 

commercial settings. This aspect of our investigation deals 

with structural restraints in the retail ophthalmic industry 

which restrict the permissible modes of commercial practice. 

We have focused on four major restrictions which limit the form 

and location of practice within the ophthalmic professions: 

(1) restrictions on the employment of a licensed professional 

by an unlicensed person or non-professional corporation; (2) 

restrictions on the location of a p r actice in a mercantile or 

commercial setting; ( 3) restrictions on t he number of branch 

office s which an individual practitioner or firm may operate; 

and (4) restrictions on the right of a practitioner or corporation to practice under a trade name. 

In the Eyeglasses I rulemaking proceeding, we found that 

advertising prohibitions were only part of a comprehensive network 

of public and private restrictions regulating the form and mode 

of practice in the ophthalmic professions. Evidence from that 

proceeding l ed both the staff and the presiding officer to conclude that re strictions on the permissible form and location of 

practice may limit competition, increase the cost and de c rease 

1 the availability of vision care. Some witnesses testified 

Bureau of Consumer Protection, Federal Trade Commission 

Staff Report on Advertising of Ophthalmic Goods and Ser­

(Footnote Continued) 

1 

1 
that co nsumers would not receive the full benefits fr.om the 

removal of restrictions on advertising unless these business 

practice restraints were removed as well .2 

States have argued that restrictions on commercial practice are necessary to protect the public health and safety by 

ensuring the quality of vision care. The principal questions 

we will address in our discussion, therefore, are how these 

restrictions affect the price, quality and accessibility of 

vision care. In our investigation we sought to determine not 

only whether higher prices and lower accessibility are attril (Footnote Continued) 

vices and Proposed Trade Regulation Rule, Exhibit XIII- 2 at R. 24492 (p. 120) (May 1977) [hereinafter cited as 

Staff Report] ; Report of the Presiding Officer on Proposed 

Trade Regulation Rule Regarding Advertising of Ophthal- mic Goods and Services, XIII-1 atR. 24235-36 (pp. 61-62) 

(December 10, 1976) [hereinafter cited as Presiding Officer ' s 

Report). 

2 It has been argued that high- volume practices which 

are limi ted or entirely prohibited by commercial practice 

restrictions are the ones most likely to take advantage 

of the opportunity to advertise. High- volume retail optical 

firms, capitalizing on economies of scale in both purchasing 

and distribution of ophthalmic goods, may be able to pass 

these savings on to the consumer in the form of lower 

prices. Thus, if advertising is permitted but the restrictions on form and location of practices exist, then these 

economies of scale may be lost. See,~, Testimony 

of R. Burr Porter, Ph.D., on behalf of National Associa­ t ion of Optometrists and Opticians [hereinafter cited NAOO), 

Tr. 6264(e) and (v); Testimony of Kenneth R. Davenport, 

President, South Carolina Association of Opticians , Tr 6207; 

Comment of J.A. Miller, Executive Director of Opticians 

Association of America , R. 17377 [he reinafter. cited as 

OAA]; Presiding Officer ' s Report supra note 1, at R. 24244 

(p. 50) (lower prices may not come about in the face of 

these other serious limiting factors). 

2 
butable to these restraints, but also whether there are any 

offsetting consumer benefits which result from thes e restrictions, 

a thorough general description of the re tail optical industry. 

with special attention being given to assessing their impact 

on the quality of 3 care. 

B. Industry Background 

The Eyeglasses I Staff Report provided the Commission with 

4 

We will not repeat the discussion in this report, except to 

update the relevant statistics on sales and market shares of 

the competing segments of the market . In addition, we will 

discuss the market trends in the area of commercial practice. 

Commercial practice in the r e tail optical industry is 

generally understood to refer to large-scale, high-vol ume 

practitioners who make heavy use of advertising and locate in 

easily accessible high consumer-traffic locations . While commercialists have long existed in the vision care market, the 

application of modern marketing concepts to this field has 

resulted in a rapidly growin9 group of competitors. 

3 Price and quality comparisons will be made between t h e 

''commercial" and the "professional" providers in the industry . Commercial practice refers to the high-volume practitioner who is often empl oyed by a non-professional or "lay" 

corporation and usually located in a shopping center, department store or other typei of commercial bui1

lding. "Noncommercial" or "professional" optometrists or opticians 

are usually those who practice as solo practi tioners or 

in small group practices. The term "p rofessional " as used 

in this context in no way refers to the ethics, integrity 

or competency of the practitioner. 

4 Staff Report, supra note 1, at R. 24195-24205 (pp. 11-31) . 

3 
There are two basic types of commercial optical centers. 

Some, known as ''full service" outlets, employ one or more 

optometrists to provide eye examinations, and one or more dispensing opticians to fit and sell eyeglasses. Customers can 

thereby have their eyes examined and their prescriptions filled 

at the same location. Some stores, because of state law limitations, may employ only opticians, who fill prescriptions which 

have been brought from ophthalmologists or optometrists who 

practice elsewhere. 

A variety of forms of commercial optometric practice have 

evolved in response to state law restrictions. One is the straight 

optical chain in which a retailer, often a corporation, employs 

optometrists at a number of stores. A second type is the l eased 

department. Where corporate employment of optometrists is prohibited, optical retailers may lease space to optometrists, 

thus enhancing the convenience of an optical dispensary at the 

same location. Some states ban both corporate employment and 

lease arrangements, and this produces a th i rd type of practice, 

the side-by-side operation . In this form, an optometric practice 

is located next to an optical dispensary , thus permitting referrals 

from one office to another. 

In 1977, there were approximately 20,000 optometrists5 and 

Bureau of Health Manpower, U.S. Dep ' t of Health, Education and Welfare, Supply of Optometrists in the United 

States at Table 3 (1978) [hereinafter cited as DHEW, 

Supply of Optometrists] . 

4 

5 
12,000 opticians6 in active practice. No estimates are available 

on how many of those might be classified as commercial practitioners. It is c l ear that the vast major i ty of optometrists 

are "non-commerc i a l'' or professional practitione rs. Most are 

solo practitioners, although incr easing numbers ar e turning 

to partnership or group practice. 7 

Although most optometr ists are self-employe d, there has 

been an increase in the proportion of optometrists under salaried 

employment. 8 Many of those ar e employed either by other optome ­

9 trists or in the military . 1975 figures indicate that about 

3% of the full-time optometr ists in active practice in 1975 

were employed by large optical chains, department stores, or 

10 independent opti cians. Howeve r, there i s strong reason to 

believe that th i s figure understates the actual numbe r of commercially e mployed optometrists. 11 

6 U.S. Dep ' t of Health, Edu cation and Welfare, Health, 

United States, 1976-1977 Table 112 (1977). 

7 DHEW, Supply of Optome trists , supra note 5 at 2. 

8 U.S. Dep 't of Health, Edu cation and We lfar e, A Report to 

the President and Congress on the Status of Health Profe ssions Personnel in the United States, VI-~ (1978). 

9 Id. Generally, newly graduated optometrists are more likely 

to be salari ed employees than l o nger practicing optometrists. 

Id. 

10 Gordon R. Trapnell Consulting Actuaries , The Impact of 

National Health Insurance on the Use and Spending for 

Sight Correction Services, (January 1976), Exhibit II-68 

at R.1967. 

11 The Trapnell report, supra note 10, used manpower data 

gathe red by the American Optometric Association in 1973. 

( Footnote Continued) 

5 
--

About 70% of opticians active in 1969 were employed in 

" inaependent " retail optical establishments. 12 At that time, 

approximately 9% of all active opticians wer e employed by 

optometrists , ophthalmologists or other physicians, and between 

3 % and 4 % were employed in department store optical departments.13 

In view of the dramatic growth during the past ten years in 

drug and department store optical establishments, the current 

distribution of opticians may be very different from the 1969 

figures. 

I ndustry observers estimate that consumers spent approximately three billion dollars on ophthalmic goods in 1978, and 

an additional one billion dollars for eye examinations.1 4 Chain 

11 (Foo tnote Continued) 

In arriving at estimates for 1975, Trapnell used a straight 

growth rate of 2% per year. However , it is likely that 

the proportion of commercially employed optometrists has 

grown since 1973, since there has been a tremendous expansion 

in commercial practice in the past few years. Searle, the 

largest commercial retailer, did not enter the market until 

1974. Thus , we doubt that Trapnell ' s estimates reflect 

the current situation. 

12 U.S. Dep ' t of Health, Education and Welfare, Health Resources 

Statistics, Table 126 at p. 190 (1976 - 1977). 

13 Id. 

14 Telephone interview with Edward A. Porter, Group Counsel, 

Opticks , Inc., by Gary D. Hailey , FTC Staff (April 3 , 1979), [hereinafter cited as Porter Interview]. These are 

generally the amounts that are quoted in discussions of the 

retail ophthalmic market. ~' ~, "G.D. Searle Trying 

Once Again for the Right Acquisition Mix ," Business Week, 

Mar. 19, 1979, at 150 (2.7 billion dollars for eyeglasses 

and contact lenses); "Drugstores See Boom in Eyeglasses," 

Business Week , Feb . 13, 1978 , at 116 (3 billion). Statis­ tics on the retail ophthalmic market are not readily avail- (Footnote Continued) 

6 
optical stores held 12-15% of the market for retail eyewea r; 

drug chain and department stores accounted for about 3%.15 

The largest retailer of ophthalmic goods is G.D. Searle & 

Company. Searle entered the market in 1974 and, by the end 

of 1978, had over 400 outlets in 28 states. Operating under 

the trade name of Pearle Vision Centers in most areas, and Hillman 

Kohan Vision Centers in New York and New Jersey, these stores 

had sales of 91 million dollars in 1978. 16 Searle is currently 

experimenting with specialized con tact lens outlets. 

The second largest optical retailer is Cole National Corporation which entered the market in the mid-1960 ' s. Cole National 

operates optical departments in l e ased space in Sears, Roebuck 

& Company and Montgomery Ward stores. In 1977, Cole operated 

373 optical departments and had over 54 million dollars in total 

sales.17 Cole National cur rently operates over 420 retail outlets 

14 (Footnote Continued) 

able. Published government data are not very useful because 

ophthalmic goods are incl uded within the broader category of 

"Eyeglasses and Other Appliances.'' In our Staff Report on 

Eyeglasses I we quoted figures cited in Gordon Trapnell's 

report, supra note 10, which estimated, based on adjustments 

to U.S. government statistics, that expenditures for eye 

examinations in 19 75 were 1.1 billion dollars. Because 

of uncertainty about the government statistics, we have 

chosen in this report to use industry figures. 

15 Porter Interview, supra note 14. 

16 G.D. Searle & Co. , 1978 Annual Report at 16. 

17 Cole National Corporation , 1977 Annual Report at 9. 

7 
in department stores in 36 states.18 

Drug chains began to become a significant factor in the 

retail optical market in 1973. By 1977 , there were over 200 

outlets operated by about 20 drug chains. 19 A 1979 report on 

drug chain dispensing indicated there are at least 30 drug 

chains with some form of optical department. 20 These optical 

centers employ one or more dispensing opticians, but at this 

time generally do not offer eye examination services.21 

The growth of commercial chains in optical retailing has 

affected other segments of the industry as well . Many of the 

large retailers have opened their own wholesale optical laboratories. In 1977, Cole National operated seven labs which processed only prescriptions from Cole optical departments. 22 

At least 20 of the 30 dispensing drug chains report using t heir 

own labs. 23 

While there has been dramatic growth during the last 10 

years in optical retailing , the impact of these changes on 

18 "OMA Spotlights Stiff Challenges Ahead for Industry and 

Di spensing Professions 11 20/20, Jan./Feb. 1980, at 72. 

19 11 "Optical Departments Facing Some Problems , American Druggis t , 

Aug. 1977 , at 38. 

20 " Update on Chain Optical Dispensing , Part 2" Optometri c 

Monthly, Feb. 1979, at 44 [hereinafter cited as Optometric 

Monthly]. 

21 Id. at 45. 

22 Cole National Coporation, 1977 Annual Report at 9. 

23 Optometric Monthly, supra note 20, at 44. 

8 
-

independent dispensers and solo practicing optometrists is not 

precisely known. One industry observer estimated that among dispensing opticians, the market share of the so-called "independent " 

optician dropped from 86% in 1973 to 60% in 1978. 24 A 1979 

industry survey of 2,000 consumers indicated that, in 1978, 

local optometrists lost in sales of eyeglasses to chain optical 

shops, but that local independent opticians h eld their sales 

level. 25 

C. Analysis of State Laws 

The goal of restraints on commercial practice generally 

is the e limination of the chain or vo l ume practice. 26 The primary justification offered for these restraints is that volume 

practice and the intervention of unlicensed personnel into the 

27 delivery process lower the quality of care. 

There are various means of achieving this goal, and each 

is discussed separately below. However, all of these restrictions are simply different routes to the same end. Although , 

the imposition of one type of commercial practice restriction 

may in some instances be enough to achieve the desired effect 

24 "Drugstores See a Boom in Eyeglasses," Business Week, 

Feb. 13, 1978, at 116. 

25 Ettore, Fashion Fuels in the Eyeglass Business, New York 

Times, July 25, 1979, § D, at 1, col. 4. 

26 See Summary of Comments by State and Local Governmental Officials on Notice of Staf.f Intent to Recommended Rulemaking, Appendix A, notes 10 and 11 [hereinafter cited as Summary of Comments]. 

27 Id. at notes 12-17 and notes 20-22. 

9 
of eliminating commercial practice, our analysis of state laws 

indicates that if one type of form of practice restriction is 

imposed, others usually also exist. 

In our discussion of state laws, we focus on those 

restcictions affecting optometrists and opticians. No data 

are given about restrictions affecting ophthalmologists. The 

practice of ophthalmology, a medical specialty, involves functions ana activities beyond the scope of the Eyeglasses II 

investigation. However, to the extent that an ophthalmologist 

limits his or her activities to those which are the subject 

of this investigation, (i.e., diagnostic eye examinations), the 

Commission may wish to cover them in the proposed rule. 

1. Restrictions on the Employment of Optometrists and Opticians 

by Commercial Firms and Lay Individuals. 

Our analysis of state laws indicates that there are 

generally two categories of laws restricting the ability of 

optometrists and opticians to work for an unlicensed person 

or corporation. A substantial number of states make it illegal 

for an optometrist to work for either a " lay" individua128 or 

corporation29 or for an optician. A smaller group of states 

restrict the ability of opticians to work for non-opticians or 

lay corporations in dispensing eyewear. 

28 A "lay individual" as it is usea here means a person who 

is not licensed to practice optometry. 

29 A "lay corporation '' as it is used here (and throughout 

this report) means a nonprofessional or business corporation. 

,.. 

10 
Lay employment restrictions prevent a non-licensed person or firm from owning a share of an optometric or optical 

firm. 30 This type of restriction limits the availability of 

equity or venture capital for optometric and optical practices.31 

Outside capital, which is often necessary to finance the expansion 

32 of a business , can come from two different sources: investors , 

30 "No corporation shall engage in the practice of optometry under any lease, contract 

or other arrangement whereby any person not 

duly authorized to practice optometry, shares 

directly or indirectly, in any fees received 

in connection with said practice of optometry." 

N.H. Rev . Stat. Ann§ 327 : 27. See also Mass. Gen. Laws 

Ann. ch 112 § 72 (West) ; N.C. Gen. Stat.§ 90-125. 

"It shall be unlawful for an.y person to practice 

or offer to practice as a dispensing optician 

as an employee of any person not engaged 

primarily in the practice as dispensing optician 

as a licensee under this chapter, or of any 

firm or corporation not engaged primarily 

in the practice of dispensing opticians under 

the actual and personal supervision of partners, 

officer, manager or stockholders who possess 

valid unrevoked licenses as dispensing opticians 

entitled to practice within the state of 

Tennessee in accordance with the provisions 

of this chapter. " 

Tenn. Code Ann . § 63- 1403 (d). 

31 Equity or venture capital means that t he investor owns 

a share of the business. While a lender is often more 

concerned with repayment of his or her loan , an investor is 

primarily concerned with the business' potential for future 

returns as a result of capital appreciation. Hence , the 

investor may be more willing to take a risk and invest 

a larger sum of money than a lender would be wi l ling to 

lend. ~ , ~ , J. Weston & E . Brigham, Essentials of 

Managerial Finance (4th ed . 1977) . 

32 As mentioned earlier, it is often desirable to expand one ' s 

business in order to achieve the necessary volume of busi- (Footnote Continued) 

11 
who, by investing in the business, become part owners; and lenders. 

If equity capital is not available to optometric and optical 

practices because of state restrictions outlined above, the 

alternative is debt financing which usually occurs through bank 

loans. This is usually a more costly method of financing expansion 

because it involves a loan and may also mean that lesser sums 

will be available for financing than could be obtained through 

equity capital. If it becomes too costly to obtain capital 

because of these restrictions on the use of outside capital, 

the expansion of optometric and optical practices to their most 

efficient volumes may be discouraged. 

a. Employment of Optometrists 

Restrictions on the employment of optometrists by anyone other 

than licensed optometrists or professional corporations controlled 

by optometrists are imposed in a var iety of ways. In twenty-four 

states, t hese restrictions are explicitly imposed by statute. 33 

Generally, these statutes provide that it is unprofessional conduct or 

an illegal practice for an optometrist to accept employment directly 

32 (Footnote Continued) 

ness to receive discount purchases of supplies and otherwise to reduce costs of production and distribution. Such 

efficiencies may then be passed on to the consume r in the 

form of lower prices. 

33 Arkansas, California, Colorado, Connecticut, Delaware, 

Florida, Hawaii, Idaho, Indiana, Kansas, Maine, Massachusetts, 

Montana, Nevada, New Hampshire, New Jersey, North Carolina, 

North Dakota , Oklahoma, Rhode Island, South Dakota, Tennessee, 

Virginia, and West Virginia. 

12 
or indirectly from either a lay individual or non-professional 

corporation, or that it is unlawful for a lay individual or nonprofessional corporation to engage the services of an optometrist 

upon a salary or commission basis.34 

34 "No optometrists shall engage in the practi ce 

of optometry with any organizati on, corporatton, 

group or lay individual. This provision 

shall not prohibit optometrists from employing 

or from forming pactnerships or professional 

associations with optometrists licensed in 

this state." Fla. Stat. Ann. § 463.014 

(c) (West) (1979 Supp). 

"The practice of optometry in a corporate 

capacity is prohibited, but this prohibition 

shall not apply to a professional corporati on 

formed pursuant to this article . . " Co l. 

Rev. Stat. § 12-40-122. 

In enacting these statutory restrictions some states also 

have enac t ed a "grandfather clause " which exemp ts from 

the restrictions those optometrists who are engaged in 

the " unlawful practice'' as of the effective date of the 

statute. For example , the state of Virginia has enacted 

a grandfather c laus e wh ich provides: 

r No registered optometrists shall practice 

optometry as an e mp l oyee, d i rec t ly or indirectly, 

of any commercial or mercanti le establishment nor shall he so advertise himself or 

through such commercial or mercantile establishment, unl ess such commercial or mercantile establishment was employing a full-time 

registered optometrist in its established 

place of business on June twenty-first, ninet een hundred thirty-e i ght. Va. Code§ 5 4-

388(2)(k). 

Interestingly , a circuit court in Vi rginia (S. Galeski 

Optical Co. v. Virginia State Board of Examiners in 

Optometry, et g., Chancery No. G-3602-1) on February 6, 

1980, rule d that the above grandfather clause does not appl y 

to enti t ies but rather only to business l ocations. Thus, 

the clause applies only to those establ i shed locations of 

a firm which employed ful l - time optometrists as o f June 21, 

1938, and not to branches of the same company ope ned subsequent to the effective date of the statute. 

13 
In addition to prohibiting employment of op tometrists by 

lay persons or firms, some of these statutes appear to 

preclude any type of financial association between optometr ists 

and lay persons. For example, one type of statute provides that 

an optometrist shall not associate himself or he r self in any way 

with a person who is not a licensed o r regis tered optometrist. 35 

Another type of statute provides that an unlicensed individual 

or firm shall not engage the services of an optometrist upon 

a lease arrangement as well as upon a salary or commission basis.3 6 

In addition to the twenty-four states with express statutory 

employment restrictions, there are eight additional states with 

statutory provisions making it illegal ''to spl it or divide a 

fee with an unlicensed person" or "to aid or abet an unlicensed 

35 "Associati on for the joint practice of 

optometry with any person, corpor a tion 

or partnership not licensed to practice 

optometry or another of the healing arts 

[shall be deemed unauthorized]." Me. Rev. 

Stat. Tit. 32, § 2435. 

An equally broad provision is found in Connecticut's 

optometry act. It provides that "no unlicensed person 

shall engage indirectly in such practice by utilizing 

for commerc ial benefit or pecuniary gain the profesional 

services of any licensed optometrist . " Conn. Gen. Stat. 

Ann. § 20-133a. 

36 "It is likewise unlawful for any corporation, lay body, organization, group, or lay 

indiv idual to engage or undertake to engage 

in, the practice of optometry through means 

of engaging the services upon a salar y, commission or lease basis, or by other means 

or inducement, any person licensed to pract i ce optometry in this state." Fla. Stat . 

Ann. § 463.11(3). _Se e~-, N.H. Rev. Stat. 

Ann. § 327:27; R.I. Gen . Laws§ 5-35-20(1). 

14 
person in the practice of optometry."37 These statutes may be 

inteJCpreted to prohibit lay employment of optometrists and 

therefore indirectly achieve the same result as explicit 

rest1r ictions on lay employment. . 38 

Another means of restricting lay employment is through state 

board of optometry rules or regulations defining une thical, unprofessional or illegal practices. 39 There are six states in which 

the optometry practice acts are silent on the question of lay 

employment but in which lay employment is proscribed through 

board of optometry regulations.. 4 ° Finally, employment restrictions have also been effectively imposed even by court decisions 41 

37 Alabama, Maryland, Michigan, Minnesota, New Mexico, Texas, 

Wisconsin, and Wyoming. In 4 of these states, the statutes 

proscribe splitting or dividing a fee with _§.!2Y person . 

See Ala. Code tit. 34 § 34-22-23(16); Mi c h. Stat. Ann. 

§338.254(2)(a); Minn. Stat. Ann§ 148.57(3); and Wyo. Stat. 

§ 33-300(1) (2a). 

38 For example, the Alabama statute provides that an optometrist's 

license may be revoked or suspended "[f]or practicing optometry 

as the employee of any person, group, association or corporation 

on the basis of any fee splitting or on any basis which has 

the effect of such agreement . Ala. Code tit. 34, §34-22-

23(16) . 

39 In such cases the optometry board is given the power , through the optometric practice act, to adopt rules or 

regulations defining unethical, unprofessional or illegal 

practices. Available information indicates that a total 

of 13 boards of optometry restrict lay employment (in six 

of these states, the statutes regulating the practice of 

optometry are silent on the question of lay employment) . 

See chart on page 28, infra. 

40 Alaska, Arizona, Kentucky, Mississippi, Ohio and Pennsylvania. 

41 See, ~, New York Stat.Ee! Optical Association v. Whelan, 

380 N. Y.S. 2d 973 (1976);; Golding v . Schuback Optical Co., 

93 Utah 32, 70 P. 2d 871 (1937). 

15 
r 

and attorney general opinion.42 

b. Employment of Opticians 

Restrictions on lay employment of opticians are only 

an issue in those twenty states which currently license opticians.43 Of these states, two impose spec i fic employment 

44 restrictions on opticians . In some states which license opticians , the state legislature has taken the opposite tack and has 

specifically allowed opticians to work for non-opticians and 

45 non-professional corporations. 

42 ~ Op. Atty. Gen. of Vt. No. 19 at p. 191 (Jan. 16 , 1967) . 

43 Alaska , Arizona, California , Connecticut, Florida , Georgia , Hawaii , Kentucky, Massachusetts , Nevada , New Jersey , New 

York , North Carolina, Ohio, Rhode Island , South Car olina, Tennessee , Ve rmont , Virginia , and Washington . 

44 The two states are Arizona and Tennessee. The Tennessee 

statute provides that it is unlawful for any person to 

practice as a dispensing optician as an employee of any 

person who is not a licensed dispensing optician or for 

any firm or corporation which is not engaged primarily 

in the practice of a dispensing opticianry under the actual 

and personal supervision of partners , officer, manage r, 

or stockholders who possess licenses as dispensing opticians. 

Tenn. Code Ann. § 63-1403(d). The Arizona statute, on 

the other hand , provides that the corporate form of practice 

is permissi ble so long as the person " actively in charge 

of the establishment" is a l i censed di spensing optician . Ar i z. Rev. Stat. § 32-1696(1). Th i s may mean that nonopticians can be shareholders o r offi cers so long as the 

manager or pe rson in charge of the day- to-day operations 

of the f irm is a licensed optician. 

45 See,~, Fla. Stat. Ann. § 484.014(4) (West); Ohio Rev. 

Code Ann. §4725.59(B) (Page); Vt. Stat. Ann. tit. 26 , § 2653(3). 

It would appear that the concern about commercialism or 

growth of " non-traditional delivery systems" does not evoke 

the same concerns as it does fo r the field of optometry . As the chart on page 28, infra , shows, there are few commerc i al practice restraints specifically applying to opti­ cians. Rather, opticians a r e generally restrict ed by scope 

(Footnote Continued ) 

16 
Besides t~ose restrictions directly affecting the development of commercial optical practice outlined above, limitations 

on opticians in the capacity of an employer of optometrists 

al:so have the effect of restraining commercial optical practice. 

A substantial number of states prohibit opticians from furnishing 

the services of, or employing optometrists. 46 By preventing 

opticians from employing optometrists (and similarly by preventing optometrists from working for opticians) the ability of 

the optician's practice to "generate" prescriptions is limited. 

If optical firms are allowed to employ optometrists for the 

purpose of offering eye examinations, optical firms would be 

able to offer the one-stop service available from dispensing 

optometrists and ophthalmologists. To some extent,the prescription release requirement of the Commission's Eyeglasses I Rule 

has reduced this competitive disadvantage but the reality of 

the situation is that the ability of a practice (solo or commercial) to combine the examination and dispensing functions 

provides the practice with a steady flow of prescriptions to 

45 (Footnote Continued) 

of practice restraints,. that is, duplication of lenses 

and contact lens fitting restrictions. 

46 Arizona, California, Connecticut, Hawaii, Kansas, Maine, 

Massachusetts, New Hampshire, New Jersey, North Carolina, 

North Dakota, Ohio, and Pennsylvania. (Four of these states 

-- Kansas, Maine, North Dakota, and Pennsylvania -- do not 

license opticians. Thus, in those states, this restriction 

is contained in the optometry practice acts.) 

17 
-

be filled. Thus, as a practical matter, even where commercial 

optical practice is permitted, the inability of a retail ophthalmic seller to employ an optometrist may serve to deter potential 

volume sellers from entering a market. 

2. Restrictions on the Permissible Location of Optometric 

and Optician Practices 

Some people assert that large retail optical firms rely 

on convenient locations to attract customers and obtain a substantial portion of their business from walk-in customers. 

If these assertions are true , the ability of an optical firm 

to operate in a high traffic area (such as a shopping center 

or department store) may ultimately determine whether it is 

possible to develop a high-volume practice. 

Location restrictions are imposed in a number of ways. 

Thirteen states restrict by statute the ability of optometrists 

to locate in mercantile establishments. 47 In fifteen other 

states, location of optometric practice is restricted through 

board of optometry regulations. 48 Generally, these provisions 

state that an optometrist's license to practice may be revoked 

or suspended for practicing in an office not devoted exclusively 

to the practice of optometry or other health care profession, 

or where material or merchandise is displayed pertaining to 

a commercial undertaking not bearing any relation to the practice 

Connecticut, Delaware, Hawaii , Maine, Nevada, New Jersey, 

Oklahoma, Rhode Island, South Carolina, Tennessee, Texas, 

Virginia, and West Virginia. 

· 4 8 See chart on page 28, infra. 

18 

47 
of optometry or other health care profession.49 The practical 

consequence of restrictions of thi s type i s to eliminate the 

possibility of l oca ting an optometric practice in a department 

01r drug store. 

Another category of location r estrictio ns seeks to prevent 

optometrists from locating near retail opticians. 50 While the 

proffered rationale for restraints on "side-by-side" operations 

is to prevent any patronage system from developing, this type 

of restriction may also prevent the growth of a high-volume 

practice. 51 Indeed , side-by-side practices appear to have 

4'9 The Delaware statute provides that an optometrist's certificate of registration may be r evoked or suspended for 

"practicing in an offi ce not exclusively devoted to the 

practice of optometry or other health care profession, 

where material or merchandise is displayed pertaining to 

a business or commercial undertaking not bearing any relation to the practice of optometry or other health care 

profession; or practicing in a store or office which does 

not con form to that used by the majority of professional 

men in the area." Del. Code tit. 24, § 2113(a) (7)(d).See, 

~,Nev.Rev. Stat. § 636.300(11); N.J. Rev. Stat.-§-

45: 12-11(1)(2)(j) (West). 

In addition, the Maine statute provides that sanctions 

may be imposed "if such person prac tices in or on premises 

where any materials other than those necessary to render 

his services are dispensed to the public." Me. Rev. Stat. 

tit. 32, § 2432(1). 

50 

~, ~, Okla. Stat. Ann. tit. 59 , § 594 (West) which 

provicles: "No optometrist •.. shall practice his profession adjacent to or in such geographical proximity to 

a retail optical outlE!t store, optical dispensery or any 

establishment where optical goods and materials are purveyed to the public so as to induce patronage for himself 

thereby." 

51 If side-by-side ope r ations were permitted, non-dispensing 

optometrists might be abl e to compete for patients who 

prefer one-stop shopping and, therefore, ordinarily select 

(Footnote Continued) 

1 9 
developed to provide the functional equivalent to mercantile 

location and corporate employment in areas where those practices are banned. 

Several courts have held that statutory provisions or 

board of optometry or opticianry regulations prohibiting mercantile location are constitutional and within the state's 

52 police power. In general, courts have applied a rational 

relation test and have been unwilling to delve into the merits 

of the quality justification offered in support of location 

restrictions. 

There are no statutory location restrictions affecting 

where an optician may operate his or her business. 53 Two states 

which license opticians , have, in fact, enacted statutory provisions which provide that opticians may locate in a mercantile 

51 (Footnote Continued) 

the services of a dispensing optometrist or ophthalmolo­ gist. 

52 See , ~, Williamson v. Lee Optical of Oklahoma , I nc., 

"34"8" U~483 (1955), reversing Lee Optical of Oklahoma , Inc . v. Williamson , D.C., 120 F. Supp. 128 (W.D. Okla. 

1954); Wall v. American Optometric Association, 379 F. 

Supp. 175 (N .D. Ga. 1974) , aff'd 419 U.S . 99 (1974) ; 

Silverman v . Board of Registration in Optometry, 181 N.E . 2d 540 (Mass. 1962). 

53 However , restrictions on an optometrist' s ability to locate 

near an optician, to locate in a mercantile location, and 

on the ability of opticians to employ optometrists may 

have a n impact on opticians despite the fact that there 

may be no location restrictions directly applying to 

opticians. 

20 
----

,

or other "commercial" area.54 

3. State Restrictions on the Number of Branch Offices an Eye 

Care Practitioner May Operate 

A number of states restrict the number of offices an 

optometrist or optician may legally operate. The laws vary 

considerably in the type of restriction imposed. For example, 

some provisions set a maximum number of branch offices a practitioner may operate. 55 Other states require that a practitioner 

must apply to the licensing board for a permit to open a branch 

office. 56 Some laws further· restrict practitioners by providing 

that the branch office must be closed when the practitioner 

57 is not in personal attendance . Another provision provides 

that a practitioner may operate branch offices so long as he 

or she is in personal attendance at each office 50 % of the time 

58 the office is open to the public . Thus, such a restriction 

54 See,~, Fla. Stat. l\nn . § 484 . 014(5)( West); Va. Code 

°§5"4-398.23(7). 

55 The maximum number of branch offices permitted is generally 

one. See,~, Ky. Rev. Stat. Ann.§ 320 . 310(3) (Baldwin); 

Me . ReV:-Stat. tit. 32 , § 2432 (11) . 

56 A permit is usually granted only if the board determines 

that the branch office would be in the public interest 

or if the practitioner satisfies certain criteria such 

as being physically present in the branch office a certain 

number of hours per week. ~, ~, Pa. Stat. Ann . tit. 

63, § 234 (Purdon). 

57 See, ~, Tex . [Heal tln & Safety] Code Ann. tit. 71, 

§ 4552-5.13(e) (Vernon) . 

See,~, Cal. [Bus. lie Prof.] Code§ 3007(i) (Deering) 

wfiTch provides : 

Nothing in this chapter shall prevent an 

(Footnote Continued) 

21 
-

limits the practitioner to only one branch office, to the extent 

that such a practitioner seeks to have the branch office open 

normal bus iness hours. 

Nine states restrict by statute the number of branch offices 

optometrists may operate. 59 There appears to be only one state 

which imposes any kind of branching restriction on opticians. 60 

In addition to the nine states which statutorily impose branch 

office restrictions on optometrists , eleven other states impose 

branching restrictions through board of optometry regulation. 61 

In Ohio , branching restrictions are imposed through attorney 

general opinion.62 

The courts have held that a state, through its police 

power, may restrict the number of branch offices an eye care 

58 (Footnote Continued) 

optometrist from owning, maintaining or 

operating more than one branch office if 

he is in personal attendance at each of 

his offices fifty percent (50%) of the 

time during which such office i s open 

for the practice of optometry. 

59 Alabama, Alaska, California, Kentucky, Maine, Massachusetts, 

Pennsylvania, Tennessee, Texas, and Vermont. 

60 See N.C. Admin. Code Title 21, Chap. 40, § .0203. Florida, 

-rn--fact, has enacted a provision specifically providing 

that opticians shall not be restricted in the number of 

offices they may wish to operate. See Fla. Stat. Ann. 

§ 484.014(5) (West). 

61 Arizona, Connecticut, Florida, Georgia, Idaho, Massachusetts, 

Mississippi, North Carolina, Oklahoma, Oregon, and South 

Carolina. 

62 See Op. Atty. Gen. Ohio No. 4263 (1932). 

22 
practitioner may operate.63 In these decisions, the courts 

have applied the rational relation test to determine whether 

there is a basis for the restriction and have not scrutinized 

the merits of the proffered justifications. 

4. Restrictions on the Ability of Optometrists or Opticians 

to Practice Under a Trade Name 

Another state-imposed restriction which serves to impede 

the growth of commercial practice is a ban on the use of trade 

names. Trade name restrictions generally prohibit an optometrist 

from practicing under any name other than the one shown on his 

or her license or certificate of registration. 64 However, 

these restrictions generally do not prevent an optometrist from 

working for another optometrist and holding him or herself out 

under the name of the professional corporation. Thus, these 

restrictions have a distinct discriminatory impact on non-professional 

corporations. (The discriminatory impact here is not that a 

professional corporation is able to use a traditional trade 

name but rather that an individual optometrist can hold him 

or herself out under a firm name which does not contain his 

or her individual name so long as that firm is a professional 

corporation or the name of a licensed optometrist who employs 

63 See,~, Wall v. American Optometric Association, Inc., 

~ F. Supp. 175 (N.D. Ga.), aff'd, 419 U.S. 888 (1974); 

Abelson's Inc. v. New Jersey State Board of Optometry, 

75 A.2d 867 (N.J. 1950). 

64 For example, a trade name ban would prohibit an optometrist 

or opti cian from using a name such as "Discount Optical" 

or "The Contact Lens Clinic." 

23 
that individual optometrist.) 

The trade name ban issue arose during the Eyeglasses I 

proceeding. The Eyegasses I Rule 65 preempted state laws which 

prohibit, limit, or burden the advertising of ophthalmic goods 

and services. Although the United States Court of Appeals for 

the District of Columbia Circuit has remanded for further consideration the entire advertising portion of the Eyeglasses 

Rule {thereby suspending operation of that portion of the Rule), 

at the time the Rule was promulgated, the question arose whether 

a practitioner could be prohibited from using a trade name in 

advertising. We concluded that trade name bans we re not preempted by the trade regulation rule because they do not refer 

to whether one can advertise but rather to the form in which 

one can do business. The intent of the Rule was to eliminate 

burdens on the dissemination of information and not to alter 

state regulations regarding permissible forms of business practice . 

It has been argued that trade name bans indirectly restrict 

corporate practice and the development of large commercial 

chains. 66 Bans on the use of trade names may prevent providers 

from operating multiple store operations and developing goodwill based on the name and reputation of the firm generally. 

Trade name bans may also inhibit effective mass-media 

65 16 C.F.R. Part 456 (1980). 

66 ~'~-,Birenbaum and Kamarck, Freedom of Commercial 

Speech Threatened by Friedman Decision, The Natl. L.J. 

20, 21 (Ap. 23, 1979). 

24 
advertising by large firms and, thus, indirectly restrict commercial practice even in those states where the commercial practice of optometry is otherwise permitted. It has been asserted 

that---uver time a t rade name can provide consumers with important 

information concerning the type, price and quality of goods and 

services offered for sale in that practice and that, therefore, 

trade name bans, like advertising bans, restrict the free flow 

of commercial information. 6 7 If the use of trade names does 

facilitate advertising which is often important to the success 

of large-scale commercial practices with numerous branch operations,68 these bans may havE? the indirect effect of precluding 

commercial practice. (In fact, some people have asserted that 

the real purpose of optometric trade name bans is to stifle 

cammercial practice.) Thus, our position is that trade name 

bans are appropriately considered in an investigation of commercial 

practice restraints. 

A prohibition on the use of trade names was recently upheld 

67 See Friedman v. Rogers,, 440 U.S. 1, 22-23 (197 5) 

T<ITssenting opinion, J .. Blackman) (quoting deposition 

of Prof. Le e Benham). 

Trade names such as Sears or Bloomingdales convey to most 

people totally different ideas and expectations as to the 

price, reliability and quality of merchandise sold at the 

different named st6res .. In addition, trade name bans make 

it difficult for a firm offering a degree of uniformity 

in goods and services at all their outlets to tell consumers 

that the firm ~xists. By conveying such information, trade 

names may reduce search costs for consumers. 

68 Trade names may also hE~lp consumers distinguish commercial 

providers from non-commercial providers. 

25 
by the United States Supreme Court against a First Amendment 

69 challenge in Friedman v. Rogers . Later in this report we discuss the justifications offered in support of trade name bans 

and the impact of the Supreme Court's decision on the ability 

of the Commission to act. 

Trade name bans are imposed in a variety of ways. Twentyone states prohibit by statute the use of trade names by optomet r ists.70 These statutes provide that practicing optometry 

"under a name other than one's own name" shall constitute grounds 

for revocation or suspension of one's license to practice. 71 

In eight other states, the statutes do not refer explicitly 

to trade names 72 but provide that the practice of optometry 

under a "false or assumed name" shall be grounds for suspension 

or revocation of one ' s license to practice optometry . 7 3 An 

additional twelve states prohibit the use of trade names by 

optometrists 74 through state board of optometry regulations . 

440 U.S . l (1979). 

71) Alabama, Florida, Hawaii, Illinois, Kansas, Kentucky, Maine, 

Massachusetts, Missouri, New Jersey, New Mexico, North 

Carolina, Oklahoma, Rhode Island, South Carolina, South 

Dakota, Tennessee, Texas, Utah, Virginia, and Washington. 

71 See , ~, Ala. Code tit. 34 § 22-23(11); N.M. Stat. Ann. 

§ 67-1-ll(D); Tenn. Code Ann. § 63-822(f). 

72 Arizona, California, Idaho, Iowa, Montana, Oregon, Vermont, 

and West Virginia. 

73 See,~, Ariz. Rev . Stat. § 32 - 1755(11); Idaho Code 

§°5"4-1510(2); Or. Rev. Stat. § 683.180(5) . 

74 See chart on pag e 28, infra. 

2 6 
Thus, only nine states and the District of Columbia permit or 

75 are silent on the use of optometric trade names. 

See chart on page 28, infra. 

27 

75 
• • 

Chart of £tate La"'s (Coma,erc:ial Practi~ Restraints) 

bz?loyment 

ltest.ric:tions 

i.oc:ation 

Aestric:tions 

Jlra.neh 

-Ile•tri c:tions !'rade 

llame hos 

State O.D. Optician 0.D. Opticia.n O.D. Optician 0.0. Oj,tic:ian 

Ala!>&JU s• I 5,E 

Alaslr.a ll S,R R 

Arizona g s•.a,1: 

Arltazisas s E 

California s s s• R,E 

Colorado 

Connecticut 

t>el.e.,,.are 

OisciC't o! O:>ll.ltbi.a 

Floi:-ida 

Ge:lrgia 

Bawaii 

Ida."lo 

Illinois 

Indi ana 

s 

S ,E 

S,Jt 

s 

s,Jt 

s 

Jl,E 

S,E 

S , ll 

B,£ 

s 

Jl 

E 

ll 

Jt , C 

lo...-a C E s•,E: 

ICansas S,R,C S,R 

~e:ituc:ky R,C S,R s 

Louisi&na C E 

Maine S,E S E s S E 

M.iryla.nd s• 

Jllassa::huse~ts s Jl,E Jl, E.A 

Michigan s• E 

Ki.nnesota s•,t,J. E 

.l'tississi?Pi R,C,J. R Jt 

Jl'..isso:.i.ri R,E S,E 

~:lnt.,_.-,a s Jt, E s• ,R,£ 

Ne:c::-aslta 

Ne~a~a S $,R ~ 

lie. !ia.=.:isl':.ire S R. 

ti-:•,.- Je:sey s,Jt s,t - C 6,t 

Ne.., Me.xico s• s, E 

li,e,,, Yo::-k C R,E 

li;:-tt: Carolin• s Jt. ll a s 

t.ort.h 0Akota S R 

Ohio R,C A R 

OltlahoQa S S,R,t R,£ S,£

-0.~o-----------'---------------'----:.------·----------s&..,------------- Pennsylva.ni a R Jl ·g•;R R,E 

lt.~ode Island S ·s S,R· 

South Carol.uia S,lt ll S,R 

Sout.b Da..itot& S,S• a S,R 

. Te:111es5ee 

41'eius Ota.~ 

s

s•C 

g 

.S,I: 

~ 

S 

.s.z 

6 

.s,t: ---~S;c__ ________ 

Ve:.iicnt. A, 5 R, S • 

Virginia 

Was)-.i.nqton 

S,R 

c:,E 

S 

E,Jl 

S,R 

s•,E 

a.est. Virginia 

~iseonsin 

ll,S

s• 

E,S S,£,R 

tiy=ing s• 

~ey: ,! Statutory restriction (r~vo~tion, sus~nsion, E - State Opto=ie~ic >.s soc-iiltii:n: ruli!: 

refusal to r enew li~QSC) of pr,.ctiee or code of et.hi.cs 

s• - ar..biquo~s statute pi:-::ihibition

! - State aoard or AdJ::.inhtrative Requlatioo e - Cou...-t deeisia:i 

~ - Attorney General Opinion 

28 
&.'"I

-

-

-

D. Proffered Justifications for Commercial Practice Restraints 

1. Introduction 

Proponents of commercial practice restraints argue that 

these restrictions are necessary to protect the public health, 

safety and welfare. The most serious claim is that these 

restrictions are necessary to protect the public from low quality 

vision care. In addition, one particular category of commercial 

practice restriction , bans on the use of trade names, has been 

justified on the ground that such laws are necessary to prevent 

consumer deception. 

With the exception of whether trade name bans are necessary 

to prevent deception, our discussion of these justifications 

which follows treats the four commercial practice restrictions 

together, rather than considering separately each of the arguments offered in favor of prohibitions on corporate employment, 

limitations on operation of branch offices, restrictions on mercantile location, and trade name bans. Each of these restrictions 

is, in essence, aimed at inhibiting large volume, chain retail 

operations, and , therefore, many of the same arguments are made 

to justify each of the individual restrictions. To the extent 

that there are arguments which apply spec i fically to a particular 

restriction, these will be noted. 

2. Restrictions on Commercial Practice Are Necessary to Maintain 

the Quality of Vision Care 

The primary argument made against commercial firms in the 

ophthalmic market is that they provide low quality vision care. 

Those who seek to eradicate commercialism from the market argue 

29 
that commercial practice restrictions are necessary to protect the 

public health , safe ty and welfare. High-volume commercialists, 

it is maintained , will place their interest in profits above 

their responsibilities to consumers . As a result, argue opponents 

of comme r cial practice, the quality of goods and services provided by optometrists who work in a commer c i al setting is lower 

than that provided by "professionals." 76 Furthermore, they 

assert that if professional practitioners are forced to compete 

with commercialists, the overall l evel of quality for all categories of practitioners will decline. 77 

The quality-based arguments against commercial practice 

fall into two general categories. The first include those which 

foc us on the evils alleged to be associated with high-volume 

practice: practicing in a commercial environment may cause 

the practitioner to employ a variety of cost-cutting a nd revenuegenerating techniques in order to increase his or her p rofits. 

The second stresses the dangers of lay-owned optometr ic practices : 

lay interference in the traditional doctor-patient relationship 

and with professional j udgments concerni ng patient welfare. 

One of the most common charges made by those opposing commercial practice is that t he high-volume practice which characterizes the commercial firm results in brief and inadequate 

76 See Summary of Comments, supra note 26 at 2- 4. 

77 See note 95, infra. 

30 
---

eye examinations for consumers.78 This is the so-called "quickie 

exam" argument . Some speak of eye examinations lasting 5 to 

7 minutes. 79 Examples are cited of commercial optometrists 

performing 45 examinations in a day.BO Others suggest that 

the length of the exam may vary, depending on the time available 

81 and the number of persons in the waiting room. Thus, on a 

busy Saturday, one may see the examining optometrist only 3 

to 5 minutes. 82 

Those making these charges cite two major dangers resulting 

from the quickie exam. First, commercial optometrists may fail 

to detect eye pathology and refer the patient to a physician 

for further care . A five minute examination leaves no time for 

such tests as the retinoscopy, ophthalmoscopy, or tonometry, 

78 See, ~, Letter from Joseph W. Jenkins, Executive Director, 

South Carolina Optometric Association, to .FTC (Oct. 22, 1975), 

Exhibit IV-60, at R. 3189; Letter from Carl Jagolinzer, O.D., 

to FTC (Oct . 29, 1979), Exhibit IV-39, at R. 3048; Comment 

of Maryland Optometric Association, Exhibit VIII-177 at 

R. 14865 ; Letter from James W. Elless, O.D., to FTC (Oct. 28, 

1975), Exhibit VIII-196, at R . 15002. 

79 See Comment of Maryland Optometric Association, supra note 

?B;- at R. 14865; LettE~r from Karl D. Morrision, Executive 

Director, Florida Optometric Association, to FTC (Oct. 28, 

1975), Exhibit IV-60, at R. 3088 . 

80 See Letter from James w. Elless, O.D., supra note 78. 

81 See Hearings on H.R. 2388 before Subcomm. No. 4 of the 

House Comm. on the District of Columbia, 91st Cong., 1st 

Sess. (1969) (Statement of Charles M. Babb, Esq., on behalf 

of the Texas Optometric Association), Exhibit VI-29, at 

R. 12343; Testimony of Edward F. Stein, O.D., Tr. 926 at 

929, 930; Testimony of Herman Gould, o.o., Tr. 4749 at 4754. 

82 See Letter from Karl D. Morrison, supra no te 79, at R. 

3088. 
and , as a result, symptoms of eye disease may go undetected.83 

Second, "quickie" exams may lead to inaccurate prescriptions. Opponents of commercial practice have contended that 

the exams performed by commercial optometrists do not permit 

enough time for a thorough refraction , and that errors in prescriptions result from the rushed procedures . 84 

Similarly, objections to high-volume practice have been 

founded in the contention that adequate quality control is lacking. A justification proffered for branch office restrictions 

is the assertion that the owner of an optometric practice should 

be physically present in order to insure the adequate performance 

of his or her employees. 

The other major argument against commercialism is that 

lay-owned firms i nterfere with professional judgments concer ning consumer welfare and ignore the traditional doctor-patient 

relationship . It is argued that the managements of commercial 

firms pressure their employees to perform low quality examinations and to sell as many pairs of eyeglasses as possible 

by establishing systems of remuneration which reward high 

83 See Hearings on H. R. 2388 before Subcomrn. No. 4 of the 

House Comm. on the District of Columbia, 91st Cong., 1st 

Sess . (1960) (Statement of Eugene V. Mccrary , O.D ., Director of Nat i onal Affairs , AOA), Exhibit VI-29, at R. 12474-

75 ; Letter from Gary Wilson, M. D. , to FTC (May 24 , 1976) , Exhibit VIII- 199 , at R. 1 5010; Letter from Joseph W. Jenkins, 

supra note 78 . 

84 See Report to the Public by the New Jersey Optometric Association concerning Highway Eyeglass Centers, Exhibit IV- 141 , 

at R. 6115. 

32 
vo1ume.85 Several witnesses testified that commercial firms 

utilize a variety of incentives to increase sales, such as paying 

employees on a "per head" basis for examinations performed , 86 

offering sales commissions, 87 and giving bonuses for selling 

a second pair of eyeglasses. 88 It is frequently charged that 

as a result of these financial incentives, commercial optometrists 

write many unnecessary prescriptions. Professionals claim that 

commercial optometrists prescribe eyeglasses and contact lenses 

more frequently than other practitioners.89 

A variety of other types of interference have been cited 

to illustrate the ways in which pressures to maintain profits 

lead to low quality vision care. One former employee of a large 

commercial cha in has a lleged that opticians were instructed 

by management to use lenses from in-store stock to fill prescriptions even though that meant that, in some cases, a prescription was not filled according to the prescriber's speci85 See,~, Testimony of Edward F. Stein, supra note 81 

at 935, 937; California Attorney General's Fight Inflation 

Committee Hearing (1975), (Statement of Robert Oliver, 

Assistant Attorney General of Texas), Exhibit IV-141 at 

R. 6038 - 39. 

86 See Testimony of Edward F. Stein, supra note 81 at 929~ 

87 See California Attorney General's Fight Inflation Commmittee 

Hearing, supra note 85 at R. 6038-39. 

88 Id. 

89 See Testimony of Herman Gould, supra note 81, at 4754- ~ Letter from Brian K1inger, President, New Hampshire 

Optometric Association, to FTC (Oct. 14, 1975), Exhibit 

IV-60 at R. 3144. 

33 
fications.90 Such a policy would cut costs by avoiding the 

expense of ordering out-of-stock lenses from laboratories. 

Other critics of commercial practice suggest that large firms 

control costs by eliminating the routine verification of lenses 

when they return from the lab. 91 Rather, verification is only 

performed if a customer notices a problem and complains. 

It is often suggested that commercial firms use inferior 

quality goods to keep their costs down. 92 Another common charge 

is that commerc i al optometrists have only minimal equipment 

for. conducting eye examinations . 93 

Critics also argue that other less obvious, but equally 

serious, problems arise when commercial firms enter the market. 

Some claim that the doctor-patient relationship is endangered 

in a high-volume commercial practice because of the rushed and 

90 See °FTC Probes Pearle Vision Centers," Optometric Management, March 1979 , at 43-51; t r anscript of interview of 

Russel Smith by Michael Milgrom, FTC staff attorney , concern­ ing FTC investigation of G.D. Searle, Inc. at 14-18 (Dec. 6 , 1978}. 

91 See Letter from Alan Wasserman , President, Georgia State 

Board of Examine rs in Optometry, to Rachel Shao, Attorney, 

FTC, (Oct. 15, 1975), Exhibit IV-59, at R. 2970; California 

Attorney General 's Fight Inflation Committee Hearing (1975} , (Exhibit appended to Statement of Gerald Easton, President, 

California Optometric Association), Exhibit IV-141, at 

R. 5959. 

92 See California At torney General ' s Fight Inflation Committee 

Hearing, su2ra note 85, at R. 6039. 

93 See, ~, "History of Optometry in Rhode Island, 11 Attach­ ment to Letter from Mary Ellen McCabe, for the Rhode Island 

State Board of Examiners in Optometry, to FTC (Dec. 9, 

1975), Exhibit IV-59, at R. 3042. 

34 
impersonal nature of such practice . Even if one assumes there 

is no interference by co r porate management or local store 

managers, professional practi tioners have argued that optometrists in corporate practice t end to become indifferent and feel 

less responsibility to their patients. Their individual identities shielded by a trade name, corporate practitioners have 

a lesser need to maintain a personal reputation for high quality 

service . Thus , some charge, this lack of personal accountability 

in commercial practice leads to a decline in the quality of 

vision care.94 

Finally, opponents of commercial practice argue that the 

overall quality of vision care will decline if commercial firms 

enter the market. They claim that if professional practitioners 

are forced to compete with the commercial chains , they will 

have to lower the quality of their services in o r der to meet 

the low prices of their competitors.95 

94 See,~, Jurisd i ctional Stat ement of Appellent Texas 

Optometric Association, Inc . at 12- 17, Friedman v. Rogers, 

440 U.S. 1 (1979). 

95 A major argument i n the Eyeglasses I proceeding was that 

practitioners would be forced to lower prices and quality 

in order to survive in the more competitive marketplace 

that adverti sing would engender. See,~, Testimony of 

Chester Curry , O.D. , Indiana Optometric Association, Tr. 

993 at 1003; Testimony of Ron G. Fair , O.D., President, 

American Optometric Association, Tr. 4638 at 4694; Testimony 

of David c. Hendershot , Executive Director, Ohio Optometric 

Association, to FTC (Oct. 22, 1975) , Exhibit IV-60, at 

R. 3192; Letter from Robert R. Kimbro, Executive Director, 

New Mexico Optometric Association , to FTC (Oct. 17, 1975), 

Exhibit IV- 60, at R. 31 48 ; Letter from Williams. Eisner , Administrative Di rector , Maryland Optometric Association, 

to FTC (Oct. 14 , 1975), Exhibit IV-60 , at R. 3134. The 

(Footnote Continued) 

35 
Advocates of commercial practice dispute the claim that 

commercial firms provide lower quality service than professional 

practitioners. Commercial practitioners , they argue , rely on 

customer goodwill and repeat business in order to survive. 

Thus, they continue , commercialists have a strong incentive 

to maintain high standards of quality in order to insure consumer satisfaction. 96 

In particular , they take issue with the charge that the 

practice of commercial optometry is controlled primarily by 

economic incentives. They argue that, in fact, the financial 

pressures on self-employed practitioners are far greater than 

those on their salaried counterparts. 97 An independent optometrist 

has a strong motivation to sell an additional pair of eyeglasses 

when he or she receives all the profits from that sale. 

A few commercial firms testified that their employees work 

95 (Footnote Continued) 

Bureau of Economics study findings contradict the assertion 

that commercial practice will lower overall quality. see 

pp. 66- 80, infra. 

96 See Testimony of William A. Schwartz, Vice President, Wall 

~&Ochs, Inc., Tr. 346 at 369; Testimony of Edward Crittenden , President, Eyear Optical , Tr. 6015 at 6019; Testimony of 

Donald Juhl, President , Jack Eckerd Corp . , Tr. 379 at 381- 83; Rebuttal submission of Stanley C. Pearle, Chairman , Opticks, Inc., Exhibit IX-161 , at R. 16378-79; Comment 

of Cole National Corporation, Exhibit VIII-154 , at 14639- 40. 

97 ~, ~, Hearings on H.R. 2388, supra note 81 (St atement of Richard A. Wianman, for United Optical Workers) 

at R. 12383-84; Testimony of Gordon S. Black, Ph.D., 

Tr. 4518 at 4544. 

36 
on a fixed salary and receive no commissions from the sale of 

eyeglasses.98 However , we subpoenaed a number of large ophthalmic firms, and the returns show that some firms do offer bonuses 

or other incentives to increase sales.99 

Supporters of commercial practice have also argued that 

corporate employment permits a practitioner to function more 

effectively.100 In a corporate setting, the practitioner can 

concentrate on providing vision care , while the independent 

optometrist or optician must be concerned with inventories , 

accounts, and a variety of other business considerations. 

Commercial firms also state that they employ a variety 

of quality control procedures, such as using independent 

shoppers to obtain eye examinations, in order to maintain quality 

standards.101 

Several representatives of state and local consumer pro98 See , Hearings on H.R. 2388, supra note 81 (Statement of Alvin M. 

Stein, representing Sterling Optical Company) at R. 12494 . 

99 Reply to Subpoena Duces Tecum served on Acrylic Optics 

Corporation (May 2 , 1977); Reply to Subpoena Duces Tecum 

served on Coffman Optical Company (May 18 , 1977); Reply 

to Subpoena Duces Tecum served on King Optical Corporation 

(May 10, 1977); Reply to Subpoena Duces Tecum served on 

Royal International Corporation (June 27 , 1977) ; Reply 

to Subpoena Duces Tecum served on The House of Vision, 

Inc. (June 10 , 1977); Reply to Subpoena Duces Tecum served 

on Wall & Ochs, Inc . (Sept. 15 , 1977). 

100 See Co~ment of the NAOO , Exhibit VIII- 187 at R. 14938-39; 

Letter from Franklin D. Rezak , Vice President, Cole National 

Corporation , to FTC (November 26 , 1975) , Exhibit V-42 , 

at R. 9993. 

1 01 See,~, Letter from Franklin D. Rozak , supra note 100, 

at R. 9993. 

37 
tection agenc ies who testified in the Eyeglasses I proceeding 

challenged the arguments that commercia l practice restra in ts 

ensure high quality. 102 For example , one argued that there 

appeared to be no basis for the r estrictions other than to restri c t 

competition and preserve an existing economic advantage. 10 3 

Much of the testimony in the Eyeglasses I proceeding o n 

the differences in quality between comme r c i a l and professional 

practitioners is based on anecdotes and personal opinion. Several 

optometrists who testified referred to their own experiences 

with low quality commercial work while practicing as employees 

.of commercial firms. 1 04 Yet little was offered to show that 

there are systematic differences in the quality of vision care 

102 See,~, Testimony of Virginia Long, Director, New Jersey 

D1vis1on of Consumer Affairs , Tr. 1843 at 1854-58; Test imony of Elinor Guggenheimer, New York City Department of 

Co nsumer Affairs, Tr. 1 963 at 1965-67. 

103 See,~~, Testimony of Virginia Long, supra note 102, 

at Tr~56: 

There is no t the slightest reason why an 

optometrist should not be allowed to locate 

wherever he pleases. The o nly basis for the 

prohibition is the possible economi c advantag e 

which could accr ue to one optometrist over 

his colleagμes if he located in connection 

with a commercial opti cian . This proposed 

economi c problem may be a real one for the 

private practitioner of optometry, but in 

my estima tion it is utterly irrelevant to the 

question of the public welfare and health. 

104 See Testimony of James Elless, supra note 78 at Tr . 5363- -11; Testimony of Herman Gould, supra note 81 at Tr. 4750, 

47 55-56 ; Testimony of Edward F. Stein, supra note 81 at 

TR. 929. 

38 
provided by commercial and professional firms.105 Thus, notwithstanding the assertion that commercial practice restrictions 

ensure high quality vision care , there is little or no systematic 

evidence to prove or disprove this assertion. As we discuss 

below in Secti on E, t he studies done by the Bureau of Economics 

and James Begun provide reliable evide nce on this claim and 

draw into question its validity. 

3. Trade Name Bans Ar e Necessary to Prevent Deception 

One of the four commercial practice restraints, the prohibition on practicing under a trade name, warrants separate 

consideration in this section. In addition to the quality arguments discussed above , trade name bans have been justified on 

the ground that they are necessary to p r event deception. It 

has been argued t h at any optometric practice under a trade 

name is ''false and misleading to the pub lic. " l06 The United 

States Supreme Court r ecently held in Friedman v . Rogers that 

a Texas law prohibiting optometrists from practicing under a 

trade name did not violate the First Amendment. 107 In so holding, 

105 A number of opponents of commercial practice who testified 

or submitted comments in the Eyeglasses I proceeding cited 

studies to support t h e ir views. See,~, Report to the 

Public by the New Jersey Optometric Association conce rning 

Highway Eyeglass Centers , supra note 84. These studies, 

however, surveyed only commercial prac titioners, and do 

not contain comparative data on professional practitioners. 

106 Testimony of Alden N. Haffner , Ph.D., Dean of the State 

College of Optometry, State University of New York, Tr. 

2035 at 2081. 

107 Friedman v . Rogers, 440 U.S . 1 (1979), 

39 
the Court concluded that "there is a significant possibility 

that trade names will be used to mislead the public. 11108 

The Supreme Court identified three ways in which use of 

a trade name can be deceptive or misleading. First, it noted 

that there may be a turnover of optometrists within a firm 

employing a trade name while the trade name remains the same. 

As a result, the reputation of a firm using a trade name may 

be based on the skills of optometrists who no longer practice 

with that firm. Second, an optometric practice can simply assume 

a new trade name if the old one becomes associated with negligent 

practice or misconduct . Third, trade names may be used to give 

a false impression of competition among shops under common ownership. In addition, some have suggested that use of a trade 

name is inherently deceptive because it conceals the identity 

of the licensed optometrist.109 

It is our opinion, based on the evidence available, that 

these arguments do not justify a flat prohibition on trade 

names, and that there are less restrictive means of preventing 

the potential dangers of optometric trade names. The state's 

interest in preventing deceptive commercial speech can be protected by controlling the way in which trade names are used, 

rather than the trade name itself. 

108 Id. at 13. 

109 See,~, Jurisdictional Statement of Appellant at 13, 

Frfedman v. Rogers, supra, note 107 and testimony of 

Alden N. Haffner, supra note 106, at Tr. 2081. 

40 
One of the arguments against trade names is that they conceal the identity of the individual optometrist. However, the 

individual optometrist's identity is no more concealed than 

when he or she practices as an employee of another optomet~ist 

or as a member of a professional corporation. Yet most states 

permit an optometrist to work for another licensed optometrist 

and to be a member of a profE?ssional corporation, the name of which 

does not contain the individual optometrist's name. If a state 

were concerned that the name of a practicing optometrist was 

concealed from the public, the legislature could require that 

the names of optometrists be prominently posted at each office 

at which they practice. 110 Similarly, to the extent that a state 

is concerned about the manipulation of trade names to create 

a false impression of competition, it could more narrowly regulate 

by banning the use of different trade names for shops under 

common ownersh ip. 

In addition, there are federal, state , and local consumer 

protection laws which may be used to combat deceptive or misleading trade practices. 111 In instances where deception occurs 

110 It is difficult, however·, to accept the contention that 

the mere use of trade name results in deception. The i dentity of the practicing optometrist is "concealed" only 

in the sense that it might not appear in advertising or 

other places where a firm's trade name may be encountered. 

There is no reason to suppose that consumers cannot obtain 

information about the identities of practitioners employed 

under a trade name, patronize those whom they wish, and 

avoid those whom they find unsatisfactory. 

111 In addition to the Federal Trade Commission Act, 49 states 

and the District of Columbia have enacted "Little FTC Acts" 

(Footnote Continued) 

41 
111 

through the use of trade names, these laws may be invoked. 

Notwithstanding the decision of the Supreme Court in Friedman, 

we know of no systematic evidence indicating that professionals 

engaged in "trade name practice" are deceiving the public. 

Indeed, carried to its logical conclusion, the Supreme Court's 

decision would hold that virtually all lawyers practicing in 

traditional law firm practice are engaged in deception, insofar 

as they are practicing under the name of the law firm, not their 

own name. 

Careful scrutiny of the Texas law sustained in Friedman 

(Footnote Continued) 

to pr.eve nt deceptive and unfair trade practices. Alabama, 

which does not have such a law, has a statute which makes 

false advertising a misdemeanor, and a consumer complaint 

clearinghouse designed to facilitate enforcement of existing 

laws and recommend new legislation. In fact, the Texas 

Optometry Act requires each optometrist to display his 

or her license in a conspicuous place and to sign each 

prescription they write: 

"Every person practicing optometry in this 

state shall display his license or certificate in a conspicuous place in the principal office where he practices optometry and 

whenever required, exhibit such license or 

certificate to said board, or its authorized 

representative, and whenever practici ng 

said profession of optometry outside of, 

or away from said office or place of business , he shall deliver to each person fitted 

with glasses a bill, which shall contain 

his signature, post-office address, and 

number of his license or certificate, 

together with a specification of the 

lenses and material furnished and the 

prices charged for the same respectively." 

Tex. Health and Safety] Code Ann. tit. 71 

§ 4552-5.01 (Vernon). 

42 
belies the contention that it was designed to promote professional identification of the professional delivering the optometric service to the public. The Texas trade name statute, 1 12 

while prohibiting an optometrist from practicing under the 

name of a lay corporation, would permit that same optometrist to practice under the name of a professional corporation 

composed of himself or herself and other optometrists, or the 

name of another optometrist who is his or her employer. 11 3 

Thus, the dissent in Friedman concluded that one primary basis 

for the Texas regulation was to stifle the otherwise l egal practice of commercial optometry in Texas, 114 a conclusion we share. 

Therefore, it is necessary to include trade name restrictions within the scope of our· rulemaking recommendation to 

obtain public comment on less restrictive alternatives to ensure 

meaningful "professional identification'' without the adverse 

economic injury attending trade name bans . Th~ question whether 

the Friedman decision is a bar to Commission action is discussed 

later in this report. 

E. The Effects of Commercial Practice Restraints on Consumers 

112 Tex. [Health and Safety] Code Ann.§ 4552-5.13 (Vernon). 

113 In pertinent part§ 5.13(d) states: 

"[o]ptometrists who are employed by other 

optometrists shall practice in their own 

names, but may practice in an office listed 

under the name of the individual optometrist 

or partnership of optometrists by whom they 

are employed." 

114 440 U.S. at 24. 
1. Introduction 

In this section we discuss whether the commercial practice 

restraints outlined above have a sufficiently serious impact 

on consumers to warrant federal attention. 

In measuring consumer injury, one issue is how these restrictions affect the price of vision care. Opponents of commercial 

practice restrictions contend that they limit competition and 

significantly increase the cost of eye care. 115 Testimony was 

introduced in the Eyeglasses I hearings that commercial optometric 

firms generally charge less than other optometrists116 because 

they are able to employ cost-saving techniques in purchasing 

117 and distribution which may then be passed on to the consumer. 

115 Staff Report, supra note 1, at R. 24492 (p. 120); Presiding 

Officer's Report, supra note 1, at R. 24235-36 (pp. 61-62). 

~,~,Testimony of Elinor Guggenheimer, Commissioner, 

New York City Department of Consumer Affairs, Tr. 1963 

at 1981; Testimony of William B. Haley, Acting Director, 

Department of Public Affairs, Community Service Society, 

New York, New York, Tr. 2129 at 2138. 

116 See,~' Testimony of James J. Ryan, NAOO, Tr. 2360 at 

-z!16; Testimony of R. Ted Bottiger, Counsel, Washington 

Optometric Association, Tr. 4047 at 4048; Testimony of 

Delia Schletter, San Francisco Consumer Union, Tr. 6297 

at 6309 . 

117 See, A Look Into the Price of Eyeglasses, An Investigative Study by the Community Service Society, HX 183 at 18859. 

The study concluded that in these outlets, wholesalers 

generally charge high-volume outlets less per unit and 

that this saving is passed on to the consumer in the form 

of lower retail prices. BX 183 at 18859. 

In addition to the availability of volume discounts on eyeglass purchases at wholesale, it is argued that commercial 

firms may have management skills and access to capital 

which solo practitioners and small group practitioners 

lack. 

44 
A second issue is the effect of commercial practice restrictions on the quality of vision care. States have justified 

these restrictions as necessary to protect public health and 

safety by maintaining the quality of vision care. 11 8 Thus, 

even if prices are found to be lower in states where commercial 

practice is permitted, we must determine whether there are offsetting consumer benefits in the form of higher quality which 

result from these restrictions. 

A third issue is the impact of these restrictions on the 

accessibility of vision care and the frequency with which eyeglasses and eye examinations are purchased. In the Eyeglasses 

I proceeding witnesses testified that restrictions on the permissible form and location of practice make eye care less available.119 It is asserted that restrictions on branch offices 

and mercantile location make it more inconvenient for consumers 

to obtain vision care. Such proponents maintain that some consumers, especially the elderly who are often less mobile, may 

be deterred from seeking eye care because it is not available 

118 See Summary of Comments,, supra note 26, at notes 10-16. 

119 See,~, Testimony of Kenneth Boyer, Ph.D., Assistant 

Professor of Economics, Michigan State University, Tr. 

1281 at 1289; Testimony of Virginia Long, Director, 

New Jersey Division of Consumer Affairs, Tr. 1843 at 1854; 

Testimony of James J. Ryan, supra note 116, at 2367; Testimony of Dr. Simon Rotte nbe rg, Professor of Economics, 

University of Massachuseitts, Tr. 2404 at 2434; Testimony 

of Michael Magura, Ph.D . , Professor of Economics, University of Toledo, Tr. 1261 at 1263. 

45 
at readily accessible locations. 120 These same people argue 

that the ability to locate one ' s practice in a department store 

or other high traffic area , where the office is visible to consumers upon entering the area , may also make vision care more 

accessible to consumers. In addition, some people may not 

receive any care at all or may receive care with decreased frequency because of higher prices which may be attributed to commercial practice restraints. In assessing consumer impact, 

it is important to take into account this "no-care" factor. 

2. The Preliminary Evidence 

A number of studies were submitted in the Eyeglasses I 

rulemaking proceeding or made available to us during the course 

of this investigation which consistently showed that commercial 

practice restrictions have the effect of increasing the costs of 

vision care products and services. However, in each case there 

were shortcomings in the study methodologies employed which 

were sufficientl y serious to question whether these studies 

were adequate to support Commission action to remove commercial 

practice restrictions . 

Studies by Professor Lee Benham of Washington Universityl21 

and the National Association of Optometrists and Opticians 

120 Testimony of Ralph J. Rubinoff , Executive Director, 

Massachusetts Association of Registered Dispensing Opticians , Tr. 2532 at 2543. 

121 Benham and Benham, Regulating Through the Professions: 

A Perspective on Information Control. 18 J.L. & Econ. 421, 

Exhibit V-2 (1975) [hereinafter cited as Benham & Benham]. 

46 
--

(NAOO)l22 sought to assess the economic impact of commercial 

practice restrictions. In both studies, the authors concluded 

that restrictions on commercial practice significantly increased 

costs to consumers. 

A third study was conducted in 1976 by Professor James w. 

Begun, of the University of North Carolina at Chapel Hili. 123 

This study was the first study to address the quality issue. 

Begun conducted a national survey of optometrists in order 

to gather data on the price and quality of eye examinations. 12 4 

His objective was to determine whether the alleged benefits 

122 NAOO, The Price of Ophthalmic Goods and Services, HX 390, 

R. 23607 [hereinafter cited as NAOO Study). 

123 Begun, James w., Ph.D., "Professionalism and the Public 

Interest: Pri ce and Quality in Optometry. " (Ph.D. dissertation , University of North Carolina, June 1977) [hereinafter cited as Begun]. 

124 Questionnaires were mailed to a ten percent sample (2,238) 

of optometrists practicing in the United States. 1 , 195 

usable responses were received from this sample after 

three mailings. The questionnair e was designed to elicit 

information about practice characteristics, attitude about 

professionalism, price of materials and services, and possible indicators of practice quality . The reliability 

of the data received was checked against prior surveys 

of optometrists. Three questions relating to price were 

included in the questionnaire: o ne about prices for bifocal 

lenses, a second about the price for a specific frame, and 

the third about the charge to conduct and eye examination 

of a presbyope. Begun attempted to measure quality of 

optometric service by asking questions about equipment 

available in the refractionist•s office, procedures performed in an examination of a presbyope, and length of 

an examination of a presbyope. Begun, su~ra note 123 at 

43- 46. See note 154 , infra for a definition of "presbyope." 

In addit1on, a copy of the actual questionnaire mailed 

out may be found in Appendix C of the Begun study, supra 

note 123, at 114-125. 

47 
jiii':; 

of professionalism 125 outweighed the costs in terms of the highe r 

prices which earlier studies had shown to be associated with 

restrictions on commerc i al practice. The questionnaire was 

designed to e l icit information about practice characteristics, 

atti tudes about professionalism, price of materials and servi ces, 

and possible indicators of practice quality. 

While Begun ' s study is important in v i ew of the failure 

of past studies to measure quality , it does not offer conclusive evidence on the quality issue. Although the data indicated that professional optometrists performed longer, more 

technical examinations, the study offered no informati on in 

126 terms of patient outcome . One of the major argumen ts against 

125 To measure "professionalism, " Begun considered such factors as a practitioner's involvement in the AOA , h i s or 

her advertising behavior, whether the practitioner was 

involved in a voluntary continuing education program, 

and how many trade journal s the practitioner received. 

Begun, supra note 123, at 50. A more detailed analysis of 

the methodology is found in the next section. In the 

majority of the comparisons Begun made, the quality 

measures were higher for the more "professi onal " optometrists. 

126 "Patient outcome " may involve more than length of examination and tests performed during that examinat i on. The 

key issues are the accuracy of the prescr i ption written 

by the refractionist and discernment of any medical problems. 

Begun agrees that the quality of t he practi t i oner is not 

necessarily measured by the l ength or complexi t y of t he 

examination or equipment avail able for use. Rather, these 

three factors relate to quality of servi ce. Begun , supra 

note 123 at 62. A study conducted i n New York, however, 

did show a correlation between the number of components 

in an examination and the eventual accuracy of the examination. There was also a h i gh co r re l ation between the t ho r oughness of the examination and the a ccuracy of the prescr i ption. 

(Fo otnote Continued) 

48 
---

commercial providers is that they perform 11 quickie 11 examinations . However , measurements of patient outcome include such 

things as the number of unnecessary prescriptions written, the 

accuracy of the prescriptions, whether the eyeglasses match 

the prescriptions, quality of eyeglasses dispensed, and whether 

existing medical problems are uncovered during the refraction. 

None of these was examined by the Begun study. 

The Bureau of Economics (BE) recently conducted a study to 

determine the effects of advertising and commercial practice 

on the price and quality of vision care. In the pages that 

follow, we discuss the findings of that study. Studies from 

the Eyeglasses I proceeding are discussed to the extent that 

they confirm, corroborate or dispute BE 1 s findings. 

3. The Bureau of Economics Study 

The most comprehensive study of the effects of commercial practice restraints on consumers is a study by the Commission's Bureau of Economics in 1978. 127 BE conducted an 

126 (Footnote Continued) 

Testimony of Elinor Guggenheimer, supra note 115 at 1980- 1981. Begun , in his study, argued that at least two measures of professional ism -- trade journals and continuing 

education hours -- may be measures of the quality of practitioners. The data showed both of these as being positively related to examination price. Begun, supra note 123 

at 76. He found that continuing education raises examination 

prices approximately $2.67 in those states with a requirement 

for continuing education. Begun, supra note 123, at 76. 

127 Bureau of Economics, Federal Trade Commission, Economic 

Report -- Effects of Restrictions on Advertising and Commercial 

Practice in the Professions: The Case of Optometry (September 

1980) [hereinafter cited as "BE Study" ]. 

49 
128 

► 

extensive shopper survey of optometric services by purchasing 

eye examinations and eyeglasses in typical market settings. 

The BE study provides comparative data on the price and quality 

of eyeglasses and eye examinations provided by commercial and 

professional practitioners. The following is a general discussion of its methodology and results. 

The BE study was designed to determine whether differences 

in the price and quality of optometric services are related 

to advertising and commercial practice. In order to compare 

the cost and quality of vision care provided by optometrists 

in different competitive environments, BE purchased over 400 

eye examinations in twelve cities throughout the United States, 

some of which were in states where both commercial and professional optometrists practice and others which were in states 

where commercial practice is banned.128 

BE defined the relevant geographical market as Standard 

Metropolitan Statistical Areas (SMSA's), rather than cities. 

The 12 SMSA ' s in the survey were: 

Little Rock, Arkansas 

Knoxville, Tennessee 

Providence , Rhode Island 

Columbia, South Carolina 

Winston-Salem, North Carolina 

Milwaukee, Wisconsin 

Columbus, Ohio 

Portland, Oregon 

Baltimore, Maryland 

Minneapolis, Minnesota 

Seattle, Washington 

Washington, D.C. 

BE Study, supra note 127 at 41. 

In our discussion of the BE study we use the term "cities" 

rather than "SMSA's." 

50 
BE sent trained survey subjects into the field to purchase 

eye examinations and eyeglasses after each subject had received 

two thorough eye examinations, one by optometrists from the 

School of Optometry of the State University of New York (SUNY) , 

and a second by staff at the Pennsylvania College of Optometry 

(PCO). Subjects with different types of refractive conditions were chosen, 129 and those with any eye pathology were 

excluded. 130 

129 Subjects fell into 3 categories: 

(1) "blurred" - myopic individuals aged 43-51 who went 

to their eye appointments without their eyeglasses; 

(2) " 20/20 " - individuals aged 26-36 who went to their 

appointments wearing eyeglasses which adequately 

corrected their vision problems (in order to test, among 

other things, the extent of unnecessary prescribing); and 

(3) "binocular" - subjects who had a vision problem 

which is relatively difficult to correct, and went 

to appointments wearing eyeglasses that did not correct their problem. 

Be Study supra note 127 at 51-52. 

130 The BE study is a procE~ss study which measures completeness of inputs or procedures performed and is not a patient 

outcome study designed to measure the ability of the optometrist to discover all relevant facts about the patient's 

eye condition. While a study designed to assess a practitioner's performance in detecting eye disease and referring 

such patients for appropriate treatment might be the most 

ideal, no actual pathologies were found in any of the candidates 

examined by optometrists at SUNY and PCO. In addition, 

we were told by our consultants that it would have been 

inadvisable to use people with eye disease as survey sub- jects. A survey subject with an eye pathology would not 

have been able to receive treatment until completion of 

the field eye examinations. To permit such a survey subject to delay treatment, even if he or she consents, would 

have raised a serious ethi cal question. 

51 
The optometry staff at SONY trained survey subjects to 

recognize the pro~edures and equipment used in a complete eye 

examination . After four days of training at the SONY campus, 

subjects spent one day at PCO in Philadelphia where they were 

tested on their ability to observe and record accurately various 

visual tests. Before the survey subjects were sent into the 

field to obtain eye examinations, they were debriefed by BE staff 

members.131 

Nineteen subjects then obtained 434 eye examinations and 

corrective lens prescriptions from randomly selected optometrists 

in the twelve survey cities. In 231 cases, subjects bought a 

pair of eyeglasses. 132 

In arialyzing the data, BE compared the price and quality 

of vision care in cities with neither advertisingl33 nor commer131 The issue of possible bias was introduced at this time 

and subjects were instructed to disregard any such bias. 

The BE staff has assured us that the ability of the survey subjects to record accurately what happened in the 

field was not affected by any bias. 

132 Eyeglasses were not purchased in all cases because: a) the 

20/20 subjects were instructed not to buy eyeglasses, even 

if they were re commended by the examining optometrist; 

and (b) sometimes new eyeglasses were not prescribed for 

the binocular subjects. The rest of the difference between 

number of eye examinations and pairs of eyeglasses purchased 

is explained by loss of eyeglasses shipped in the mail 

(4 or 5 pairs) and the fact that all eyeglasses purchased 

in Milwaukee (approximately 12) were not counted because 

t he eyeglasses were mailed after the optometrists who pre­ pared them discovered the purpose of the examinations thereby 

introducing the question of bias. 

133 Data was collected during late 1977 and early 1978, at 

which time state and private restrictions on advertising 

of ophthalmic goods and services were still in effect. 

(Footnote Continued) 

52 
cial practice, to that in cities where commercial practice 

and advertising by optometrists were permitted. Within the 

latter category, the so-called "non-restrictive" markets,13 4 BE 

identified three types of optometric practice: 

(1) non-advertising, non-commercial optometrists; 

(2) advertisers135 not associated with large chain 

firms; and 

133 (Footnote Continued) 

The Eyeglasses I TRR, 16 CFR Part 456 , which eliminated 

those restrictions, until remanded by the United States 

Court of Appeals, took effect July 13, 1978. 

134 "Non-restrictive" markets were those cities in which there 

was (1) nonprice advertising of eyeglassees only and large 

chain firms present; ( 2) nonprice advertising of both eyeglasses and eye examinations and large chain firms present; 

and (3) price advertising of eyeglasses and nonprice advertising of eye examinations and large chain firms present. 

(The limitation to nonprice forms of advertising of eye exam­ inations was more the result of actual practice than experimental design since in the entire study, in any city, at 

any time, only one advertisement containing an advertised 

price for an eye examination was found.) 

"Restrictive " markets on the other hand, were those cities 

where there was (1) no mass media advertising of either 

eyeglasses or eye examinations and no large chain firms 

present; and (2) nonprice advertising of eyeglasses only 

and no large chain firms present. 

135 Advertisers were defined as optometric practices that 

advertised in the yellow pages or the newspapers. Optometrists who listed in the yellow pages only such information as name, address , and telephone number, were classifiea as nonadvertisers. Certain additional information 

in yellow pages listings, such as the location of the office 

relative to major thoroughfares, or use of the words "eye 

examinations," was not considered advertising; however, 

anyone using boldface type were considered advertisers. 

Non-advertisers who were found to use window displays and 

other sorts of on-site advertising were reclassified as "on-site advertisers. 11 

53 
(3) optometrists associated with large chain optical 136 firms . 

Those in category (1) are what might be termed " traditional " 

professionals: non-advertising optometrists in either solo 

practice or standard group practice. Category (2) includes 

professionals who engage in limited forms of advertising as 

well as small firm advertisers. Category (3) is made up of 

commercial practitioners. These optometrists practice in mercantile locations, and may either be employed by a lay corporation or lease space from one. (BE did not determine whether 

optometrists associated with large commercial chains were actually 

employed by these firms or whether they merely leased space 

from the firms.) 

In the discussion of BE ' s findings which follows, we will 

compa r e categories (1) and (3) only. The former clearly represents the traditional professional optometrists, the latter 

the high-volume optical chains which commercial practice restrictions serve to inhibit. Category (2) , the " small advertisers, " 

cannot be classified as either clearly professional or commercial. It includes optometrists who, aside from using advertising 

to some extent, may be indistinguishable from those classified 

as professionals. Category (2) also includes firms that may 

conduct a relatively high- volume practice similar to the large 

BE identified large chain firms by using a list of major 

retail optical firms supplied to BE by the OAA . All the 

large chain firms engaged in advertising. 

54 

136 
137 

chains in category (3), but who do not fall into that group 

because it was limited by definition to the large interstate 

optical chains. Some smaller, local firms may well represent 

commercial practitioners. 

We intend to obtain from BE the names of the optometrists 

and firms in category (2) and eventually to classify them as 

professional or commercial . But in this report we have excluded 

the category (2) observations from our discussion . 

In order to assess the impact of advertising and commercial 

practice restraints on price, BE compared the average price paid 

in restrictive cities (those with no advertising or large commercial firms) with the average prices charged by commercial 

and non- commercial optometrists in non-restrictive cities. 

Price comparisons were based on the total package price for 

the eye examination and e yeglasses. 137 This amount includes 

any dispensing fees, as we ll as charges for gla~coma tests or 

any other examination procedures which we re priced separately. 

In order to permit meaningful price comparisons, a number 

of adjustments were made to the price data to control for factors 

Prices were determined! from receipts obtained by subjects. 

Although subjects werei instructed to request an itemized 

receipt, price comparisons were based on the total packag e 

price, because allocation of charges to specific items may 

have been quite arbitrary . Because not all subjects purchased eyeglasses, it was possible to compare examination 

prices for those cases in which only an exam was obtained. 

Although there was a limited number of observations in this 

category, the overall pattern of price differences is the 

same as that found for the total price data. See BE Study, 

sugra note 127, at 55 . --

55 
other than the presence of advertising and commercial practice which might affect prices. Variations among subjects ' 

refractive conditions were accounted for, since those with more 

complex vision problems might be expected to incur higher costs. 

Other controls included variations in per capita income by city 

(to account for different demand conditions) and c ity to city 

differences in the number of optometrists per capita and incomeper-capita (the less the density of optometrists and the highe r 

the average income, the higher is the market-wide price). Finally, 

adjustments to price data were made in order to reflect differences 

in the cost of living in the twelve cities which were included 

in the survey sample.138 

The chart which follows present BE ' s findings on price. 

Estimates of Average Price for Eye Examinations and 

Eyeglasses139 

Restrictive Cities Non-restrictive Citiesl40 

138 See BE Study, supra note 127, at pp. 48-55 for a more detailed 

discussion of the price adjustments made. 

139 7t should be noted that the average prices shown in the 

table are estimates, based on the adjustments described 

in the text above. 

140 In this chart only, "restrictive cities " are those where 

there was no mass media advertising of either eyeglasses 

or eye examinations and no large chain firms present , and 

"non-restrictive cities" are those where BE observed price 

advertising of eyeglasses and at least non-price advertising 

of eye examinations (as well as the presence of large chain 

firms). Data was also collected in cities with intermediate 

levels of restrictions, but BE found that the price differe nces were less significant. 

Since price advertising of eyeglasses and eye examinations 

may now be legal in all states (see Court of Appeals decision -- (Footnote Continued) 

56 
F 

Non- adve r tising 

Non-commercial $94 . 63 $73.43 

Optometrists 

Large Chain 

Firms none $61.36 

Source: Bureau of Economics 

The BE data s how that, on the average , commercial firms 

charge less than professional optometrists, and that prices 

are lower for all types of practitioners when commercial firms 

are present in the market. 

BE found that the price of optometric servi ces in restrictive cities was significantly higher than in markets where advertising and commercial practice were permitted. Both categori es 

of optometrists in non-restrictive markets charged less than 

p ractitioners i n restricti ve markets. The difference is statistically significant. 141 

The largest price differential ($33) was between large com1 40 (Footnote Continued) 

in America n Optometric ~ss' n. v. FTC, CCH 1980-1 Trade Cas. 

,1 63 , 165 (D. C. Cir. 1980) , BE ' s findings concerning price 

differentials i n cities with only non-price forms of advertisi ng are not relevant to our current inquiry. It is interesti ng 

to note , however , the importance of advertising to commercial 

practice . BE found that the presence of chains had an 

impact on the prices charged by professionals i n the same 

market only in c i ties where there was price advertising. 

141 The ''significance" statements made here and throughout 

this report are at the 95% confidence level . 

5 7 
r, 

mercial firms in nonrestrictive markets and professionals practicing in a restrictive environment. The difference is statistically 

significant. 

Professionals in nonrestrictive cities were found to charge 

significantly less ($21) than professionals in restrictive cities, 

but more than their commercial competitors. 

The Benham and Begun studies corroborate BE's findings 

of substantial price differentials as a function of mode of 

practice . In 1975, Lee and Alexandra Benham conducted a study 

to determine the effect of professional control -- including 

restraints on commercial practice -- upon prices. 142 In a 

study conducted in 1972, 143 Benham had compared prices paid 

for eyeglasses in states which had complete advertising prohibitions with prices paid in states which had no restrictions 

142 Data concerning prices paid for eyeglasses, source of 

eyeglasses, quantities purchased and other demographic 

variables are from a 1970 health interview survey conducted 

by Ronald Anderson in conjunction with the National Opinion 

Research Center and the Center of Health Administration 

Studies of the University of Chicago. Benham & Benham, 

supra note 121, at 428. The data file includes 10,000 indi­ viduals. Out of a total of 1625 individuals, 929 reported 

price paid for eyeglasses separately , 422 reported combination prices for eyeglasses and eye examination, and 274 

provided no information. When combination prices were 

given, the cost of eyeglasses was calculated as 67% of 

the total cost if a physician was listed as the source 

of care, and 70% otherwise.The 1351 individuals who provided price information are used as the basic sample to 

obtain price estimates . The 274 who did not report price 

information were used in estimates in determining the frequency of purchases only. Benham & Benham, supra note 

121, at 428, n. 18. 

143 Benham, Lee , "The Effect of Advertising on the Pr ice of 

Eyeglasses," 15 J.L. & Econ. 337, Exhibit V-1 (1972). 

58 
144 

and found prices were lower in states that permitted advertising. 

Benham ' s 1975 study was spurred by the recognition in his first 

study that there were factors, in addition to advertising bans, 

which restrict commercial information in the retail ophthalmic 

industry and which could , therefore, result in higher prices. 

The Benham study compared eyeglasses prices in different 

states and, like the BE study, found that consumers paid a 

substantially higher price for eyeglasses in states where there 

was greater control by the professional associations and where 

advertising and commercial practice were less prevalent. The 

Benham study , however, did not control for the variation in 

eyeglass frames and lenses and did not purport to measure 

the comparative quality of the eyeglasses purchasea. 144 

The Benhams felt that information flow would be weaker 

The Benhams' study was strongly criticized in a study financed 

by the AOA and conducted by the Southern Research Institute 

(SRI) . Testimony of John Burdeshaw, Southern Research 

Institute, The Advertising of Ophthalmic Goods and Ser- vices: An Economic and Statistical Review of Selected 

FTC and Related Documents, Report to the AOA , Project 3692 

(June 25, 1979), HX 356. As to the argument that the 

heterogeneous nature of eyeglasses purchases was not 

considered, the Benhams countered that the issue is not 

whether some eyeglasses are more expensive than others , but whether consumers in less restrictive states systematically obtain eyeglasses which were less elaborate or 

of lower quality. A wide variety of individual characteristics were examined and were not found to be systematically associated with price differences across states. 

The BE study attempted to control for the hete r ogeneity 

of eyeglasses by instructing survey subjects to purchase 

a particular unisex metal frame and to request glass, as 

opposed to plastic, lenses. See BE Study, supra note 127 , at 46. 

59 
....-

in those states where commercial firms did not exist or had 

a small share of the market and where professional associations 

exerted more control. Three measures of "professional control" 

were used in the 1975 study: 

( 1 ) the proportion of licensed optometrists who were members 

of the American Optometric Association (AOA) through 

its state affiliates;l45 

( 2 ) how difficult it was for commercial firms t o enter the 

eyeglasses market in a given state;l46 and 

( 3) the number of individuals who obtained their eyeglasses from commercial sources.147 

Taking into account various factors which influence the 

145 Although the AOA no longer prevents "commercial" optometrists 

from becoming members , many of the state-affiliated associations do impose such a restriction or at least discourage 

advertising, and membership in the AOA is predicated upon 

membership in a state-affiliated association. Hence, 

the Benhams assumed that the larger the percentage of 

optometrists who are members of the AOA in a given state, 

the smaller the number of optometrists who engage in advertising in that state, and therefore, the fewer commercial 

practitioners there will be. 

146 The Benhams categorized states as "restrictive" or "nonrestrictive." Restrictive states were defined as those 

states in which large commercial firms had difficulty 

entering and operating (for reasons other than competition 

from existing commercial firms). In those states classified as restrictive, a variety of rules and regulations 

existed to discourage or eliminate commercial practice. 

The restraints included express and implicit prohibitions 

on advertising and restrictions on the employment of 

optometrists by lay corporations. Benham & Benham supra 

note 121, at R. 6237-6238 {pp. 426-27). 

147 Benham & Benham, supra note 121, at R. 6237-6238 (pp. 426- 27). Commercial sources were those sources of eyeglasses not 

listed in the Directory of the American Medical Association, 

Directory of the American Osteopathic Association and the 

Bluebook of Optometrists. Id. at R. 6238 (p. 427), n. 16 . 

60 
price of eyeglasses,148 the Benhams concluded that all three 

indices used to measure "professional control '' were strongly 

associated with higher prices paid for eyeglasses.149 Prices 

148 For discussion of the model used and other variables incl uded 

in the estimates , see id. at R. 6241-6245 (pp. 430-34). The 

model is based, in part, on economic literature which indicates 

that purchase price is affected by time costs associated with 

search and purchase. Id. at R. 6241 (p. 430). Thus, other 

associated factors wereconsidered: family size, location 

of residence, age, sex and race. Id. at R. 6234 (p. 423). 

A number of other variables were also included in their 

estimates: years of schooling, marital status, employment 

income, other income, car ownership, number of pairs of eyeglasses purchased, per capita optometrists in state, insurance 

coverage of eye rel ated expenses, cost of eye examination, 

and free eye care received . Id. at R. 6246 (p. 435). 

149 The Benhams specifically found that: 

1 . Prices increase at nearly one-half the rate which mem­ bership in the AOA increases. As the proportion of 

optometrists who are members of the AOA increases from 

43% to 91%, eyeglasses prices increase approximately 

$12.18; 

2. Individuals living in states with greater professional 

control pay 25% to 40% more for eyeglasses; 

3. The mean price of eyeglasses increases substantially 

as the proportion of eyeglasses purchased from commercial firms declines from 79% to 0%; and 

4. The mean price paid for eyeglasses increased for each 

category of supplier (physician, optometrist or commercial outlet) as the level of professional control 

increased. (This finding refutes the assertion that 

price differentials across states are due to the fact 

that in the more professional states a larger proportion 

of the output is supplied by ophthalmologists and optometrists, whose services a re of higher quality and 

therefore more costly.) Comparisons of states with 

low and high AOA membership levels show that mean prices 

paid for eyeglasses obtained from physicians are 20% 

higher, while optome~ists' prices are 42% higher and 

commercial firms' prices are 41% higher than in states 

with low levels of professional control. Id. at R. 6241- 6251 (pp. 430-41). 

61 
r 

were higher in states in which a greater proportion of the licensed 

optometrists belonged to the AOA, states in which commercia l 

firms had diffic ulty entering, and states in which a greate r 

p r oportion of eyeglasses purchases were from non-commercial 

sour ces.ISO Thus, the Benhams concluded that restrictions on 

the permissibl e form and location of business practice which 

limi t commer cial practice may be instrumental in increasi ng 

the cost of vision care and may affect the frequency with which 

consumers obtai n vision care.151 

The NAOO study results also support the proposition that 

form and location of practice restraints reduce competition 

and cause prices to be higher than they would be in the absence 

of these restraints.152 

150 In those states classified as "restrictive," eyeglasses prices 

were on the average $8.46 higher. In addition, as the proportion of purchases from commercial sources declined from 

79% to 0%, (the range observed in the survey) the mean price 

increased $11.71. Id. at R. 6244-46 {pp.433-35). 

151 Id. at R. 6256 {p. 446). 

1 52 This study compared eye·glass pr ices in New York and 

Mississippi. Mississippi was selected because it permitted 

advertisi ng but prohibited corporate employment of optometrists, optometrists from practicing in "mercantile " 

locations or leasing space owned by opticians, and the 

operation of more than one branch office by an optometrist. Conversely, New York permitted these so-called " commercial activities" but imposed certain restrictions 

on advertising. Thus, if the results of the study showed 

that prices were higher in Mississippi than those in New 

York, the f i ndings would indicate that restraints other 

than advertising cause or contribute to prices that are 

h i gher than prices in areas with no such restrictions . 

NAOO Study, supra note 122, at 23611. 

NACO study controlled for the heterogeneity of the eyeglasses. 

(Footnote Continued) 

62 
The Begun study measured the effects of advertising and 

commercial practice restrictions on price. 153 The study measured 

152 (Footnote Continued) 

Shoppers were instructed to request a specific frame (Corsair 

(Pilot) by Universal for single-vision lenses and Leading 

Lady by Artcraft for executive trifocal lenses) . NAOO 

Study, supra note 122, at 23611. 

The average price of single vision prescription eyeglasses 

in Mississippi, where commercial practice was prohibited, 

was $51.88, 25% higher than the mean price in New York 

which was $41 . 38. The average price of trifocal eyeglasses 

in Mississippi was $68.90 , 16% higher than the average 

price of $59.45 in New York. NAOO Study,~__§! note 122 , at 23619-20. 

The NAOO recognized that other fac tors such as costs of 

production could have caused prices in Mississippi to be 

higher. However, NAOO stated that one would expect costs 

of product ion to be lower in Mississippi than in New York 

in view of the lower cost of living, lower cost of medical 

services and lower per capita income. Adjustments for 

differences in per capita income were made by dividing 

the 1975 per capita income of Mississippi ($4,0 41) and 

that of New York ($6,603) into the mean price for eye­ glasses in those states respectively. The result showed 

that on the average the price of eyeglasses in Mississippi 

has twice as much impact on the family budget as it has 

in New York . The study concluded, therefore, that the 

higher prices in Mississippi probably resulted from the 

commercial practice restraints. NAOO Study, supra note 

122, at 23624-27. 

Although the cost of living is generally higher in New 

York, NAOO did not make a study of whether it costs more 

to produce prescription eyeglasses in Mississippi than 

in New York. Testimony of R. Burr Porter, Ph.D. , Associate 

Professor of Finance, Southe r n Methodist University, on 

behalf of NAOO, Tr. 6264 at 6285-86 . 

153 It should be noted that the data was collected before the 

FTC trade regulation ru le which lifted adve rtising bans 

took effect. In states where advertising was prohibited , little commercial practice could be expected to exist . In other words , the ability to obtain the volume of business which makes commercial p r actice viable appears to be 

dependent on the ability to engage in mass media advertising. 

(Footnote Continued) 

63 
,... 

prices for optometric services, comparing fees f or the eye 

examination of a presbyope. 154 Although the questionnaire 

mailed to optometrists asked one question conce rning prices 

for bifocal lenses and a second question concerning the price 

of a specific frame, Begun did not use the responses to those 

questions in his study but instead focused on comparing examination prices.155 

Begun's data indicated that examination prices we re substantially higher in states where advertising was restric ted 

and among optometrists considered more ''professional."15 6 Mean 

153 (Footnote Continued) 

Thus, in states which statutorily prohibited adve rtising, 

there was little inducement for a comme rcia l firm to enter 

the market. 

154 Presbyopia is the deterioration in the ability t o focus 

for near vision and is associated with aging. 

155 Begun felt the responses to these questions were unr eliable due to misinterpretation of the questions by the 

optometrists who responded. Moreover, there appeared 

to be little systematic variation among optome t rists in 

frames and lens prices. Begun, sup r a note 123 at 60. 

156 The professionalism measures used by Begun were of two 

types. One he termed "individual" professionalism which 

included such factors as a practitioner's involvement in 

the AOA, his or her advertising behavior and attitude about 

commercial optometry, whether the practitioner was involved 

in a voluntary continuing education program, and how many 

trade journals the practitioner received. The other Begun 

termed as "structural " or " legislated" professionalism. 

Five measures of structural professionalism were used: 

(1) Continuing education required for relicensing; 

(2) Pr.ice advertising by optometrists prohibited 

by state law or board regulation; 

(3) Price advertising by opticians prohibited by 

state law or board regulation; 

(Footnote Continued) 

64 
r 

examination prices were about 20% higher for optometrists who 

did not advertise or who were involved in the AOA. 157 Examination prices were also approximately 20% higher for optometrists 

in states which statutorily restricted commercial practice and 

in states requiring continuing education.158 

The study results indicated that the price charged for 

an eye examinat ion was correlated to the length of examination , 

equipment available fo r use and examination p r ocedures actually 

performea.159 However , after holding quality constant across 

states, Begun found that examination prices were still highe r 

in states where commercial practice was restricted and where 

156 (Footnote Continued) 

(4) Employment, location or commercial practice of 

optometrists restricted by state law or board 

regulation; and 

(5) Membership coverage of ADA-affiliated state optometric associations. 

Begun , supra note 123, at 73-74. 

157 As mentioned earlier, commercial practitioners generally 

are not members of the AOA, which is why the fifth measure 

listed above was i ncluded . 

158 Begun, supra note 123 , at 73-74 . An increase of one unit 

in the legislated professionalism score raised the examination price by $1.29 and all f i ve indicators of legisl ated 

professionalism were found to be positively relat ed to 

examination price . Of the indivi dual measures of profes­ sionalism, anti-commercial attitudes and AOA involvement 

were most significantly related to price. Id. at 79-82. 

159 The three measures of quality used by Begun were positively related to price. An increase in the length of 

an examination by ten minutes increased examination prices 

by $1 . 20. One additional piece of equipment raised price 

$.58 and one additional examination procedure ra ised p r ice 

$ . 34. Id. at 82 . 

65 
individual anti-commercial attitudes were stronger.160 

Because many have argued that lower prices reflect lower 

quality service, 161 the BE study was designed to evaluate 

and compare the quality of optometric services delivered by 

different types of practitioners. Four aspects of quality were 

addressed: 

(1) the thoroughness of the eye examination; 

(2) the accuracy of the ophthalmic prescription; 

(3) the accuracy and workmanship of the eyeglasses prepared 

from t hat prescription; and 

(4) the extent of unnecessary prescribing of eyeglasses. 

BE's findings on the comparative levels of quality are 

mixed. Analysis of the data revealed significant differences 

in the thoroughness of eye examinations performed by t~e various 

categories of optometrists, but no real differences in the 

other aspects of quality. There were no significant differences 

between commercial and non-commercial practitioners with respect 

to the accuracy of prescriptions written or the quality of eyeglasses sold. Nor was there any evidence to support the contention that commercial chains are more likely to promote sales 

through unnecessary prescribing. 

160 Id. at 79. 

161 See Section D, supra, for a discussion of the allegations concerning low quality vision care by commercial firms. 

See also Staff Report, supra note 1, at R. 24555- 24561 

(pp.7Jff-B9) for a discussion of arguments on the pricequality relationship. 

66 
The BE study did find , however, that there were significant 

differences in the thoroughness of eye examinations. In the 

sense that quality was defined in the BE study, commercial firms 

provided examinations of lower quality than professional firms. 

In measuring the quality of eye examina tions, BE considered such things as the number and types of tests performed 

and questions asked of patients in taking a case history. Survey 

subjects had been trained to observe and identify a variety 

of tests and procedures commonly performed in a complete routine 

eye examination. Upon leaving an examination, they completed 

a debriefing ques tionnaire which included a checklist of the 

procedures performed in the examination. BE staff evaluated 

the results using a scoring system developed by study consultants 

to reflect the relative importance of the various elements of 

an eye examination to overall quality. Each test or procedure 

on the debriefing sheet was assigned a value which reflected 

its relative importance in the eye examination in the judgment 

162 of the consultants. The result was a single quality index 

with 100 as the maximum possible score. Thus, each practitioner 

received a single summary score, ranging 

162 See BE Study , supra note 127, at 94-166 (copy of debriefing 

sheet attached). 

A second system of weights was developed by the NAOO. (Three 

other optometric groups declined the opportunity to suggest 

a scoring system.) Although there was some difference between 

the scoring system devel0ped by our consultants and NAOO's 

system, the two measures were highly correlated. See BE 

study, supra note 127 at 6-7. -

67 
,..., 

from zero to 

titioners in 

100. 

terms 

The numbers show differences between pracof thoroughness of examination. 

Estimates of Eye Examination Qualityl63 

(t-value in Parentheses~164 

Restrictive1 6 Non-Restrictive166 

Cities Cities 

Non-advertising 

Non-commercial 58.8 70.0 

Practitioners N = 104 N = 89 (4. 1 7) 

Large Chain Firms None 51. 6 

N = 50 (2.28) 

N = number of observations 

Source: Bureau of Economics 

163 

164 

165 

166 

The estimates are based on multivariate analysis of all 

regulatory environments:, and they are net of variation due to 

differences in subjects , state optometrists per capita, and 

change in SMSA population. These control variables were used 

in comput ing all of the quality estimates which follow. 

The t-value may be used to assess the significance of the 

difference between the class for which the t-value is presented and non-advertising optometrists in cities without 

chain firms . In a one tail test, values greater than about 

1.65 are significant at: the 5% level; values greater than 

about 1.29 are significant at the 10 % level. For example, 

the average score on examination quality is higher for professionals in non-restrictive c ities, and i t is statistically 

significant, compared to professionals-----rii restrictive cities. 

In this chart and in t he charts which follow, "restrictive 

citiesII are those wher ei there we re no l a rge cha in firms 

present. 

In this chart, and in the charts which follow, "non-r e strictive 

cities " are those where large cha i n firms were present 

which sold both eyeglasses and eye examinations. 

68 
p 

As the chart above indicates, BE found that there were 

quality differences among the different categories of optometrists: 

1. Examinations by large chain firms were less thorough than 

those given by optometrists in cities where commercial p r actice is restricted. 

2. Non-commercial practitioners in non-restrictive markets 

scored significantly higher on the quality index than 

their counterparts in restrictive cities. 

3. Both groups of non-commercial optometr ists scored higher 

than large chain firms. 

In order to determine the source of differences in the 

quality of eye examinations, BE computed quality index scores 

for the three parts of the eye examination: (1) the case history ; 

(2) the eye health exam; and (3) the vision test. In additi on , BE 

focused on five procedures generally recognized as important 

to a thorough eye examination:167 

(1) ophthalmoscopy (examination of the eye with an instru­ ment that illuminates the interior of the eye); 

(2) slit lamp exam or biomicroscopy (examination of the 

cornea under high magnification) ; 

(3) tonometry (a means of detecting glaucoma by measuring 

the fluid pressure within the eye) ; 

(4) retinoscopy or objective refraction (measurement of 

the refractive power of the eye by projecting light 

into the pupil and analyzing the motion of the lights 

167 These were the most important procedures according to both 

the FTC and NAOO quality scoring systems . ~ also "How 

to Buy Eyeglasses , " Consumer Reports, Nov. 1977 , a t 645 . 

69 
and shadows on the retina) sometimes called an "objective refraction"; 

(5) subjective refraction (measurement of the r efrac tive 

power of the eye based on the patient's response to 

different lenses the examiner places before the 

patient's eyes during a r eading of an eye chart).168 

In the table below, BE presents the estimated average quality 

index score for the three parts of the eye examinat ion . For 

the eye health or medical portion of the examination, BE shows 

the estimated average number of seconds spent exam ining the 

eye with an ophthalmoscope and the percent of optometrists using 

the slit lamp and the tonometer . For the vision testing portion of the exam, the percent of optometrists using a retinoscope 

and the percent performing a subjective refraction are given. 

Estimated Values of 

Important Components of the Eye Examinationl69 

168 The definitions are based on Herbert Solomon, O.D., and Walden 

J. Zinn, O.D., The Complete Guide to Eye Care, Eyeglasses 

and Contact Lenses 55-59, 235-43 (1977). 

169 The estimated quality index scores for the three parts 

of the eye exam and the estimated number of seconds spent 

using the ophthalmoscope are based on multivariate regression 

analysis. The estimates of the percent of optometrists 

performing critical tests are based on a statistical method 

known as "probit analysis." 

Probit analysis is used when the dependent variable in 

an equation is qualitative rather than linear. For example , 

in analyzing whether or not an optometrist performed a 

slit lamp examination there are only two possible outcomes: 

either the test was performed or it was not. The quality 

measures considered previously were linear, that is, observations consisted of points on a continuum rang ing from 

0 to 100. The quality nneasures used in the BE study which 

remain to be discussed are all qualitatively dichotomous 

variables, and thus the estimated values present ed in the 

balance of this discussion are all based on probit analysis. 

(Footnote Continued) 

70 
(t-values in Parentheses) 

Restrictive Cities Non-Restrictive Cities 

Non-Advertising Non-Advertising Large

Non- Commercial Non-Commercial Chain 

Op tome trists Optometrists Firms 

1. Average Score ( % ) 44.4 55.4 39.6 

Case History (2.07) ( . 83) 

2. Average Score 

Eye Health 

( % ) 5 2. 3 69.5 

(3.18) 

47.9 

( . 73) 

a. Percent close to 

eye with ophthal- moloscope 82.7 91.3 76 . 6 

b. Number of 

Seconds 

Examining 

Each Eye 

with 

Ophthalmoscope 

25.2 33.9 

(1.91) 

22.9 

( • 4 5) 

c. Percent Using 

Slit Lamp 

19.0 39.0 

(1.88) 

9.0 

(1.18) 

a. Percent Osing 

Tonometer 

55 .0 61. O 

( . 5 7) 

64.0 

( . 8 0) 

3. Average Score ( % ) 

Vision Testing 

55.1 70.9 

(4.90) 

55 .6 

( . 15) 

a. 

b. 

Percent Using 

Re tinoscope 

Percent Giving 

Subjective 

Refraction 

77 . 3 

100.0 

90.4 

(2.83) 

100.0 

83.6 

( 1. 78) 

100.0 

169 (Footnote Continued) 

For further explanation of probit analysis , see H. Theil, 

Principl~s of Econometrics 628-31 (1971). 

71 
N = 104 N = 89 N = 50 

Source: Bureau of Economics 

As the chart above indicates , analysis of the componen ts 

of the eye examination reveals a pattern similar to that 

observed in the overall quality index scores, with some exceptions: 

(1) Chain firms used the retinoscope more frequently than 

did non-commercial optometrists in restrictive cities . 

This difference is statistically significant. 17 0 

(2) The data on use of the tonometer and the average vision 

testing scores run cou11te r to the general pattern; howeve r, 

the differences between chain firms and optometrists 

in cities without chain firms are not statistically 

signi ficant. 

(3) All optometrists performed a subjective refraction. 

Perhaps the most interesting of BE's findings on eye examination quality is the striking difference in performance between 

non-commercial practitioners in different environments. As 

stated above, the BE results show that non-commercial practitioners in non-restrictive markets performed examinati ons of 

better quality than their counterparts in restrictive cities when 

quality is measured in terms of thoroughness of examination. 

We have extracted this finding from the BE study data. ~ BE Study, supra note 127 at 1 2. This is a result, 

however, which BE did not report or attempt to explain 

in its study. 

72 

170 
The average scores of non-commercial optometrists on the major 

portions of the examination (case history, eye health exam, 

vision exam) was also significantly higher than the average 

scores of non-commercial optometrists in the restrictive cities . 

From these results BE has suggested that there may be two markets for vision care where advertising and commercial practice is 

permitted (that is, some consumers may not always desire a complete 

medical examination of the eye , but may just want to have a "vision" 

or acuity test). The presence of commercial practice and advertising 

does not lower the overall quality of examinations offered by all 

optometrists , but rather enables optometrists to differentiate 

among themselves and to signal the quality of examinations they 

offer. Because of competition from less expensive and more accessible commercial providers, non-commercial optometrists justify 

their higher prices and attract certain consumers by offering more 

thorough examinations. 17 1 

(While it may be true that less thorough examinations in non-restricti ve 

cities tended to be concentrated in the small advertisers and chain 

firm cells , there were just as many less thorough examinations in 

restrictive cities and, in all markets, the results showed a 

wide range in the level of thoroughness of eye examination within 

each type of optometrist.) 172 

Given that overall quality in restrictive and non-restri ctive 

171 BE Study, supra note 127 ,' at 61-63 . 

172 _lli BE study, supra note 127, at 9-11. 

73 
► 

markets was found to be about the same , a complementary explanation suggested by BE is that in restrictive markets where advertising and commercial practice are not permitted , there is no 

clear signal which enables consumers to differentiate among 

provide r s. Therefore , there is no incentive to provide more 

173 thorough examinations in order to attract consumers. Optometr i sts who are so inclined are able to give less thorough examinations but at higher prices than the same quality offered by 

non-adverti sers in commercial markets. 

The second aspect of quality, the accuracy of the prescriptions , was judged independently by the two consulting schools 

of optometry. Each school used the prescription derived from 

the pre- survey eye examination as a benchmark, against which 

the prescriptions obtained in the field were evaluated . Because 

an ophthalmic prescription is not a totally objective rneasure, 174 

two sets of clinical evaluations were obtained to assess the 

accuracy of prescriptions.175 

BE established four measurements of accuracy , based upon 

approval of the prescription by (1) PCO, (2) SUNY, (3) either 

school , and (4) both schools. The results were as follows: 

Estimates of 

173 BE Study , supra note 127, at 89. 

174 There is no single " accurate" prescription for an individual. See discussion on pp . 123- 131 , infra. 

175 Each school made a subjective judgment on the adequacy 

of the prescriptions for the subjects' visual needs . The 

schools disagreed in 36 out of 401 cases. 

74 
Percent of Prescriptions Judged Accurate 

(t-values in Parentheses) 

Restrictive Cities Non-restrictive cities 

Non-advertising Non- advertising Large 

Non-commercial Non-commercial Chain 

Practitioners Practitioners Fir ms 

Approved by PCO S4% SG% 

(1.43) (1.43) 

Aproved by SONY 76% 84 % 82 % 

(1.50) ( . 8 7 ) 

Approved by 82% 88% 86% 

Either School (1 . 17) ( • 5 2) 

Approved by 70 % 80 % 82% 

Both Schools (1.69) (1.66) 

N = 138 N = 103 N = 61 

Source: Bureau of Economics 

Under any standard chosen, commercial practitioners performed 

as well as non-commercial practitioners in restrictive cities. 

BE attaches greatest significance to "approved by either school" 

on the theory that approval by at least one of the schools is 

a reliable yet flexible standara. 1 7 6 We agree that this is 

probably the most appropriate standard to use. It is interesting 

to note, however, that under the most restrictive standard, 

176 Telephone conversation with Jack Phelan, Bureau of Economics, 

June 16, 1978. 

75 
p 

"approved by both schools," large chains scored significantly 

higher than optometrists in cities where commercial practice 

is restricted, and that this difference is statistically significant.177 

The third measure of quality was based upon an assessment 

of the eyeglasses which subjects purchased. The accuracy of 

the lenses purchased was evaluated against the written prescription, Lenses were compared to the prescriptions written by 

the examining optometrists even if the prescription itself was 

judged not to meet the subject's visual needs, because the quality 

issue under scrutiny in this phase of the study is the likelihood 

that an optometrist will produce a pair of eyeglasses in accordance 

with the prescription specifications. 

Consultants used an automatic optical focimeter (a device 

which measures the optical characteristic of corrective lenses) 17 8 

and lenses were judged accurate if they met the 1972 ANSI Z80,l 

standards for ophthalmic lenses. The ANSI standards establish 

tolerances, i.e., acceptable margins of error, for spherical 

power, cylinder power, axis, and pupillary distance,179 

In addition to the evaluation of lens accuracy based on 

177 We have extracted this finding from the BE Study data. 

This is a result, however, which BE did not report or attempt 

to explain in its study. 

178 For a more detailed description of an optical focimeter, 

see pp. 94-97, infra. 

179 For a thorough discussion of the ANSI standards and the 

questions arising from their. application,~ pp. 113-115, 

infra . 

76 
180 

the ANSI Standards, BE asked PCO and SUNY for a clinical evaluation of the adequacy of the lenses. 180 The results of both of 

these measures appear below: 

Estimate of 

Percent of Eyeglasses J udged Accurate 

(t-value in Parentheses) 

Restrictive Cities Non-restrictive cities 

Non-advertising Non-advertising Large 

Non-commercial Non-commercial Chain 

Practitioners Practitioners Firms 

Passed ANSI 

Standards 

50% 64% 

(1.52) 

Approved by 

both PCO and 

SUNY 

75% 82% 

( • 8 9 ) 

Approved by 

either PCO or 

SUNY 

84 % 86% 

( . 31) 

52% 

( .13 ) 

75 % 

(. 07) 

81% 

( • 3 5) 

In judging the performance of the optometrists in terms 

of the accuracy of the eyeglasses, the schools each made 

a clinical evaluation of the eyeglasses rather than using 

the ANSI standards as the measure of performance. In evaluating the accuracy of the lenses, the schools considered 

sphere-cylinder-axis accuracy and decentration accuracy. In 

addition to lens accuracy, the workmanship of the eyeglasses 

was evaluated (that is, whether there were imperfections 

such as bubbles on scratches in the lenses , whether there 

were imperfections in the frames, and whether the lenses 

were well-edged and well- mounted in the frames). (While 

poor workmanship may be the result of laboratory preparation, it is generally agreed that it is the dispenser ' s 

responsibility to check all lenses and eyeglasses prepared 

by the laboratory and to reject eyeglasses with signifi­ cant imperfections or inaccuracies.) See BE Study, supra 

note 127, at 79. 

77 
N = 75 N = 47 N = 29 

r 

Source: Bureau of Economics 

The most striking thing about the results presented in the 

chart above is the low pass rate under the ANSI standards. 1 81 

The comparison between commercial and non-commercial optometrists, 

however , reveals no significant differences in performance. 

The results of the clinical evaluation of lens accuracy show 

a similar pattern. 

In addition, lenses and frames were inspected for imperfections and checked to see that the lenses were properly edged 

and well mounted in the frames. 182 As with the evaluation of 

the prescriptions , both schools of optometry made a subjective 

judgment as to quality, thus producing four measures of workmanship, as indicated in the table below: 

Estimates of 

Percent of Ee lasses Jud ed Ade uate in Workmanshi 

t-value 1n Parentheses) 

Restr1ct1ve C1t1es Non-restr1ct1ve c1t1es 

Non- advertising Non-advertising Large 

Non-commercial Non-commercial Chain 

Practitioners Practitioners Firms 

181 The debate over use of the ANSI tolerances performance 

standard for optical dispensers is discussed on pp. 113-115, 

infra. 

182 Defects such as these may, in fact, be the fault of the 

optical wholesaler rather than the dispensing optometrist; 

however , the optometrist' s responsibility was defined to 

include the responsibility for checking the quality of 

goods which he or she sells. 

78 
Approved by PCO 

Aproved by SUNY 

Approved by 

Either School 

Approved by 

Both Schools 

54% 

75% 

81% 

48 % 

74% 

(2.11) 

83% 

( • 91) 

94% 

(2.05) 

61% 

( 1.37) 

53% 

( .13 ) 

77% 

( . 2 0) 

87% 

( • 7 2) 

43 % 

( . 4 9 ) 

N = 76 N = 49 N = 30 

Source: Bureau of Economics 

Here again, the results contradict the contention that 

commercial practice bans assure higher quality. There were 

no significant differences between chain firms and professional 

optometrists in restrictive cities. Non-commercial optometrists 

in cities with large chain firms had the highest approval rates 

under any of the four standards, and rated significantly higher 

than professionals in restrictive cities under both the "approved 

by either" standard and the "approved by PCO" standard. 

The final index of quality was the extent of unnecessary 

prescribing, sometimes referred to as "overprescription. " This 

was defined as the percent of examinations which resulted in 

a recommendation of new eyeglasses for subjects who arrived 

at their examinations wearing a prescription judged adequate (the 

so- called ''20/20" group) by the consulting schools of optometry. 

These subjects were instructed to inform the optometrists that 

they wanted new eyeglasses only if a new pair would "really 

make a difference" in their vision. 

Two definitions of overprescription were used. The first 

includes all cases where a "20/ 20" subject was i nstructed by 

79 
► 

the examining optometrist to buy a new pair. The second excludes 

those cases in which the examiner made an error in determining 

the patient ' s prescription. The latter definition is designed 

to capture only instances involving improper recommendat ions . 

Estimates o f 

Fr equency of Unnecessary Prescribing 

(Percent of Cases Where New Eyeglasses Recommended) 

(t-values in Parent heses) 

Restri cti ve Ci ties Non-restrictive cities 

Non- adve r tising Non-advertising Large 

Non-commercial Non-commercial Chain 

Practitioners Practitioners Firms 

All 20/20s 

N 

32% 

= 37 N 

9% 

(1.24) 

= 37 

14% 

( . 8 5 ) 

N = 24 

Those with 

correct Rx 

N 

36% 

= 25 N 

7% 

(1.24) 

= 28 

10 % 

( 1. 03) 

N = 20 

Source : Bureau of Economics 

Under either definition , chain firms showed no greater 

tendency to overprescribe, thus contradicting the allegation 

that commercial providers, because of their interest in profits, 

overprescribe with greater frequency than non- commercial providers . 183 

183 The differences in percentages wh i ch appear in the chart 

on p. 80 are not stat istically significant . It should be 

noted that , because of relatively small sample sizes , only 

substantial differences among types of optometrists will 

be stat istically significant . However , the direction of 

differences in these results runs counter to the hypothesis 

(Footnote Continued) 

80 

-
Finally , BE sought to determine whether price is related 

to guality. Regression analysis revealed a significant positive 

relationship between thoroughness of examination and price. 18 4 

Further analysis indicates that this price/quality relationship 

ho lds true for different types of practi tioners , but that at 

a given l e vel of exam quality, price is higher for professional 

optometrists than fo r large commercial firms. The other aspects 

of quality in the BE study did not correlate with price. 

The Begun study also focused on the quality issue . Quality 

of optometric service was measured by optometrists ' answers 

to survey questions concerning: (1) length of examination: 

(2) equipment available for use by the optometrist surveyed; 

and (3) examination procedures actually perfor med during an 

185 eye examination . As discussed earlier , the results of the 

survey indicated that all three quality measures were positively 

related to increased prices, that is, the price charged for 

an eye examination correlated wi t h the length of examination, 

183 (Footnote Continued) 

that chain firms overpresc ribe more frequently. Hence, 

it is unl i kely that large sample sizes would reverse this 

statistical finding . 

184 The price use in the equation was the total price for 

the examination and eyeglasses. 

185 These three measures of quality are "input " measures rather 

than "output" measures of quality. That is, they do not 

measure how well the practitioner performs his or her service in terms of accuracy of prescription and eyeglasses. 

81 
equipment available for use, and examination procedures performed.186 

Begun next sought to determine the correlation between 

quality as defined above and commercial behavior. Opponents 

of commercial practice argue that professionalism improves the 

quality of optometric service and that the prices charged reflect 

only this improved quality.187 To evaluate the relationship 

between quality and type of practitioner, Begun used a regression 

analysis which showed that all three of the quality measures 

were positively related to type of practitioner. For example , 

optometrists with high AOA involvement and those who did not 

advertise performed longer examinations with more individual 

186 It should be noted that while Begun's results indicate 

that there might be some quality difference, there ar.e 

several shortcomings in his study. One major criticism 

is that the study results are based on optometrists' 

responses to questionnaires mailed to them. Optometrists 

were asked questions about the prices they charge for 

an eye examination, the type of equipment they have available for use, the average length of examination, and what 

examination procedures are performed. While the responses 

given may be entirely accurate, the data used in the Begun 

study were not objectively obtained. An indication of 

the reliability of the price data was provided by a 1975 

survey of optometrists which produced a mean price for 

eye examinations. In that survey, the mean price was $23. 

The mean price for an examination in Begun's study was 

$24.35. Begun, supra note 123, at 50. The data received 

concerning equipment and procedures performed during an 

examination, however, were not ver ified. A second criticism 

of the Begun study is that the study offered no information 

in terms of patient outcome. 

187 As explained earlier, "professionalism" was measured by 

individual practitioner attitudes about advertising and 

commercial practice, involvement in the AOA, participation in continuing education programs, number of professional journals received and legislative restrictions on 

advertising and commercial practice. See notes 125 and 

156, supra. 

82 
procedures and had more examining equipment available.188 

Similar differences were found to exist between optometrists in 

states where commercial practice was restricted and optometrists 

in states where commercial practice was permitted . 189 

Since the data show that both higher quality (as it is 

defined in the study) and higher price are associated with advertising 

and commercial practice restrictions and optometrists with anticommercial attitudes, Begun sought to determine the effects 

of professionalism on p r ice independent of qual i ty differences. 

A regression analysis was conducted using a number of control 

variables which could be expected to have some effect on price 

such as year of gr aduation , patient income status and number 

of practitioners in the area. 19 0 

The results of the regression analysis showed that commercial practice and adverti sing restrictions and individual 

anti-commercial attitudes a r e positively related to price after 

account i ng fo r the effects of the control and quality variables.191 

Begun concluded therefore , that professionalism does have an 

independent and positive impact on price . At the same time , 

188 Begun , suera note 123 , at 73 . 

189 Id. at 75 . 

190 g . at 76-78. 

191 A total of 45% of variance in price is explained by the 

regression model. 21% of the variance is due to the control variances , while quality measures explain 14% . The 

remaining 10% of variance is accounted for by measures 

of professionalism. Begun , supra note 123 , at 79 . 

83 
however, the data also indicate that consumers may be getting 

a different type of service, that is longer, more thorough, 

and more technically advanced service from non- commercial 

optometrists.192 

4. Do Commercial Practice Restrictions Affect Accessibility 

of Vision Care? 

One measure of the accessibility of vision care is the 

frequency with which eyeglasses a r e purchased in a given period 

of time. The Benhams examined this issue in their 1975 study, 

taking into account factors which might affect the frequency 

with which eyeglasses are purchased. 1 93 The Benhams found that 

the likelihood of obtaining eyeglasses in a given year is greater 

in states with lower prices and that consumers purchase eyeglasses 

with greater frequency in the states termed less restricti ve 

or having l e ss professional contro1.194 

192 Commercial optometrists performed an average of 47.67 

examinations per week compared to professional optometrists who averaged 33.58. The examination length was 

24 . 17 minutes compared to 33.57 minutes for professionals; 

equipment available score was 2.83 compared to 4 . 09 ; and 

examination procedures score was 3.23 compared to 4.36 for 

professionals. Begun at 98-99. It is interesting to note, 

however, that the "no advertising" measuring of professionalism was not related to examination procedure. Begun, 

supra note 1 23 , at 85 . 

193 Individuals obtain eyeglasses periodically depending upon 

the rate of change in their vision, breakage or loss of 

eyeglasses and such other factors as income , price , age, 

sex , race and education. Benham & Benham, supra note 121 , at R . 6243 (p . 43 2) . 

194 The proportion of individuals obtaining eyeglasses was 

directly related to the price of eyeglasses. A 30 % increase 

in price resulted in a 28.5% to 34. 2% decrea se in the proportion of people buying glasses. The Benhams found that as 

(Footnote Continued) 

84 
Another factor which could affect the accessibility or 

availability of visi on care is the location or convenience of 

obtaining ophthalmic goods and services. A study commissioned 

by the California Optometri c Association (COA) 195 sought to 

evaluate what factors influence where a consumer decides to 

purchase eyeglasses. The COA study involved a randomly selected 

sample of 500 consumers who were asked to state whether certain 

factors196 were "very important," " somewhat important, " " rather 

important, " or " completely irrelevant" in their decision to 

purchase eyeglasses.197 Locational convenience, one of the 

factors selected for study, was considered an important factor 

194 (Footnote Continued) 

the mean price increases in the restrictive states , the 

percentage of people buying eyeglasses in a specified time 

period declines as much as 35%. In states with a lower 

level of AOA membership , per capita expenditures are 3% 

lower , but the frequency of purchase is increased , with 

36% more of the population obtaining eyeglasses during 

that time period. When multiple purchases of eyeglasses 

are taken into account, there is a 7% greater expenditure 

per capita for eyeglasses in non-restrictive states while 

50% more eyeglasses are obtained. Benham & Benham, ~upra 

note 121, at R. 6249-6251 (pp. 438-441). 

195 Statement of Dr. Harvey Adelman, HX 245. 

196 The factors considered were: 

1. reputation of doctor; 

2 . services provided by the doctor; 

3. price for examination ; 

4. price of frames provided by the doctor , and 

5. convenience of office location . 

Id. at p. 1 Results . 

197 Id. at p. 2 of Questionnaire. 

85 
► 

by consumers.198 

If location restrictions decrease the accessibility of 

vision care, these restrictions may decrease the frequency with 

which vision care is obtained. Some consumers may receive no 

care at all or may receive care less frequently than they othe rwise 

might. This is particularly true with respect to the elderly, 

whose mobility problems are greater than those of the popultation 

as a whole. 199 

P. Conclusion 

As we discussed above, the study conducted by the Commission's Bureau of Economics indicates that the quality differences 

between commercial and non-commercial optometrists may be far 

less significant than opponents of commercial practice have 

claimed . The BE study r e sults indicate that commer c ial optometrists perform as well as non-commercial practitioners in determining the proper eyeglasses prescription and in the quality 

of the eyeglasses dispensea.200 

The BE study results do not indicate that commercialists 

prescribe with any greater frequency than non-commercial opto198 The study results reveal that 23.4 % of the consumers surveyed 

considered this factor "very important" and another 42.6 % 

considered it somewhat important. Thus, overall, 66 % of 

the sample thought location to be an important factor in 

their purchase decision. Copy of computer results used 

by Dr. Adelman, HX 247. 

199 See notes 119 and 120, infra. 

200 BE Study, suEra note 127, at 14-20. 

86 
rnetrists.201 It appears that the extent of unnecessary prescribing 

of eyeglasses is a product of the merged role of the optometrist 

as both prescriber and supplier rather than a product of commercial practice or lay interference with a professional ' s judgment. 

The evidence in the BE study also contradicts the cla i m 

that the entry of commercial cha ins into the market brings about 

a lowering in the overall level of quality of vision care. 

BE found no evidence that professi onals in restrictive cities 

delivered higher quality vision care than professionals who 

faced competition from commercial practitioners. In fact, BE 

found that, on the average , professionals in non-restrictive 

markets provided eye examinations of higher quality than their 

counterparts in restrictive cities. 202 

One other conclusion based on the BE data seems warranted. 

There does not appear to be any support for the assertion that 

commercial practice lowers the aggregate level of eye examination 

quality in non-restrictive states vis-a-vis restrictive states. 

BE found that the overall level of eye examination quality , 

including the thoroughness of the eye examinations, was the same 

in both states which permit, and those which prohibit commercial 

practice. Commercial firms may offer a less thorough eye examination , but so do some professionals in restrictive states. 

201 Id. at 20. 

202 Id. at 14. 

87 
The results showed a wide range in the level of thoroughness 

of eye examination within each type of optometrist. 203 The 

difference is that io restrictive states , where all providers 

look alike, the consumer has no way to ascertain who is providing 

the less thorough exam . What is clear , however, is that prices 

are substantially lower in states which permit commercial practice 

and that in restrictive markets, there is a statistical likelihood 

that a less thorough examination will be given by a commercial 

provider. 

The results of the BE study suggest that commercial practice restraints do not, for the most part, protect consumers 

from lower quality care. Furthermore, BE found that prices 

were significantly higher in cities where commercial practice 

was restrictea2 04 and that for the same price , consumers received 

a higher quality eye examintion (as measured by the study) in 

non-restrictive cities than in restrictive markets. 205 While 

it is true that for higher prices consumers received a longer, 

more thorough eye examination from higher-priced optometrists, 

it is far from clear that the overall costs of commercial practice restrictions are offset by increases in quality. For some 

individuals the choice may be between a less thorough eye examination at a lower price or no examination at all. The higher 

203 g. at 9. 

204 Id. at 4. 

205 1£. at 25. 

88 
cost of a thorough eye examination may prevent some consumers 

from receiving any vision care at all . 

The final staff report in the Eyeglasses I proceeding noted 

that high prices prevent many persons (particularly the elderly206 

or those who live on fixed incomes) from obtaining eyeglasses. 207 

A recent survey of American families found that inflation had 

forced some to forego the purchase of new eyeglasses. 208 

As we noted in the introduc tion to this Staff Report, a 

true assessment of the quality of this nation's health care 

must take into account not only the level of quality for those 

that receive care, but also the number of persons who do not 

receive any care. Commercial practice restraints, which increase 

206 In 1976, the House of Representatives Subcommittee on 

Health and Long-Term Care of the Select Committee on Aging 

conducted hearings on the needs and costs for the elderly. 

The AOA submitted a statement concerning the unmet v ision 

needs of the elde rly: 

"[W]e find too many elderly Americans 

who count up their remaining change 

at the end of a month and say to themselves that they cannot afford to have 

their eyes exami ned, they cannot afford 

to have spectacle frames repair ed , they 

cannot afford new prescription lenses. " 

Medical Appliances for the Elderly: Needs and Costs , Hearings before the Subcornm. on Health and Long-Term Care 

of the Select Comm. on Aging, House of Representatives 94th 

Cong., 2d Sess. 156 (June 24, 1976) (statement of American 

Optometric Association). 

207 Staff Report, supra note 1, at R. 24521-24524 (pp . 149- 52. 

208 Keran, U.S. Health Profile, Washington Post , Apr. 26, 1979, 

at. Cl, col. 4 . 

89 
209 

the cost of vision care, may have a significant negative effect 

on the overall quality of care. 

We believe that there may be a less restrictive and less 

costly (in terms of economic injury to consumers) means of protecting consumers from the dangers which may result from lower 

quality vision care than banning commercial practice. This 

less restrictive alternative would be a regulatory scheme which 

is aimed more directly at the quality of services consumers 

receive. For example, a more efficient way for states to insure 

standards of quality may be through direct regulation of examination procedures. To the extent that commercial firms are 

found to provide less thorough eye examinations, the states 

might establish minimum standards for office equipment and examination procedures. A number of states have already adopted 

this approach.209 

Similarly, regulations could be designed to remedy perceived abuses which might arise from the nature of the commer-

~, ~, N.J. Rev. Stat. § 45-~2-ll(v), .a~d New Jersey State Board of Optometry Regulations, Exh1b1t IV-32. The 

New Jersey statute requires that: 

Prior to prescribing for or providing eyeglasses or spectacles a complete minimum 

examination shall be made of the patient 

to determine the corrective lenses necessary for such a patient. Id. 

The New Jersey State Board of Optometry has enumerated 16 

tests which constitute the minimum examination. See also 

Rules and Regulations of the Michigan State Boardof - Examiners in Optometry, Section 338.262, Exhibit IV-23 

(specifies seven items of equipment which optometrists 

are required to "have and use"). 

90 
cial setting . For example , one legislative proposal in the 

state of Ohio included the following provision (in a bill spe ­

cifically permitting commercial optometric practice) to prevent 

employers from interfering in the doctor- patient relationship: 

The Board (of Optometry] shall not make any 

rule prohibiting, limiting, or restricting 

the location where the practice of optometry 

may be conducted or affecting the right of 

an optometrist to seek and obtain employment with any person , organization or asso­ ciation provided that licensed optometrist 

is the individual who performs the practice 

of optometry as defined . •• (elsewhere 

in Code of Optometry . ] In the event that 

any person, organization, or association 

employing a licensed optometrist is found 

by a court of competent jurisdiction to 

be interfering with the proper exercise 

of the professional judgment of a licensed 

optometrist in the practice of optometry, 

the Board may forbid any licensed optometrist from seeking and accepting employment 

with such person , o r ganization , or association for a specified and limited period of 

time to be determined by the board. 210 

In sum, many of the quality justifications raised by advocates of commercial practice restraints appear to be without 

merit. The ev idence contained in the BE study (which is corroborated by the findings of the Begun study) indicates that 

the alleged quality differentials simply do not exist in most 

aspects of v ision care services. The a rguments concerning the 

thoroughness of eye examinations do raise a serious concern. 

However, there is reason to believe that a more appropriate 

solution may be found in more direct regulation of any perceived 

H.B. 432, 111th Ohio General Assembly, Regular Session 

(1975-76) , Exhibit IV-144 at R. 6204. 

91 

210 
abuses , rather than broad restrictions aimed at banning commercial practice altogether. On the basis of these findings, 

we believe the proposing of a trade regulation rule is warranted, 

both to test the validity of our evidentiary findings and to 

provide a forum for discussion and debate on the implications 

of those findings. 

92 
II. Restrictions on the Duplication of Lenses by Opticians 

A. Introduction 

Many consumers who wear prescription eyeglasses will at 

some time wish to purchase a second pair of eyeglasses for fashion 

related reasons or as a spare pair. Other consumers will want 

to buy prescription sunglasses. Yet others will break or scratch 

their eyeglasses and need replacements. Consumers facing one of 

these situations have a number of options from which to choose: 

1. They can undergo an eye examination , obtain a prescription and purchase new eyeglasses; or 

2. They can return to the person who filled their original 

prescriptions for their new eyeglasses; or 

3. They can go to a different provider and have their new 

eyeglasses prepared from their old lens prescription; 

or 

4. They can go to a new provider (most likely an optician) 

and have their new eyeglasses duplicated from the original 

pair. 

The option whi c h the consumer chooses will cost varying 

amounts and will subject the consumer to varying problems. 

The fir.st option, obtaining a new eye examination , will on the 

average cost $25 in addition to the cost of the new eyeglasses. 1 

Under. the second option, the consumer would not incur. the 

expense of the new eye examination, but would have to return 

to the provider from which he or she originally purchased eyeJames W. Begun, Ph.D., Professionalism and the Public 

Interest: Price and Quality in Optometry. (Ph.D. dissertation, University of North Carolina) (June 1977) [hereinafter cited as Begun]. Begun determined the average 

cost of an optometrist's exam to be $24.35. Id.at 50. 

93 

1 
glasses. If the consumer has moved to a new city, this may 

be impossible. In other instances, the consumer may wish to 

shop around and seek out another provider who offers the 

desired cost and quality of service. Thus, although under this 

option consumers will not incur the expense of a new eye examination, they may not be able to capitalize on the increased 

competition and information in the optical market. 

Under the third option, consumers can seek out the best 

buy only if they still have their prescriptions (or can obtain 

them from their original examiners or dispensers). As we discuss 

below, there is reason to believe that many dispensers of eyeglasses will not provide consumers' lens specifications to new 

provide rs. 

The fourth option, lens duplication, is illegal in a number 

of states. In this section, we discuss the issues raised by 

state laws and regulations which prohibit opticians from replacing 

broken lenses, or duplicating an entirely new pair of eyeglasses 

from an existing pa ir, without having a signed prescription 

from an optometrist or ophthalmologist.2 

B. What is Lens Duplication? 

The process of duplicating lenses without a prescription 

is accomplished with a device called an "optical focimeter "3 

2 In this section and throughout the staff report, the term "duplication" refers to the process of making a new lens 

or pair of eyeglasses by neutralizing an existing lens 

or pair of lenses. 

3 Two widely-useC manual optical focimeters are the ''Lensometer " 

(Footnote Continued) 

94 
which measures the optical characteristics of spectacle lenses. 

Bausch and Lomb, which manufactures an optical focimeter under 

the trade name "Vertometer," describes the capabilities of its 

device , and generically the capabilities of manual optical focimeters, in the following manner: 

The Vertometer is an optical instrument used 

to determine the optical characteristics 

of ophthalmic lenses . It is used to check 

the power , axis, centering , etc. , of lenses 

which have been surfaced and also to determine the optical characteristics of lenses 

which are to be duplicated . 

• . • The instrument consists of a light 

source, a movable target, a lens holder, 

and a telescope. By looking into the eyepiece, with the lens to be measured in the 

proper position, the target can be brought 

into focus by adjustment of the position of 

the target. This adjustment is accomplished 

by manipulation of the various dials of the 

instrument.4 

The process of determining the power of an ophthalmic 

lens through the use of an optical focimeter is commonly termed 

"neutralization. " The term derives from the fact that the technician "neutralizes" tbe refractive power of the lens being 

measured by bringing the " target " of the optical focimeter into 

focus . In essence, the technician has determined the power 

3 (Footnote Continued) 

manufactured by American Optical and the "Vertometer " manufactured by Bausch and Lomb. See Opticians Association 

of Ame r ica, Technical Specifications and Operating Instructions for Selected Optical Focimeters (1978) for technical 

descriptions of these instruments. 

4 Id. at Section B. 

95 
r 

necessary to neutralize the lens being measured --that power 

being equal to the power of the lens itself. 

It is important to note that the process of verification 

(by which an optician measures the accuracy with which the initial 

lenses were prepared by an optical laboratory) is functionally 

identical to the process of duplication.5 That is, what an 

optician does to verify the accuracy of a lens prepared to fill 

an optometrist ' s or ophthalmologist ' s prescription is precisely 

what he or she does to duplicate eyeglasses. Indeed, it is 

the same process used by an optical laboratory to determine 

whether the correct prescription has been ground into the lenses 

being prepared. 

There are two different kinds of optical focimete r s: manual 

models (such as the Bausch and Lomb "Vertometer" described above), 

and automatic models which employ more sophisticated technology . 6 

5 Id. 

6 See , ~-, technical description of the "Acuity Systems 

Auto-Lensmeter , " id. at Section C. This automatic 

focimeter is described in the following terms by its manu­ facturer: 

The AUTO-LENSMETER is the first, fullyautomated instrument for measuring the 

optical properties of ophthalmic lenses - including sphere, cylinder, axis, prism, 

optical center, and waves. 

Combining push-button ease with advanced 

laser t echnology and micro-computer precision , the AUTO-LENSMETER measures and computes optical prescriptions to 0.25, 0.12, 

or 0.01 diopter accuracy. These measurements are instantaneously displayed on a digital screen. An optical printer can docu- (Footnote Continued) 

96 
Manufacturers of the automatic focimeters contend that these 

newer, more expensive devices can be used with a high level of 

accuracy by anyone with a minimal amount of training. 7 

C. Analysis of State Laws 

It is often difficult to determine whether or not a state 

permits the duplication of lenses solely by examining the state 

statutes and regulations. In the clearest cases, the process 

of duplication is specifically prohibited or allowed. In other 

instances, bans on duplication are achieved through state legislation which defines the adaptation of eyeglasses to the face 

without a written prescription to be the practice of optometry 

6 (Footnote Continued) 

ment each measurement on paper tapes or 

lens envelopes. 

7 .•• [T]he new Lens Analyzer makes splitsecond measurement of the sphere, cylinder, 

axis and prism and displays the results 

digitally in standard prescription notation. 

The instrument automatically computes the 

prism in each lens and calculates the relative prism in the spectacles as a pair • 

. . . Experience by users of the instrument .•. has shown that persons without 

prior training can accurately operate the 

Lens Analyzer with less than one hour's 

instruction. The computer's speed and simplicity of operation allow greater office 

efficiency and increased lab productivity 

by eliminating several calculations previously done by hand ..•• A complete 

lens pair analysis ... can be completed 

in two to four seco~ds. 

Advertisement for describing Humphrey Instruments, Inc ., 

"Le ns Analyzer, '' in 20 / 20, at p. 56 (May - June 1978). 

97 
and prohibits opticians from practicing optometry.a Frequently, 

these state laws also include an e xemption from the optometric 

p r actice act for providers such as medical doctors and opticians. 

However, it is often dif ficult to ascertain the scope of that 

exemption in actual p r actice (~, whether it would permit 

opticians to duplicate lenses). 

States fall into three categories with respect to the 

legality of duplication by opticians. Ten stat es proscribe 

the duplication of lenses. 9 Approximately fifteen states spec i fically authorize opticians to duplicate lenses. 10 Twentyfive states and the Distri ct of Columbia have state laws which 

are eithe r ambiguous or are silent on the question of duplication . 11 It appears that opticians are duplicating lenses in 

those states where the statutes are ambiguous or silent on this 

question. 

8 See , ~-, Ark. Stat. Ann . Tit. 72, § 72-801 ( "The profession aria the p r actice of optometry is hereby defined to 

be. • . • (a)ny person .. . who prescribes, dispenses, 

••• or duplicates lenses, .•. shall be deemed to be 

engaged in the practice of optometry. " ) 

9 Arkansas, California, Idaho, Indiana , Kansas , Louisiana , Maine, Montana, Oklahoma , and Oregon . 

10 Connecticut , Florida, Georgia, Hawaii , Kentucky, Minnesota , Montana , New J ersey, New Mex ico , North Carolina , Rhode I sland, 

Vermont, Virgin i a , Wisconsin and Wyoming. 

11 Alabama , Alaska , Arizona , Colorado , Illinois, Iowa, 

Delaware, District of Columbia, Maryland, Montana , Nebraska, New Hampshire, New York, North Dakota , Ohio, 

Pennsylvania , South Caro lina , Tennessee , South Dakota, 

Texas , Utah , Washington, and West Virginia . 

98 
In a landmark case, Williamson v. Lee Optica1 , 12 the Supreme 

Court considered the constitutionality of an Oklahoma law which 

prevented opticians from duplicating lenses by defining the 

process of duplication to be the practice of optometry. The 

District Court in Williamson had struck down the law on due 

process grounds, holding that the ban on duplication was " neither 

reasonably necessary nor reasonably related to the end sought 

to be achieved" by the state.13 

In reversing the District Court decision , the Supreme Court 

capsulized the policy issues and state justifications whi c h 

underlie restrictions on the duplication of lenses: 

The Oklahoma law may exact a needless, 

wasteful requirement in many cases . But 

it is for the legislature, not the courts, 

to balance the advantages and disadvantages 

of the .. . requirements. It appears that 

in many cases the optician can easily supply the new frames or new lenses without 

reference to the old written prescription. 

It also appears that many written prescriptions contain no directive data in regard 

to fitting spectacles to the face . But in 

some cases the directions contained in the 

prescription are essential, if the glasses 

are to be fitted so as to correct the eye 

condition. The legislature might have concluded that the frequency of occasions when 

a prescription is necessary was sufficient 

to justify this regulation of the fitting 

of eyeglasses. Likewise, when it is necessary to duplicate a lens , a written prescription may or may not be necessary. But the 

legislature might have concluded that one 

was needed often enough to require one in 

12 348 U.S. 483 (1955). 

13 Lee Optical v. Williamson, 120 F. Supp. 128, 137 (W . D. 

Okla. 1954). 

9 9 
every case. Or the legislature may have 

concluded that eye examinations were so 

critical, not only for correction of vision 

but also for detection of latent ailments 

or diseases, that every change in frames 

should be accompanied by a prescription from 

a medical expert.14 

The justifications advanced in support of state-imposed 

bans on duplication are, as stated in Williamson, twofold: 

1. In some cases , opticians may not be able to 

duplicate eyeglasses accurately without reference to the written prescription, and 

2. In some cases, duplication may be used by 

consumers (either intentionally or unintentionally) to bypass the examination process. 

This may result in eye diseases or other 

visual abnormalities remaining undetected. 

Virtually no reliable data either supporting or refuting 

the proffered justifications exist. We have been unable to 

locate any research testing the validity of the first of these 

justifications and do not believe that any exists. The only 

evidence bearing on the ability of opticians to duplicate lenses 

accurately, consists of the reported experiences of individual 

opticians1 5 (who uniformly testified that duplication can be, 

14 348 U.S. 483, 487 (1955). 

15 See,~-, Testimony of Robert Troast, Tr. 2007 at 2029; 

testimony of Paul E. Alony, Tr. 2544 at 2548; t estimony of 

Alfred P. Rosati, Tr . 27748 at 2784; testimony of Norman G. 

Michaud, Tr. 2789 at 2817; testimony of Doug Mathews, 

Tr. 4459 at 4483-84; testimony of Berry C. Lofland, Tr. 

5510 at 5525; testimony of E. Logan Goar, Tr. 5550 at 

5572-73; testimony of John H. Burns, Tr. 5582 at 5591-92; 

testimony of Stephen Lee Adams, Tr. 6035 at 6051; statement of Stanley C. Pearle, O.D., Exhibit V-5 at 500022 . 

100 
........ ------------------------- - - ----

and is done accurately) and optometristsl6 (some of whom contended 

that duplications were not being performed accurately in jurisdictions where duplication is permitted) . As we discuss below , 

there are some limited data addressing the second justification. 

D. The Duplication Market -- Why Do Consumers Seek Out Duplication 

Services? 

In the introduction to this section , we discussed the 

options which a consumer might have in seeking to purchase duplicate or replacement spectacle lenses. The viability of these 

options is critical to an understanding of why consumers seek 

out duplication services. We will discuss the economic considerations which attend those choices and other factors which 

may affect their viability. 

The first option available to a consumer is to obtain a 

new eye examination and then purchase new eyeglasses , or the 

new form of eyeglasses(~. , sunglasses, a second or "fashion" 

pair , etc.) they want. The primary consideration in exercising 

this choice is the cost. The most recent data show that the 

average cost of an eye examination by an optometrist is approx i16 In a study conducted by a group of optometrists called "Flor ida 

Gulf Coast Eye Care" a number of prescriptions wer e prepared 

into glasses, with the glasses subsequently being taken to 

opticians ' establishments for duplication. The group concluded 

that the duplications were not being per formed accurately , and the duplication should therefore not be permitted . Florida Gulf Coast Eye Care, Eyeglass Duplication Project 

(1977). Both the methodology and the ultimate results 

of this study have been seriously questioned by the Floria 

Board of Dispensing Opticians. Letter from Allen R. Smith, 

Jr. and Dale G. Bennett, Florida Board of Dispensing Opticians 

to the Division of Special Projects, Bureau of Consumer 

Protection, Federal Trade Commission (Nov. 16, 1977). 

101 
mately $25.17 Thus , the consumer will have to pay for the eye 

examination and the new eyeglasses . In some situations, the 

eye examination expense is clearly unnecessary. For example, 

if a consumer obtains an eye examination and new eyeglasses, 

and shortly thereafter decides to purchase a pair of prescription sunglasses, a new eye examination would not be necessary. 

Yet, if the consumer chose this option , he or she would unnecessarily spend an extra $25. As we will discuss below, this may 

be the only option available to the consumer in a significant 

number of states. 

If a consumer wishes to avoid the expense of undergoing a 

new eye examination (we will discuss later in this section 

the ''quality" implications of facilitating the purchase of eyeglasses without undergoing a new eye examination) , he or she can 

return to the person who filled his or her original prescription 

and obtain the new eyeglasses. 

There are two fundamental problems with exercising this 

choice. If a consumer moves to another city , or even moves 

to a different l ocation in part of the same city , he or she would 

incur substantial costs in returning to the original eyeglasses 

provider. And if a consumer scratches or breaks his or her eyeglasses while out of town, he or she cannot obtain an emergency 

replacement from the original provider. 

Second, if forced t o return to the original provider, conBegun , sup r a note 1, at 50 . 

102 

17 
sumers cannot shop for a better bargain. Consumers seeking 

a second pair of eyeglasses to serve as a spare might wish to 

take advantage of the increased advertising and the lower-cost 

alternatives now available.18 

The second way a consumer might avoid the cost of new eye 

examinations is to select a new dispenser and have new eyeglasses 

prepared from his or her original prescription. Two problems 

are likely to be encountered in exercising this option. First, 

although under the terms of the Eyeglasses I Rule optometrists 

and ophthalmolgists are required to offer prescriptions to con19 sumers upon completion of eye examinations , the persons who 

fill those prescriptions (whether the eye doctor or an optician) 

may retain the prescriptions after filling them. 20 So if consumers select new providers they may not have their original 

lens specifications from which to obtain new eyeglasses. 

Moreover, even when consumers ask for their prescriptions 

to be r eturned after they purchase eyeglasses, the documents 

which they receive frequently are not "fillable" prescriptions. 

In a study of optometrists conducted by the Bureau of Economics 

18 Many providers offer complete eyeglasses for prices in 

the vicinity of $25, although usually with a limited selection of frames. See,~-, Spring Optical, an Advertising 

Supplement to the Washington Post, March 20, 1980 . 

19 16 C.F.R. § 456.7. 

20 For example, one large commercial chain provides patients 

with a carrying card (unsigned) with a notation that the 

original prescription is on file at the store wher e the 

original eyeglasses were purchased. 

103 
(BE study) , survey subjects were instructed to ask that their 

prescriptions be returned to them after they had purchased 

eyeglasses. 21 Analysis of BE ' s data shows that in a small 

number of cases, t he shoppers were refused their prescriptions.22 In a higher percentage of cases, the document that 

was r eturned to t he survey subjects was a laboratory work order 

or an unsigned copy of the prescription. 23 In all probability, 

these laboratory orders and unsigned prescriptions could not 

be legally filled by a subsequent provider. 24 Thus, notwith21 Bureau of Economics , Federal Trade Commission, Economic 

Report - - Effects of Restrictions on Advertising and Com­ mercial Pr actice in the Professions: The Case of Optometry 

(September 1980) at Part III, Section 2, "Field Procedures ." 

[here1natter cited as B~ studyJ. 

22 The number of actual refusals was small , approximately 7 of 280 total observations, or 2.5%. Since survey subjects 

asked that there prescriptions be returned to them, we do 

not know whethe r the dispensers would have returned the 

prescript ions absent the request. 

23 The number of wo r k orders or unsigned prescriptions was 

58 out of 280 , or approximately 21%. Copies of all the 

prescriptions received by the survey subjects in the Study 

are contained in the public recor d . 

24 Most states do not define what constitutes a prescription . Rather , the state law simply states that an optician may 

fill a "valid written prescription" from an ophthalmologist 

or optometrist. In only a few states is the requirement 

that a prescription be signed by the examiner made explicit . See,~- , Rules of the New York State Board of Regents 

Relati ng to Definitions of Unprofessional Conduct, Effective October 1 , 1977, § 29.8 ; Proposed Rules of the Virginia 

State Board of Examiners in Optometry , Section I(C) ( "A 

prescription for ophthalmic goods means an order written 

and signed . •. " ). (emphasis added) 

However, by analogy most states explicitly require medical 

prescriptions to be signed by the prescriber, See Mass. 

Gen . Laws. Ann. Ch. 112 , § 12 D (Supp. 1979) (West); Conn. 

(Footnote Continued) 

104 
standing specific requests for return of their prescriptions, 

consumers were not able to obtain "fillable" prescriptions. 

There are three reasons for refusing to release the prescription after filling, two of which are exp ress and one of 

which is implicit. 

1. Many dispense r s, particularly eye doctors, question 

the advisability of obtaining new eyeglasses from an "outof-date" prescription. The validity of this reason for 

refusing to release the prescription is obviously contingent on the length of time which has elapsed since the 

original eye examination. 

2. Many dispensers retain the original prescription for 

malpractice purposes. That is, they retain the prescription 

as proof that they filled the prescription correctly. 

By retaining the original prescription, they can compare 

their work against the original prescription. The pro- vider may give the consumer a carrying card or other document 

containing the original lens specifications, but in states 

which preclude duplication without a prescription, such 

a documen t if prepared by an optician could not be filled. 

3 . The unstated reason for not releasing prescriptions, 

particularly upon the telephone request of a new provider, 

is the fear of losing the patient to a competitor. By 

24 (Footnote Continued) 

Gen . Stat. Ann. § 19-457 (West); Ca l. [Bus. & Prof.] Code 

§ 4036 (Supp. 1980) (Deering) . (The analogy we are drawing 

here is the relationship between the physician and the 

pharmacy and the relationship between the ophthalmologist 

or optometrist and optician, not the relationship between 

the ophthalmologist or optometrist and optical laboratory.) 

The reason most states are silent on whether an eyeglass 

prescription must be signed may be that most optometrists 

have traditionally filled their own prescriptions. Nevertheless, those states that are not silent on what constitutes 

a valid eyeglass prescription require a signature, and signatures are required for most medical prescriptions; therefore, we may infer that a prescription would not be valid 

unl ess it is signed. A further clarification of what constitutes a valid prescription will be elicited during rulemaking. 

105 
releasing the prescription, the original provider is giving the consumer the means needed to seek out another provider. 

As we will discuss below, we believe that the failure of 

the original dispense r of eyeglasses to return a fillable prescription to the patient, at least upon request, is an unfair 

act or practice. 

The final option available to consumers is to have their 

current eyeglasses lenses duplicated. However, at least ten 

states prohibit this option, and questions have been raised 

concerning the "quality" of eyeglasses produced by duplication. 

In addition, some people contend that consumers use the duplication process as a means of bypassing the eye examination 

process. We will discuss t hese issues at length in the sections 

which follow. 

The market for lens duplication services is a substantial 

one. The most recent data show that opticians' sale of spectacle 

lenses account for approximately 920 million to one billion 

dollars annually. 25 In 1979, the Opticians Association of America 

(hereinafter "OAA") conducted a survey of member firms to e licit 

information about optical dispensing services offered to consumers 

(including the duplication of eyeglasses by neutralizing existing 

lenses) and a survey of consumers to determine, among other things, 

the reasons why they wanted to have their eyeglasses duplicated 

Bureau of Consumer Protection, Federal Trade Commission 

Staff Report on Advertising of Ophthalmic Goods and Services 

and Proposed Trade Regulation Rule, Exhibit III-2 at R.24397 

(p. 25), n.83 (May 1977) [hereinafter cited as Staff Report]. 

106 

25 
T 

and the date of their most recent eye examination. The procedures 

employed by the OAA in gathering these data are discussed in 

the note below.26 

The members of the OAA report approximately 10 to 11% of 

their total receipts were via duplication (as opposed to sales 

arising from the initial filling of a prescription). 27 A rough 

calculation would be that the market for duplication services 

is approximately $100 million dollars annually. 

In the chart below, we show the percentage of OAA members' 

business attributable to duplication serv i ces. 

CHART 2-128

26 The study conducted by the OAA started with a sample of 

921 member firms. Of these , 577 responded to the questionnaire with 444 indicating that they do duplicate lenses 

and 113 indicating that they do not. 

The Opinion Research Corporation, who conducted the study 

for the OAA , also asked member firms in states which permit 

lens duplication by opticians to provide it with the names 

and addresses of customers for whom they had duplicated 

eyeglasses. The names of 1200 consumers who had purchased 

duplication services were submitted . The OAA then conducted 

a mail survey of those 1200 consumers. 408 consumers responded 

to the survey, and the analysis of consumer purchasing attitudes is based on th i s sample of 408. (An analysis of non­ respondents , and the selection criteria for the original 

sample of 1200, will be supplied to the Commission for 

critical analysis .) Letter from J.V. O'Neill, Director, 

Government Relations , OAA, Terry s. Latanich, Attorney, 

Federal Trade Commission with results of both surveys attached 

(May 1, 1980) [hereinafter "OAA Submission " ). 

27 OAA Submission , at p. 1. 

28 Id. 

107 
--

OAA member firms were asked , 29 "What percentage of the total number of pairs of prescription eyeglasses that your f i rm sold 

in the past three years were made up on the basis of prescrip­ tion elements obtained by 'neutralizing' an existing lens or 

lenses rather than written or oral instructions from a refrac- tionist? " 

Their responses were: 

More 

Than Not 

Year 1% 2% 3-5% 6-10% 10% Reported 

1978 21 % 11% 18% 12% 25% 13% 

1977 20 % 9% 17% 12% 22% 19% 

1976 19 % 9% 17% 13% 19% 22% 

The typical or average respondent said that 11% of the pairs 

he or she sold in 1978 were attributable to " neutralization ." 

Corresponding figures for 1977 and 1976 were 10% of total pairs 

sold. 

The data show that the duplication market is a large one, 

both in terms of consumer expenditures and the number of transactions involved. On the question of why consumers obtain duplication services, the data show two primary reasons. First, 

in almost half the instances of duplication, consumers were 

obtain ing replacements for broken lenses or frames. Other 

reasons cited for purchasing duplication services include the 

desire to obtain prescription sunglasses or a second pair of 

eyeglasses for fashion or other reasons. In interviews with 

over 400 consumers who had obtained duplication services, the 

OAA found the following reasons to be the most prevalent for 

Although this question was asked of member firms in all 

states, only firms in states which permit opticians to 

duplicate eyeglasses responded to this question. 

108 

29 
obtaining duplication services. 

CHART 2-23 0 

Consumers were asked , "Why was the lens or pair of eyeglasses 

duplicated?" Their responses were: 

Reasons: 

Total Lens 

Duplication 

Consumers 

(Base: 408) 

Total Male 

Lens Duplication 

Consumers 

(Base: 197) 

Total Female 

Lens Duplication 

Consumers 

(Base: 211) 

Wanted to 

replace a 

broken , cracked 

or scratched 

lens 25% 32% 18% 

Wanted to 

replace a 

damaged frame 

Wanted prescription sunglasses 

19 

24 

21 

22 

1 7 

26 

Wanted a 

second, more 

fashionable, 

pair 23 16 29 

Wanted a 

second pair 

for backup 

purposes 18 18 19 

Other 17 19 15 

Note: Many respondents gave more than one reason for having 

their eyeglasses duplicated. 

While it is possible that the OAA data are not wholly precise in their ordering of reasons for obtaining duplication 

services, we believe they do corroborate the widely-held beliefs 

30 Id. at p. 4. 

109 
within the industry concerning the reasons why consumers seek 

out duplication services. 

Another issue involving duplication is the effect that 

obtaining duplication services has on the frequency with which 

consumers obtain eye examinations. As stated earlier, an 

assertion frequently offered in support of bans on duplication 

is that consumers use duplication as a means to bypass the eye 

examination process. The OAA attempted to address this issue 

in their survey. They asked a sample of 400 consumers who had 

obtained duplicate eyeglasses when they had last undergone an 

eye examination. The data show that 74% of the consumers surveyed 

had obtained an eye examination within the two years prior to 

the time they purchased the duplicate eyeglasses; over 84 % had 

obtained an eye examination within three years of their purchase. 31 

These data raise a question concerning the validity of 

the assertion that duplication services ar e being used as a 

substitute for regular eye examination. They do not resolve 

the issue definitely, however, for the data fail to follow 

these persons to determine the period of time which elapsed 

after they purchased their duplicate lenses before they obtained 

another eye examination. Thus, we cannot tell with certainty 

whether the intervening duplication altered the frequency of 

eye examinations . 

E • The Duplication Study 

OAA Submission, supra note 26, at p. 5. 

110 

31 
To address the ''quality" variable, that is, the accuracy 

with which opticians duplicate lenses, we designed a shopper 

survey of optician establishments. Although the methodology 

and results of this study are contained in the final study 

report, 32 we will describe the basic survey methodology and 

the general results of the survey. 

The survey was conducted in two states which permit opticians 

to duplicate eyeglass lenses: New York (which licenses opticians 

and has a proficiency examination as part of its licensing process) 

and Pennsylvania (which does not license opticians nor require 

any demonstration of proficiency as a condition of practice). 

A random sample of 390 opticians was drawn from the Yellow Pages 

of the New York and Philadelphia metropolitan areas.33 

Three categories of lenses were used in the study: " lows " 

which are relatively low-power spherocylinders; "mediums " which 

are medium power spherocylinders; and "prisms , " which are medium 

34 power spherocylinders with prisms . These three categories 

wer e chosen to represent varyi ng degrees of difficulty in the 

duplication process. The theory was that the more severe the 

prescription involved , i.e . , the higher the diopter power of 

32 A Comparison of a Random Sample of Eyeglasses, prepared 

by Resource Planning Corporation for the Bureau of Consumer 

Protection, Federal Trade Commission (July 1979) [hereinafter 

cited as Duplication Study]. 

33 Duplication Study at 2. 

34 The optical characteristics of each of these categories 

a re set forth contained in Appendix A of the Duplication 

Study. 

111 
the sphere and cylinder or whether a prism was present, the 

more difficult it might be to duplicate the lens correctly. 

For the purposes of our study , we purchased complete pairs 

of eyeglasses, identical within each category with respect to prescriptive power and f rame type. The Commission ' s consultant 

for technical issues on this study, the Chairman of the ANSI 

Z80.l Subcommittee on Ophthalmic Lenses, measured the power of 

each lens using an Acuity Systems Auto- Lensmeter. One lens 

in each pair of eyeglasses was scratched to provide the "reason" 

for having the lens duplicated. After survey subjects posing 

as consumers obtained the duplication services, the eyeglasses 

were returned to our consultant and the power of both the control lens (the non-dupl i cated lens) and the duplicated lens 

were measured and recorded. 

A questionnaire was then sent to each optician in our sample 

to determine the optical characteristics of the lenses as ordered 

by the optician. 35 Thus , for each purchase we have three measurements: (1) the amount of variation resulting from "measurement 

error " by the optician (i.e., the difference between the lens ' 

actual strength and the strength of the lens ordered by the 

optician) ; (2) the amoun t of " fabrication error " (i.e., the difference between the optical characteristics of the lens as ordered 

by the optician and those of the lens produced by the laboratory); 

and (3) the II total error 11 (i.e. , the combination of the measurement 

35 A copy of the questionnaire is contained in Appendix C 

of the Duplication Study. 

112 

-
error and the fabrication error). In the charts which appear 

in the next section, unless otherwise noted, calculations are 

based on the " total error" figure. 

The standards which we employed to determine whether the 

lenses were properly duplicated are the 1979 ANSI ZB0.l Standard 

for Ophthalmic Lenses.36 We selected this standard because 

it appears to be the only generally accepted national standard 

for lens tolerances. The standard is designed as a benchmark 

for optical laboratories in the production of ophthalmic lenses 

from a prescr iption written by an optometrist or ophthalmologist . 

In the words of the Z80.l Subcommittee on Ophthalmic Lenses, 

which drafted the standards, the ANSI standard 

•.. does not represent tolerances that 

describe the state-of-the-art of the oph­ thalmic laboratory, but provides goals for 

new or pristine lenses prepared to individua l prescription. The individual performance parameters listed in this standard 

can be reliably achieved. However, it is 

difficult to meet all of the requirements 

simultaneously in any given lens or mounted 

pair . The fact that, under rigorous application of this standard, a significant number of spectacles (approximate ly 25% based 

on 1977 industry estimates) will not achieve 

all parameters simultaneously must be accepted 

as a reflection of the current state-ofthe- art. As such , this standard expresses 

desirable technical concepts that provide 

a frame of reference for safety and effectiveness and is not designed as a regulato r y 

instrument.37 

36 American National Standards Institute , Recommendations 

for Prescription Ophthalmic Lenses, 1979. 

37 Id . at Foreword. 

113 
Earlier versions of the ANSI standard, (the prior version of this ANSI standard was adopted in 1972), have been used 

as a measure in other studies of the quality of lens fabrication.38 These studies differ from the Commission's study in 

that their purpose was to measure the accuracy with which optical 

laboratories produced spectacles which matched given lens specifications . Duplication , on the other hand, is a two-step 

process. First, the optician must determine the lens specifications by neutralizing the lens , and then the lens must be prepared 

to match that prescription . 

In interpreting the results of our study, we caution the 

reader against equating the failure to achieve the ANSI tolerances 

with an adverse patient response. The optical literatur e is 

devoid of any reliable research assessing the amount of variation in a prescription which can be comfortably tolerated by 

a patient. 39 The ANSI standard exp resses the state- of- the-art 

wi th respect to fabricating lenses, and is not designed to be 

38 See,~-, Chase & Lynch, An Examination of Ophthalmic Prescription Spectacle Quality Relative to American National 

Standard ZS0.l-1972. (In this study, 300 glass prescriptions and 150 plastic lens prescriptions were processed 

by 30 laboratories around the country. 49% of the finished 

products fail ed to meet all of the 1972 tolerances simultaneously.) Augsburger, Evaluation of Ophthalmic Materials, Am. J . Opt. & Physiol Optics 700-705 {Oct. 1978) . 

39 See,~- , King , Tolerance to Tolerances, 50 J . of the 

AOA (May 1979). In this article the author equates the 

deviation in two eye examinations conducted on the same 

patient as being " the limits of (patient] sensitivity. 

As our BE data demonstrate, this hypothesis is of questionable 

validity. ~ pp. 123-131, infra. 

114 
a standard reflecting the outer limits of patient acceptance 

or accommodation. We have assessed the performance of the 

opticians in our duplication study against the ANSI Z80.l 

standard because it is the only available standard. We expect 

that industry groups will offer their viewpoints on the significance of the data during the course of the rulemaking proceeding. 

Later in this report we also discuss the extent to which 

repeated examinations of the same patient by different eye doctors 

may result in different prescriptions. 40 The significance of 

the variations found in our duplication study must be assessed 

in relation to those data. 41 

F. Results of the Study 

We measured the accuracy of the duplication process in 

three different ways. Irrespective of the standard used to 

measure opticians' performance, the results show no statistically 

significant difference between New York and Pennsylvania in 

terms of the accuracy with which the lenses were duplicated. 42 

First, we measured how much the sphere, cylinder, axis, pupillary 

distance, and prism (if any) of each of the duplicated lenses 

40 Infra section G. 

41 As we will discuss in section G, in many cases the consumer's 

only viable alternative: to duplication is a new eye exam. 

The extent to which variation in the prescription results 

from reexamination is relevant in assessing the significance of the error introd~ced via duplication. 

42 For a more detailed discussion of the degree of confidence 

level used, ~ Duplicattion Study. 

115 
varied from each of the original lenses. Second, we determined 

what percentage of the duplicated lenses met the ANSI tolerances 

.,(;) for eacn of the five parameters listed above. Finally, we calculated the percentage of the duplicated lenses which failed to 

meet the ANSI tolerances for all of those parameters. 

The charts below list the mean amounts that the duplicated 

lenses varied from the originals, and the applicable ANSI tolerance for each parameter. 

116 
MEAN DEVIATIONS 

1. Low-Power Lenses 

Deviation 

Lenses 

Deviation 

Deviation 

Mean Pa. 

.056 

(n=25) 

.073 

(n=25) 

4.84 

(n=25) 

1. 98 

(n=25) 

Mean Pa. 

.146 

(n=Sl) 

.160 

(n=Sl) 

4.55 

(n=51) 

1.27 

(n=Sl) 

Mean Pa. 

.113 

(n=45) 

.059 

(n=45) 

6.13 

(n=45) 

1. 54 

( n=4 4) 

.81 

(n=45) 

Deviation 

Deviation 

Deviation 

ANSI Tolerance 

.125 

.125 

7.00 

8.67 

ANSI Tolerance 

.125 

.125 

3.00 

2.50 

ANSI Tolerance 

.125 

.125 

5.00 

2.50 

.33 

Parameter 

Sphere 

(diopters) 

Cylinder 

(diopters) 

Axis 

(degrees) 

Pupillary 

Distance 

( mm • ) 

Mean N.Y. 

• 0 37 

(n=S0 ) 

• 0 39 

(n=S0) 

5.58 

(n=S0) 

l. 90 

(n=48 ) 

2. Medium Power 

Parameter 

Sphere 

(diopters) 

Cylinder 

(diopters) 

Axis 

(degrees) 

Pupillary 

Distance 

(mm. ) 

Mean N.Y . 

.091 

(n=41 ) 

.122 

(n=41) 

3.12 

( n=41) 

l. 60 

{n=41) 

Parameter 

Sphere 

(diopters) 

Cylinder 

(diopters) 

Axis 

(degrees) 

Pupillary 

Distance 

( mm . ) 

Prism 

(diopters) 

3. Prism Lenses 

Mean N.Y. 

.107 

(n=37) 

.079 

{n=37) 

2.78 

(n=37) 

1.13 

(n=35) 

• 9 8 

(n=36) 

117 
As the first chart shows, the mean deviations (or mean 

e rrors) of the low-power lenses duplicated in both New York 

and Pennsylvania were less than the applicable ANSI tolerance 

for each of the four parameters. 

The mean variations discovered in the duplicated mediumpower lenses were more serious than those in the low-power 

lenses and provide some support for the hypothesis that the 

accuracy of duplication decreases with the severity of the 

prescriptive requirements. For every parameter, both the New 

York and Pennsylvania lenses came closer to -- and in several 

cases slightly exceeded -- the ANSI tolerances. 43 

Since the prism lenses were essentially identical to the 

medium-power lenses except for the existence of the prismatic 

correction, 44 the mean deviations found in those two groups 

of lenses are comparable for the sphere, cylinder, axis, and 

pupillary distance parameters. The mean deviation of the duplicated prism lenses from both New York and Pennsylvania greatly 

exceeded the ANSI tolerance for the prism parameter. It is 

43 For sphere and cylinder , the absolute mean variations of 

t he medium-power lenses were higher than for the low-power 

lenses. For axis and pupillary distance, the absolute 

variations were lower. But because the ANSI tolerances 

for axis and pupillary distances for the medium- power 

lenses were more stringent than those for low-power lenses, 

the medium-power lenses' variations were relatively more 

serious. 

44 A prismatic correction in an ophthalmic lens can be achieved 

in a number of ways, depending on the type of prism desired . In our study a vertical prism was produced by decentering 

the optical center of one of the lenses along a vertical 

axis. 

118 

.... 
unlikely that a patient could accommodate or adjust to eyeglasses 

with such a large amount of prismatic error.45 

The next set of charts examines the duplication results 

from a different perspective. It lists the percentages of duplicated lenses which exceeded the ANSI tolerances for each listed 

parameter. 

45 The prismatic imbalance in the lenses was nearly a full 

diopter. According to Allen Kosh, Chairman of the ANSI 

Z80.l Subcommittee on Ophthalmic Lenses, the consensus 

of the optical community is that in most instances, a consumer could not tolerate a ve rtical prismatic imbalance of 

that magnitude. Telephone conversation between Terry s . Latanich and Allen Kosh, April 18, 1980. 

119 
INDIVIDUAL FAILURE RATEs46 

1. Low-Power Lenses 

% from N.Y. exceeding % from Pa. exceeding 

Parameter ANSI tolerance ANSI tolerance 

Sphere 2 12 

Cylinder 2 4 

Axis 12 12 

Pupillary Distance 0 0 

2. Medium-Power Lenses 

% from N.Y. exceeding % from Pa. exceeding 

Parameter ANSI tolerance ANSI tolerance 

Sphere 22 25 

Cylinder 29 24 

Axis 22 24 

Pupillary Distance 22 12 

3. Prism Lenses 

% from N.Y. exceeding % from Pa. exceeding 

Parameter ANSI tolerance ANSI tolerance 

Sphere 16 31 

Cylinde r 19 27 

Axis 8 9 

Pupillary Distance 6 16 

Prism 89 71 

The chart shows that the highest "failure rate" for any 

of the individual parameters in the low category was 12%, which 

was the number of lenses duplicated both in New York and Pennsylvania 

which failed to meet the ANSI tolerance for axis. At the other 

extreme, all of the low-power lenses were within tolerance 

for pupillary distance. 

The failure rates for the medium- power lenses were, as 

Duplication Study, Appendix B (Charts IV, VIII and XII). 

120 

46 
hypothesized, uniformly higher. The highest failure rate for 

any individual parameter was found in the prism category. 

For the prism parameter, 89% of the prism lenses from New York 

and 71% of those from Pennsylvania exceeded the ANS I tolerance. 

The extremely high failure rate on the prism parameter 

may reflect that opticians do not generally follow optimal duplication procedures. Standard practice is to neutralize the 

right lens first, and then the left lens. If the right lens 

is the higher power lens, the process is complete. But if the 

47 left lens is stronger, the procedure must be repeated in reverse. 

Since a prismatic correction is produced by vertically shifting 

the position of the optical center of one lens relative to that 

of the other, it is crucial that optical centers be accurately 

located. And because the optical center can be more easily 

located in higher-power l enses, it is important that the stronger 

lens be neutralized first so that it may be used as a reference 

point. 

The next chart shows the percentages of duplicated lenses 

which fail ed to meet ANSI tolerances for each and every relevant 

parameter. The numbers listed in parentheses represent the percentage of duplicate lenses which similarl y failed to satisfy 

tolerances for each and every parameter, but taking into account 

only the "measurement error" introduced by the optician ordering 

the duplicate lens. That calculation excludes any error intro47 See Stimson, Ophthalmic Dispensing, at 469, 477 (2d ed. 

1971). 

121 
duced in the fabrication process.48 

Percentage of lenses exceeding tolerance49 

plus measurement variation 

on one or more measures 

Type of % from N.Y. exceeding one % from Pa. exceeding one 

Lens or more ANSI tolerances or more ANSI tolerances 

Low-power 16% (10%) 24% (15%) 

Medium-power 66% (49%) 49% (36%) 

Prism 95% (88%) 87% (92%*) 

* In some cases the failure rate based solely on measurement 

error exceeds the overall failure rate because the fabrication error offset the measurement error and brought the lens 

back within the tolerance. 

Comparing individual failure rates to total failure rates 

results in some interesting observations. For example , 24% of 

the low- power lenses from Pennsylvania failed to meet all of 

the ANSI tolerances simultaneously , even though no more than 

12% exceeded any individual tolerance. And 66% of the mediumpower lenses from New York exceeded at least one of the four 

relevant ANSI tolerances, while no more than 29% failed to meet 

any individual tolerance. 

We must emphasize that some of the variation between original 

and duplicated lenses we have detected is due more to the practical realities of ophthalmic dispensing than to any fault on 

the part of the opticians whose duplication work was analyzed 

in this study. In other words, an error may not always be an 

48 Seep. 112, supra. 

49 Duplication Study, Appendix B (Chart XIV). 

122 
error. An example may help to illustrate this point. 

Assume the spherical power of a lens sent to one of the 

opticians in our sample was -4.10 diopters. Standard industry 

practice is to order lenses in gradations of 0.25 diopters. 

If the optician neutralized the lens correctly, he or she could 

not come closer to the original lens than a -4.00 diopter replacement lens. Thus, even if the optician measured the lens correctly 

at -4.10 diopters, the order blank would show a -4.00 diopters. 

Our data would therefore show a "measurement error " of 0.10 diopters, 

even though in fact there is no real error at all . 

We do not view this problem as a shortcoming in the design 

of our study. To the contrary , it points out the limited state 

of the art of ophthalmic dispensing and suggests one of the difficulties encountered when optician performance is evaluated on 

the basis of the ANSI tolerances. If a lens were -4.11 diopters, 

and the optician read the lens as being -4.13 diopters , and 

ordered a -4 . 25 diopter lens , the resulting lens would fail to 

meet the ANSI standard. Yet the performance of the optician, 

given the performance limits of manual focimeters, was virtually 

perfect . 

G. Repeated Examination v. Duplication -- A Comparison of Variation 

If duplication i s not permitted , (and the consumer does not 

wish or is unable to return to his or her original provider 

for eyeglasses) he or she has three choices: (1) simply do without a duplicate pair of eyeglasses (o r in the case of a consumer 

seeking to replace broken lenses , do without any eyeglasses) ; 

123 
(2) use his or her original prescription and obtain new eyeglasses from a different provider 5 0 or (3) obtain an eye examination. It is appropriate, therefore, to compare the amount of 

error introduced through the duplication process with the var iation 

which may result from the examination process . Data from the 

BE study juxtaposed against the data from the duplication study 

permit us to make this comparision. 

In its study, BE sent survey subjects into the field 

to purchase eye examinations and eyeglasses. Before obta ining 

the field examinations, each survey subject received two complete 

eye examinations, one by members of the optometry faculty at the 

Pennsylvania College of Optometry (PCO) and the other by the 

faculty of the School of Optometry of the State University of 

New York (SUNY). 

Each of the two schools was instructed to perform an 

independent eye examination and determine a "correct" prescription for each survey subject. The only difference was that 

SUNY had access to each subject's eyeglasses when its faculty 

members performed the eye examinations, whereas PCO faculty 

did not. 51 PCO and SUNY knew in advance that the prescriptions 

they derived would be compared against each other and that the 

prescriptions would be used as benchmarks to evaluate the pre50 We have discussed the current problems which exist if the 

consumer chooses this alternative on pp. 103-106, supra. 

51 Telephone interview with Jack Phelan, Bureau of Economics, 

June 18, 1980 . 

124 
scriptions determined by the optometrists practicing in the 

field. 52 

The chart which follows presents the differences between 

the prescription determined by expe rts at the two colleges of 

optometry for each eye of the nineteen survey subjects. In 

addition to showing the absolute differences between the two 

schools for the spherical, cylindrical and axis parameters, 

the mean deviation and standard deviation for each of the 

three parameters was computed. (None of the BE study survey 

subjects requi red prismatic: correc tion so no comparison between 

examination and duplication could be made for that parameter.) 

For all of the spherical powers found by PCO and SUNY the 

tolerance under the ANSI ZB0. l standard is+ or - . 13 diopters. 

Yet, as the data show, the mean deviation between PCO and SUNY 

on this parameter is 0.289 diopters, or approximately twice the 

ANSI standard. With respect to the cylinder power, the same 

+ or - .13 diopter standard applies. The mean deviation between 

the two schools was 0.270 diopters. Finally, the mean deviation 

in axis measurements between PCO and SUNY was 9.067 degrees, 

against the ANSI tolerance which varies from 3 degrees to 7 

degrees, depending upon the power of the lenses, with the appropriate tolerance for most of the prescriptions being in the 

vicinity of 5 degrees. 

See pp. 49-92, supra, for a more detailed discussion 

of the BE Study. 

1 25 

52 
r, 

DlFFt::JU::NCES BE'l'WEEN PRESCRIPTIONS DETERMINED BY PENNSYLVAN!A COLLl:;GE OF OPTOMETRY ANO THE SCHOOL OF OPTOM.ETR'i Or' THE 

STATE UNIVERS!'r¥ OF NEW ¥ORI'., FOR EACH SUBJECT, FOR OP'I'.OMETRIC MEASURES INDICATED - EACH E¥E CONSIDERED SEPARATEL'i. 

-

t

'1 

I-' 

I\) 

°' 

SPIIERE C¥LINDE.R AXIS 

SUBJECT PCO SUNY DIFF PCO SUNY OIFF PCO SUNY DIFF 

01 Riyht Eye. Left 

02 R19ht 

Left 

-4.25 

- 6 . 25 

- 1 . 00 - l. SO 

-3.50 

- 5 .00 

-l. so - 1.50 

0.75 

1. 25 

a.so 

0.00 

- 1.25 

- o. 75 

- 0 . JS 

-0. 50 

- 1. 00 

-0.50 

- 0,25 

- 0,25 

0.25 

0.25 

0.50 

0 . 25 

145 

20 

180 

5 

.lJ!) 

45 

180 

180 

lU 

25 

0 

5 

l3 Right 

Left 

14 lhght 

Left 

- 2.25 

-2.75 

- 3.75 

-3.75 

-2.25 

- 2,50 

-4.00 

-4.00 

u.uu 

0.25 

0.25 

0.25 

-1. /':, 

0.00 

- 0.50 

-1. 00 

-J.. 1:, 

0,00 

-0.25 

-0.75 

o.uu 

0 . 00 

0.25 

0 . 25 

160 

-- 170 

180 

158 

-- 180 c; 

2 

--

10 

5 

15 Right

Left 

16 Rl<Jht 

Left 

-0. 75 - 1.00 

- 0.50 

- 0. so 

-0. 50 

- 0 . 75 

-0,25 

0.00 

0.25 

0,25 

0.25 

0 .50 

-o, 7':, 

-0. 75 

- 0.25 

- 0.50 

-l . UU 

-1.00 

-a.so 

-0.75 

u. :.!!> 

0.25 

0. 25 

0.25 

95 

BO 

120 

1ns 

105 

75 

125 

75 

10 

5 

s 

,n 

17 IU\)ht 

Left 

21 lhyht 

Left 

-).25 

- 3 . 00 

- 4 . 50 

-4. 00 

-2.50 

- 2.75 

-4.75 

-4 . 00 

0.75 

0 . 25 

0 , 25 

0.00 

- 0. /!) 

-0.50 

0 . 00 

-0.50 

- 1 . 00 

-0.50 

o. 00 

-0.50 

0. L:, 

0 . 00 

0.00 

0 . 00 

85 

95 

-- l nc; 

90 

90 

--

qn 

5 

s 

--

1 <; 

22 Rl•Jht 

Left 

23 R1yht

Ll.!ft 

- 7 . 25 

-6.50 

-1. 25 - 1. 50 

- 7.00 

- 6.75 

-1. 25 

-1. 75 

U. L:> 

0 . 25 

0,00 

0.25 

u.uu 

- 0 . 75 

-1. 00 

-0. 50 

- J..uu 

- 1.00 

- a.so 

0.00 

J.,U0 

0 . 25 

0.50 

0 . 50 

-- 180 

75 

7<; 

180 

180 

75 

--

--

0 

0 

-- 24 aiyht

Left 

25 Right

L.::ft 

-1. 25 

- 2.00 

- .l . 00 

-1. 75 

- 1. 75 

-1. 75 

-1.25 

-1. so 

0.50 

0.25 

0.25 

0 .25 

- 1. ;.!:, 

-0.50 

-0.75 

0.00 

- u. /!) 

- 1.00 

0.00 

0.00 

0.:,u 

0.50 

0.75 

0.00 

90 

105 

75 

--

95 

85 

--

--

5 

20 

--

-- 26 Right

Left 

27 Ri<;ht 

L~ft 

- 2.00 

- l.00 

- 3. 00 

-2. 75 

-1. 75 

- 1.00 

-3. 25 

-2.50 

0 ,25 

0.00 

0.25 

0,25 

-1. 25 

- 0.75 

0.00 

-0. 50 

- .1 . ou 

-0,50 

- 0.25 

- o . 25 

0. 2:i 

0.25 

0.25 

0.25 

180 

180 

-- 175 

175 

170 

140 

125 

5 

10 

--

50 

28 Right

Left 

29 Hight

Li.!ft 

-.l. uu 

- 1. 25 

- 1.00 

-0.25 

-0.75 

-0.75 

-l. 00 

-0 . 50 

0 • .!!> 

0. 50 

o.oo 

0 .25 

-o. ,~ - 0.50 

- 0.50 

0.00 

- u . /!> 

-0.75 

- o.so 

0 . 00 

U.uu 

0 . 25 

0 .00 

0.00 

145 

45 

160 

--

145 

35 

165 

--

0 

10 

5 

-- 30 Right

Lc:!ft 

31 Ri yht Left 

- 4.uu 

- 4.00 

- 5.25 

- 5 . 50 

-4. 25 

-3.50 

-5.00 

-5. 25 

0 . 25 o . so 

0 .25 

0 .25 

- u . , , 

- 1.00 

- 0 . 25 

- 0.50 

- .L , UU 

- 1.00 

- 0,25 

- 0 .75 

u.25 

0 . 00 

0 . 00 

0.25 

BS 

100 

155 

4'i 

90 

105 

1 35 

4'i 

5 

5 

20 

n 

32 Right 

Left - 2. so - 1. 75 

-2.50 

-2. 00 

o.ou 

0.25 

-l. !>O 

- 1.50 

- u . /!> 

- 0.75 

0. 7:, 

0.75 

170 

10 

170 

5 

0 

5 

NUMBER 

MEAN DEVIATION 

STANDARD DEVIATION 

38 

0.289 

0.243 

38 

0.270 

0.249 

30 

9.067 

10.808 

Source: Data from Bureau of Economics Study 
The next chart below compares the deviations from the PCO/ 

SUNY comparison and the Duplication Study. For purposes of 

this comparison, we selected the mean deviation from the "medium" 

category in the duplication study , the category which is of equal 

or greater severity of prescriptive requirement (and tolerances) 

than the prescriptions found in the BE study. 

Sphere Cylinder Axis 

SUNY/PCO Variation .289 .270 9.067 

Dupli cation Variation .091 .122 3.12 

As is evident, the mean error introduced through the duplication process is substantially smaller than the average 

amount by which the two colleges , under ideal conditions , varied 

in determining the '' correct" prescri ption for the survey subjects. 

Indeed, the "error'' from repeated examina tion , even where there 

were only two sets of exams, is two to three times greater than 

the mean deviation in the duplication sample. 

We hesitate to call the variations between the two school s 

"error. " The variations between the PCO and SUNY prescriptions 

may in part be explained by the state of the art in refracting 

equipment and techniques, by the fact that SUNY examined each 

subject with his or her eyeglasses on, by the fact that there 

may be a difference in a patient ' s prescripti ve needs as a function 

of the time of day, or other factors which might affect the 

physiology of the eye.53 Whatever the basis for the deviation 

See generally, Sloane and Durphy, A Comparison of Refraction 

Results on the Same Individuals, 37 Am. J. Ophthalmology (Footnote Continued) 

127 

53 
I 

between the two schools, is the amount of deviation introduc ed 

through duplication acceptable, given that the alternative -

- obtaining another eye examination -- would likely introduce 

a substantially greater deviation from the original prescription? It would be disingenuous at best to t e~m both PCO's and 

SUNY ' s prescriptions " correct" while terming the optician ' s 

deviation "error." 

As stated earlier, in addition to the examinations performed 

by the faculties at PCO and SUNY, each survey subject underwent 

a number of eye examinations in the course of the BE survey by 

p racticing optometrists who were unaware that the prescriptions 

would be compared. The repeated examinati ons were obtained 

over a short time span to ensure that the refractive status 

of the subjects ' eyes did not change. 

The chart which follows shows the average difference between 

the prescriptions determined by the practicing optometrists 

and each of the prescriptions determined by PCO and SUNY. 

53 (Footnote Continued) 

(Jan.-June 1954) . 

"It seems clear that test findings will 

differ from examiner to examiner eve n under 

the best conditions and that one cannot 

properly be dogmatic about a given refractive error." 

Hurnphriss , Periodic Refractive Fluctuations in the Healthy 

Eye, 15 Brit. J . Vhysiol. Opt. 30-34 (1958). 

128 

r. 
~ 

N 

\0 

AVBRJIC.I·! OIF'fER£NC:ES BETWE~~N PRESCRIPTIONS /\S OETF.RMINEO BY OPTOMETRISTS 

COLLEGES OF OPTOMETRY, YOR EACH SUBJECT, FOR THE OPTOMETRlC MEASURES 

SUBJECT MEASURE 

Ol SJ>llf::RE 

CYl,JNDER 

I\Xl$ 

02 sr111::m:: 

CYLINDER 

AXIS 

.l j SPIIERE 

CYLINDER 

/\XI$ 

14 

Sl'IIEIIB 

CYLINDER 

.IIXIS 

l!> SPl!F.RE 

l!YLiNOER 

AXIS 

16 SPllt:llE 

CYI.INDER 

AXIS 

17 SPIIERE 

CYl,lNDER 

AXlS 

21 SPIIEHE 

CYLINDER 

Axrs 

22 SPHERE 

CYLINDER 

AXIS 

23 SPIIF.RE 

CYLINDER 

AXIS 

PCO 

NUMBER Of' 

OBSERVATIONS 

l:.1-1 11\E flElt) 

ME/IN 

DEVIJ\TlON 

ST/\NDl\RD 

DEVIATION 

66 

66 

66 

.5no 

.112 

ll. 636 

.288 

.132 

6.68) 

52 

52 

49 

• 240 

.233 

5.694 

.220 

.206 

6.001 

72 

72 

36 

.295 

.188 

2. 417 

.235 

. l 4 4 

2 .560 

48 

48 

48 

.255 

.151 

6.312 

.196 

.161 

5.725 

66 

66 

66 

.201 

.286 

7. 712 

. 118 

.124 

14 541 

JS 

38 

2) 

.125 

.204 

1 7 l 74 

. 165 

.173 11 9 4 9 

30 

30 

28 

.192 

.12l 

5.000 

.182 

.156 

2.667 

36 

36 

12 

.306 

.236 

10.000 

. 311 

. 198 

4.767 

34 

34 

17 

• 2 50 

.441 

4 941 

.185 

.269 

f, 905 

26 

26 

20 

.558 

. 4 23 

44 '-no 

.408 

• 306 

26.16" 

Source: Data from Bureau of Econo~ics Study 

1N THE FTELO J\ND 

INDICATED - EJ\CH 

BY 

EYE 

EXPERTS /IT 

CONSIDERED 

EJTHF:R OF' TIIE TWO 

SEPARATE~Y . 

StJNY 

NIJMBf.R OF 

OBSEP.V/\TIONS

1N T~E. f-It.\...b 

ME/IN 

DEVIJ\TION 

STAND/IRO 

DEVIATION 

66 

66 

66 

52 

52 

49 

72 

72 

)6 

48 

48 

48 

66 

66 

66 

38 

38 

., 1 

30 

30 

28 

36 

36 

1 ') 

34 

34 

14 

. 545 

. 206 

6.045 

.1 73 

.1 70 

6.000 

.177 

.1 88 

4. l'J 4 

. 130 

. 2J 4 

3.4l!! 

. 117 

.074 

5 91'1 

. )9 4 

. 375 

7 r,02 

. 692 

.171 

1 . 429 

.4 31 

. 236 

5 000 

. 221 

. 257 f, ")" c; 

. 311 

• 156 

7.005 

. 200 

. l 24 

8.021 

.207 

.144 

2. 724 

.163 

.16J 

2,82A 

• J 8 2 

.122 1 4 '-£,) 

.228 

.238 

e l on 

. 224 

. l 6 2 2 1Q ", 

. JG 7 

.198 

d 767 

.211 

.199 

7 04') 

26 

26 

10 

. 510 

. 269 

3Q ')On 

.409 

. 254 

22 Al7 
PAGE 2 

AVERAGE DIFFERENCES DETWEEN PRF.SCRiPTIONS AS DETERMI NED BY OPTOMETRISTS 

COLLEGES OF OPTOMETRY, FOR EJ\CII SUBJECT, FOR Tl!E OPTOMETRIC MEASURES 

IN THE FIELD AND 

INDICATED - EACl:I 

BY EXPERTS AT EITHER Of THE 

EYE CONS IDERED SEPARATELY. TWO 

I-' 

w 

0 

SUBJECT MEASURE 

24 SPlltRE 

CYLINDER 

AXIS 

25 srm:RE 

CYLINDER 

A.XIS 

26 SPIIEHE 

CYLINDER 

AXIS ,I. , SPHEHE 

C'iLINDER 

A~ IS 

28 S1'111::HE 

CYLINDER 

AXIS 

29 SPlll::RE 

CYLINDER 

AXIS 

JO SPHERE 

CYLINDER 

AXIS 

Jl SPIIERE 

CYLINDER 

AXIS 

J2 SPHERE 

CYLINDER 

AXIS 

Source: Data 

PCO 

NUMtmR OF ffl:AN 

OBSERVATIONS DEVIATION 

:IN ntc FlEl-0 

12 • 271 

12 .292 

12 7.917 

so .270 

so . 238 

19 10 . 895 

40 .332 

40 .356 

37 3. 811 

42 .286 

42 . 271 

8 23.125 

36 . 271 

36 . 250 

32 14 . 1 56 

56 .281 

56 . 188 

12 12.500 

38 . 303 

38 . 250 

)6 5. 778 

40 .225 

40 . 231 

15 12.800 

56 • 317 

56 .835 

52 7.058 

from Bureau of Economics Study 

S'fliND/\RD · 

DEVIJ\TION 

. 271 

.279 

6.557 

.201 

.253 

7 . 164 

.561 

.282 

5.082 

.244 

. 221 

27.8')5 

.242 

.239 

12.488 

. 179 

.240 

9.886 

.314 

.240 

4.072 

. 186 

.173 

16.511 

,240 

. 271 

4.434 

. 

NUMllEH OF 

OBSl::HVATIONS 

IN THE FlELC 

12 

12 

12 

so 

50 

0 

40 

40 

37 

42 

42 

19 

36 

36 

32 

56 

56 

12 

38 

38 

36 

40 

40 

15 

56 

56 

52 

SUNY 

ME/\N 

DEVIATION 

.18 8* 

. 292 

5 . 417 

.210 

.287 

--

.294 

.256 

7.18 9 

.298 

. )82 

27.632 

. 20 1 

. 2 36 

9.469 

. 219 

. 180 

10.000 

.401 

.217 

6. 278 

. 262 

. 331 

8.800 

.206 

.192 

5.904 -

S1'/\ND/\RD 

DEVIATION 

.113 

.1 79 

2.575 

.191 

. 314 

--

.543 

.250 

3. 799 

.283 

.124 

16. 1)6 

.222 

.239 

11. 271 

.159 

.240 

7.071 

. 276 

. 2 41 

6. 810 

.219 

.236 

11. 688 

.171 

.208 

4.852 
The data show high variations in the prescriptions determined by the sampled optometrists. Examination of the deviations in spherical power shows mean deviations of 0.500 diopters 

(patient 01), 0 . 588 diopters (patient 23) and 0.692 diopters 

(patient 17) . Indeed , the lowest mean deviation for either 

the SUNY or PCO compari son is barely under the ANSI tolerance 

of 0.13 diopters . Of the total number of observations , only 

a very few are under the ANSI tolerance , and none are lower 

than the mean deviation introduced via duplication. Similar 

examinations of the cylinder and axis measures also show mean 

deviations substantially in excess of the ANSI tolerance , and 

far in excess of the duplication study variances. 

Thus, we question whether the "failure" rates as measured 

by the ANSI standard determined in our duplication study have 

significance for consumers. Rather, the more important statistic may be the comparative mean deviation for each of the 

parameters. In each case --low , medium and prism -- the sphere , 

cylinder and axis means were substantially lower for the duplication sample than for repeated examination . 

The data also would seem to cast doubt upon the widelyheld belief that there is a single "correct" prescription for 

a patient. The results of the PCO/SUNY comparison indicate 

that experts , under ideal conditions, could not achieve agreement, or even come close to the ANSI standard. 

H. Recommendation 

The preceding analysis suggests three conclusions. 

First , to the extent that consumers are required to obtain 

131 
new eye examinations earlier than necessary to detect changes 

in v i sion in order to obtain duplicate eyeglasses, or repl acements 

for broke n lenses or frames, consumers are incurring a substantial 

and unnece s sary e conomic expense.5 4 

Second, a consumer is more likely to get a dupl i cate or 

replacement pair o f eyeglasses wh i ch more accu rately produce 

the vis u a l cor r ection present in his or her existing eyeglasses 

through the process of neutralization than by obtaining a new 

eye examination. 

Third, the greater the power of t he prescriptive requir ements of a pair of eyeglasses, the greater is the "error" l i kely 

to b e introduced via d upli cation. With respect to dupl i cation 

of prism len ses, the e rror introduced via duplication is of 

an unacceptable magnitude. Howe ve r, we believe in the vast 

majority of instances (i.e., non-prismatic lenses) 55 the opticians ' 

performance are likely to be acceptable in terms of how much 

54 Our dis cussion with members of optometric and ophthalmologic 

groups, h ave r evealed t hat there is no consensus concerning 

how often a person should have his or her eyes checked. 

The range appears to be anywher e from every 6 months to 

every 3 years , depending on o ne' s age and medical and visual 

history. 

Medical Eye Services of Mi ch igan, Inc., a non-profit corporation whose membership consists of Michigan ophthalmologists, 

has stated that if an eye exam shows that one 's eyes are 

healthy , the next exam need not occur until two or three 

years have passed. Letter from Lawrence M. Glazer, counsel 

to Michigan Optometric Association to the Federal Trade 

Commission, with attac~ments, at p. 10 (Feb ruary 1 3, 1980). 

55 Indust ry members estimate that over 90% of a ll single-vision 

lenses fall into our "low'' and medium" categor i es. See Staff 

Report , supra note 25 , at R.24528 (p. 156). 

132 
deviation a patient is able to accomodate. 

On the basis of these findings, we do not recommend that 

the Commission preempt existing bans on the duplication of 

lenses. There appears to be at least some potential for introducing a significant margin of er ror through the duplication 

process, although this "error " i s substantially less than the 

consumer will experience by employing the alternative to duplication, a new eye examination. Rather than preempting stateimposed bans on duplication, we r ecommend that the Commission 

act to ensure that consumers have the ability to obtain their 

current spectacle prescriptions. We recommend that the Commission extend the prescription release requirement of Section 

456.7 of the Eyeglasses I Rule to require that upon filling 

a prescription for spectacle lenses5 6 the dispenser, whether 

an ophthalmologist, optometrist or optician , return a fillable 

prescription to the consumer. This will enable the consumer 

to obtain replacement or duplicate pairs of eyeglasses from 

the original lens specifications . Potential er r ors which might 

occur in the duplication process will be eliminated. Consumers 

will be able to obtain duplicate or replacement eyeglasses in 

the most efficient manner , without any compromise in the quality 

of care they receive. Indeed , adoption of this remedy will 

enhance the quality of eye care received by those consumers 

who wish to obtain replacement or duplicate pairs of eyeglasses 

56 Our recommendations regarding contac t lens prescriptions 

are contained in Part IV of this report . 

133 
which produce the v isual co rr ection p r esent i n their existing 

eyeglasses both in states wh i ch permit and those which prohibit 

the duplicati on of l enses. The preparation of duplicate lenses 

from the original lens specifications is more accurate than 

either of the ex isting alternatives. 

Under our recommendation, the ab ility of the states to 

impose an expiration date on the prescription will not be 

affected. That is, the states would retain their authority 

to impose a requirement that a prescription be val i d for whatever period of time the state determines is r easonable. Such 

a r equirement would prevent consumers from bypassing needed 

examin a tions by obtaining duplicate lenses with an outdated 

prescription. 

We believe that the failure of refractionists and opti c i ans 

to return prescriptions to consumers constitutes a violation 

of Section 5 of the FTC Act for the same r easons articulated 

in support of the original prescription release requirement 

co ntained in Se ction 456.7 of the Eyeglasses I TRR. The fail ur e 

of the dispenser to r e turn the prescription t o the consumer limits 

the a bility of the consumer to obtain r eplacement or dupl i cate 

lenses . This ac tion may not only subject the consumer to unnecessary exp ense (a potentially unnecessary eye examination) but 

also to the possibility tha t the replacement lenses he or she 

obtains will be inaccurate (whethe r they ar e obtained by d uplication or reexamination). 

Howeve r, the BE study data raise a d i fficult question concer ning the relationship between the prevalence of an unfair 

134 
act or practice, and the scope of the Commission's remedial 

authority. Our data show that in a few cases , consumers were 

denied return of their prescr i ptions. In a higher percentage 

of cases, the prescription returned to the patient probably 

could not be filled . However, in states which permit duplication , 

the ability of the consumer to obtain a copy of his or her lens 

spe~cifications, even if that prescription cannot be dir ectly 

filled, does enable the subsequent provider to compare the results 

of the "neutralization" against the original lens specifications , 

and then fill the old prescription. In essence , the old prescription could be fill ed. It is only in those states which 

prohibit duplication where the validity of the prescripti on 

becomes critical. 

Two prevalence issues thus arise. First, can the Commission require that providers in a ll states return the original 

si9ned prescription t o the consume r afte r purchasing eyeglasses , 

simply because a small percentage of providers fail to do so 

when r equested ? Second, can the Commission require all providers 

in all state s to re turn prescriptions to their patients where 

the failure to do so onl y results in cons umer inju ry in states 

which ban duplication? In other words, can t he Commission create 

a nationwide remedy to an unfair act or practice existing in 

only 12 to 15 states? 

First, we believe that the perce nt age of instances in 

which consumers cannot obtain their presciiptions after dispensing, alth9ugh small, is sufficient to justify the recommended relief. Th e r emedy which we recommend enhances the 

1 35 
+ 

quality of vision care received by those consumers who wish 

to obtain duplicate or replacement eyeglasses which produce 

the visqal correction present in their existing eyeg l asses 

and is, at most, a minimal burden on providers. Clear l y the 

parameters of the lenses must have been determined in order 

to prepare the eyeglasses. Our recommended remedy does no more 

than require that a signed copy of this be r eturned to the consumer. Thus, we believe that the imposi tion of a non-preempt ive 

remedy which accomodates all of the states' conce rns without 

preempting state laws can and should be imposed nationwide. 

Our proposed remedy doE?s not alter states' determinations 

as to what function~ a provider is permitted to perform. Ra ther, 

we will simply be ensuring that consumers r etain the right to 

seek out a provider qualified unde r state law to fill a l ens 

prescription. This is an example, we be l ieve, of how the Commiss ion should proceed in the area of "scope of practi ce " regulations. Although it may be undesirabl e for the Commissio n 

to preempt state " scope of practice" dete r minations , t here may 

be instances (such as this) where the states' goals can be ach i e ved, 

or even enhanced, by Commission action which alleviates unne c e ssary 

consumer injury. 

One final issue remains to be resolved in the rulemaking 

proceeding if the Commission accepts our recommendation: sho uld 

the Commission impose a requirement that prescriptions be give n 

out over the telephone? ThE~ rule which we recommend would not 

impose a tel e phone release requirement. It must be r ecognized 

that by not preempting bans on duplication, in some instances, 

136 
consumers, who may have lost or misplaced their prescriptions, 

will still not be able to obtain duplicate lenses readil y. 

Placing an obligation on practitioners to release prescriptions 

over the telephone would alleviate the problems facing consumers 

who lose their prescriptions or who are away from home, or who 

lose or damage their eyeglasses and are not carrying copies 

of their prescriptions with them. 

The issue of telephone release of prescriptions raises 

two practical considerations. First, who has the right to 

receive the lens specifications from the original dispenser 

by telephone -- the consumer or the new dispenser? And second, 

we must focus in the rulemaking proceeding on the length of 

time records are currently maintained by eye doctors and opticians. Imposing a requirement that prescriptions be given out 

over the telephone implicitly requires that records be maintained 

to comply with that requirement. If records are currently 

maintained for a period of time less than the obligation imposed 

by the Commission, then we would be imposing an additional cost 

of doing business on those practitioners. Thus, during the 

course of the rulemaking proceeJing, we will need to gather 

data on the current practice with respect to record retention, 

and the costs to practitioners if they were placed under an 

obligation to release prescriptions over the telephone. 

If the answer to this latter question shows that the cost of 

telephone release would be high, it may well be advisable to 

require that the dispenser return the prescription to the patient 

at the time it is filled, but not impose a telephone release requirement. 

137 
III. Restrictions On The Over-The- Counter Sale Of Ready-To-Wear 

Reading Glasses 

A. Introduction 

In this section, we will discuss the issues raised by state 

laws which restrict the sale of ready-to-wear, non-prescription 

reading glasses. In the past, these eyeglasses have been sold 

without prescription in all but five states. Evidence has been 

presented to us that several states have r ewritten or are considering rewriting their optometry laws to restrict the overthe-counter sale of reading glasses. 

Ready-to-wear reading glasses are simply magnifying lenses 

placed in regular eyeglass frames to provide magnificati on for 

close vision tasks. These eyeglasses are primarily used by 

people who suffer from presbyopia, which is the decreased ability 

of the normal eye to focus on near objects and printed material.I 

Around age forty-five, many people who have never worn 

eyeglasses before begin to have difficulty focusing on near 

objects and find that their eyes become tired after reading. 

With age, the lens within the eye loses its flexibility and 

as a result, the eye is not able to change focus for near and 

far vision. Focusing at close range becomes difficult and 

the presbyope must either hold reading material further away 

or else we ar eyeglasses to do the focusing which the eye is no 

l H. Solomon and W. Zinn, The Complete Guide to Eye Care , 

Eyeglasses, and Contact Lenses 241 (1977). 

-

138 
longer able to do for itself.2 

In most states, ready-to-wear reading glasse s are sold 

without prescription in department stores, drug stores, and 

other commercial establishments. 3 Reading glasses are generally 

available in ten different focus numbers, each of which corresponds to a particular spherical power. 4 

If a consumer with presbyopia has a copy of his or her 

eyeglass prescription, he or she can use it to obtain reading 

glasses with the correct magnification. Otherwise, he or she 

can simply try on different pairs of reading glasses and find 

what he or she perceives to be the best magnification. 

B. Industry Profile 

The only American manufacturer of reading glasses is 

Pennsylvania Optical Company (POC), which supplies approximately 

55% of the market. 5 A number of other companies are involved 

in importing and distributing reading glasses in the United 

States. 6 

2 B. Esterman, The Eye Book, 17, 229, 249 (1977). 

3 See Section B, infra, which discusses the state laws on 

the sale of ready-to-wear reading glasses. 

4 Letter from Robert B. Clark, attorney for Pennsylvania 

Optical Company, to Michael Pertschuck (June 20, 1979) 

at 4. 

5 Letter from Robert B. Clark, attorney for Pennsylvania 

Optical Company, to Patricia Bangert, Renee Kinscheck, 

and Christine Latsey, (Sept. 19, 1979 ) at 2 (hereinafter 

cited as "Letter from Clark" ). 

6 Letter from Clark, supra note 5, at 3. 

139 
It is estimated that approximately four million people 

purchase reading glasses each year in the United States. Annua l 

sales to consumers total over 36 million dollars.? Reading 

glasses retail from $5.00 to $13.00 per pair. 8 Single-vision 

prescription eyeglasses usually cost two to ten times as much 

as ready-to-wear glasses.9 

C. Analysis of State Laws 

Many optometr i c p r actice acts have exemptions which permit 

ready-to-wear reading glasses to be sold without an ophthalmic 

prescription. 10 But five states have statutorily restricted 

the sale of these eyeglasses, permitting them to be sold only by 

7 Le tter from Clark, supra note 5, at 2. 

8 Id. 

9 Bureau of Consumer Protection, Federal Trade Commission 

Staff Report on Advertising of Ophthalmic Goods and Services and Proposed Trade Regulation Rule at R. 24451-61 

(pp. 79-89) (May 1977). (discussing surveys which provide 

figures on the range of single-vision eyeglasses prices). 

10 See,~, Tenn. Code Ann. § 63-816 which provides : 

Persons and practices exempt. -- Nothing 

in this chapter shall be construed: .•. 

(3) To prevent persons, firms , and corporations 

to sell ophthalmic lenses or ophthalmic products 

at wholesale , in a permanently established 

place of business on prescription to those 

who are legally qualified to prescribe them, 

nor to prevent an optical mechanic from 

doing the merely mechanical work upon such 

lenses or frames or fitting, nor to prevent 

a wholesale house from s e lling ready-to- wear 

eyeglasses or spectacles as merchandise , at 

wholesale, to merchants for purpose of resale 

as merchandise, when neither the wholesaler 

nor purchaser to whom he sells practice optometry. 

140 
optometrists and ophthalmologists, or by opticians upon the 

prescription of an ophthalmologist or optometrist. 11 In two of 

these five states, ready-to-wear glasses may also be sold 

by opticians under the direct supervision of an optometrist 

or ophthalmologist. 12 In three of these states, opticians must 

be licensed,13 

There is some evidence of a growing trend t o enact this 

type of restrictive state legislation. Within the past year , 

one state has enacted such a law. 14 In at least three other 

11 These states are Louisiana, Massachusetts, Minnesota, 

New York and Rhode Island: La. Rev. Stat. Ann. § 37:1065 

(West Supp. 1979); Mass. Gen. Laws Ann. ch. 112, § 73 (West 

1971); Minn. Stat. Ann. § 148.56 {West 1970); N.Y. Educ. 

Law§§ 7106, 7126 (McK inney 1972); R.I. Gen. Laws§ 5-35-

21 (1976). 

Several of these statutes state explicitly that eyeglasses 

or lenses for the correction of v ision may be sold only 

upon prescription of a physician or optometrist or by optometrists or ophthalmologists. N.Y. Educ. Law§§ 7106, 

7126 (McKinney 1972 ) ; La. Rev. Stat. Ann. § 37:1065 (West 

Supp. 1979); R.I . Gen. Laws§ 5-35-21 (1976). Other statutes define the practice of optometry to include "adaptation or prescribing of .lenses ... " and then explicitly 

exclude the sale of lenses on prescription of physicians 

or optometrists and the sale of lenses not for the purpose 

of correcting defective v ision. Minn. Stat. Ann. § 148.56 

{West 1970); Mass. Gen. Laws. Ann. ch. 112, § 73 ( 1971 ). 

1 2 Minnesota and Rhode Island: Minn. Stat. Ann. § 148,56 (West 

1970); R.I. Gen. Laws § 5-35-21 (1976). 

13 Massachusetts, New York and Rhode Island: Mass. Gen. Laws 

Ann. ch. 112 § 73C et. :~• (West 1971); N.Y. Educ. Law 

§ 7120 ~- ~- (McKinney 1972); R.I. Gen. Laws§ 5-35-

23 (1976). 

14 La. Rev. Stat. Ann. § 37:1065 (West, Supp. 1979 ). 

141 
states, legislation was introduced to add such restrictions.15 

While one of these proposals has been defeated, 16 two are still 

pending in the state legislatures. 17 

It is unclear whether the changes which would remove readyto-wear reading g l asses from the exclusionary sections of the 

optometric practice acts have been deliberate or inadvertent. 

Since the adoption of the Eyeglasses I Rule, state sunset review 

of licensing regulati ons and public awareness of Eyeglasses 

II, numerous states have, or are in the process of , r ewri ting 

their practice acts. 

D. Effects on Consumers 

Although laws restricting the over-the-counter sale 

of r eady-to-wear reading glasses currently exist in only five 

states, the n umber of people affected by those laws is not 

insignificant. As stated earlier , it is estimated that four 

million people buy reading glasses each year. ~his is approximately 2 % of the population of those states where the sale is 

18 not restr i cted . Two percent of the population of these five 

restricted states amounts to over 600,000 people. It is reason15 Connecticut {proposed Senate Bill No. 393, 1979); Pennsylvania 

{proposed Se n ate Bill No. 770, 1978) ; Tennessee {Tennessee 

House Bil l #485, introduced on Feb. 15, 1979). 

16 The proposal was defeated in Connecticut, allegedly as 

a result of presentation of evidence by the Pennsylvania 

Optical Company. Lette r from Clark , supra note 5, at 3. 

17 Id. 

18 1970 Census of Population, Vol. 1, at 1-41, 20-7, 23-7 , 

25-7, 34-7, 41-7 . 

142 
able to estimate, therefore, that over 600,000 people are directly 

affected by restrictions on the over-the-counter sale of reading 

glasses . If current legislative trends continue, that number 

may soon increase. 

One effect of such a restriction is to require a consumer 

who needs eyeglasses for reading or other near- vision tasks to 

visit an optometrist or ophthalmologist and obtain prescription 

eyewear after an eye examination is performed. 19 A recent survey 

of optometrists practicing in the U.S. found that the mean price 

for examination of a presbyope was about $25 . 2 0 The inconvenience 

of obtaining eye examinations and the transportation costs 

involved must also be added to the expense of obtaining an eye 

examination. 

In addition, regular single-vision prescription eyeglasses, 

which have higher production costs and involve more professional 

service for dispensing, generally retail for more than readyto-wear glasses.21 

While we are uncertain whether dispensing optometrists, 

ophthalmologists and opticians would offer ready-to-wear 

19 It is conceivable but unlikely that the refractionist would 

prescribe ready-to-wear glasses rather than made-to-order 

prescription eyeglasses. 

20 James W. Begun, Ph.D., Professionalism and the Public 

Interest: Price and Quality in Optometry 50 (Ph.D. disse r ­

tation, University of North Carolina) (June 1977). 

21 Seep . 140 su,E_ra. Ready-to-wear glasses are already 

fit into frames; no frame selection is involved and thus the 

lenses need not be ground and fit into the frames as with 

prescription eyeglasses . 

143 
reading glasses if their over-the-counter sale were prohibited, 

some preliminary evidence tends to refute such an assumption. 

According to POC, none of their reading glasses are sold in 

states with restrictive laws. 22 We do not now know whether 

POC has seriously tried to market reading glasses in these 

states. We will endeavor to answer this question in the rulemaking proceeding. If they have tried, their lack of success 

indicates that practitioners in those states are grinding r eading glasses themselves or having them ground by laboratories. 

Consumers who would purchase the ready-to-wear glasses in those 

states must e ither obtain the more expensive prescription eyewear 

or do without. 

The available evidence indicates that restrictions on the 

over-the-counter sale of ready-to-wear glasses have the effect 

of raising the cost of purchasing eyewear to that segment of 

the population which would purchase such eyewear. The issue 

of restrictions on the sale of ready-to-wear glasses was not 

one of the issues originally addressed by us in our Eyeglasses 

II investigation. Rather, the majority of the data we have 

collect ed on this question was submitted by POC in a request 

made to the Commission for a formal investigation under Section 

2.2 of the Commission's Rules of Practice. 23 At least on the 

22 Letter from Frank Brink, President of Pennsylvania Optical 

Company, to Renee Kinscheck, FTC (Aug. 22, 1979); Letter 

from Clark , supra note 5, at Enclosure 2. 

23 14 C.F.R. §2.2. Letter from Robert Clark to Michael Pertschuck 

(June 20 , 1979). 

144 
24 

issue of consumer cost, restrictive state regulations in this 

area appear to cause consumer loss. The question, therefore, 

becomes whether restr ictions on the sale of ready-to-wea r glasses 

have countervailing benefits to the population. 

E. Justifications for Restrictive State Laws 

Because this issue was not among those considered in the 

Eyeglasses I proceeding or initially examined in the Eyeglasses 

II investigation, we have little evidence concerning the "quality 

of care " justifications for state bans on the sale of readyto-wear glasse s. 

From informal contacts with industry members, we have 

identified two possible quality justifications for such 

restrictions. First, the quality of ready-to-we a r eyeglasses 

may be lower than that of pr escription eyeglasses. 24 

There is no standard for ready-to-wear glasses comparabl e 

to the American National Standards Institute (ANSI) Z80.l 

standard for prescription eyewear. However, the ANSI Z80.l 

standard is (in most states) a vol untary one. The extent 

of industry-wide compliance to that standard is unknown. 

The real issue is· the comparative quality betwen prescription eyeglasses and ready-to-wear glasses. Th e quality 

issues for each , howeVE=r, may be different. The ANSI standards for prescription lense s concern how closely the fabricated lenses match the eyeglasses prescription. Since 

ready-to-wear glasses are generally sold without prescription, the quality issuE? involves not only t he manufacture 

of the lenses but also whether the ability to purchase 

these lenses without a prescription, and hence without 

professional supervision, may be harmful to the wearer. 

Reading glasses have been classified as a medical device 

by th~ Food and Drug Administration. 21 u.s.c. § 321 

et.~- They must also meet FDA impact resistance standards. 21 C.F.R. § 801 . 410. 

145 
25 

Second , presbyopic consumers whose visual needs are satisfied by ready-to-wear glasses might feel no need to obtain 

regular eye examinations . Without such examinations , consumers 

run the risk of allowing ocular or systemic diseases to remain 

undetected. 25 

F. Conclusion 

Although we do not perceive this issue to be as significant 

as the others which are under investigation in Eyeglasses II , 

we feel that the potential economic injury which results from 

restrictions on the sale of ready-to-wear glasses warrants a 

thorough examination of this issue. Specifically, we have identified two critical questions which we believe must be answered 

before the Commission can determine whether these restrictions 

viola te Section 5 of the Federal Trade Commission Act: 

The over-the- counter sale of reading glasses enables consumers to bypass regular eye examinations. Assuming the 

r easons for a person's incr eased difficulty in performing 

close v ision tasks is presbyopia, such an individual could, 

in addition, be suffering from eye disease or other medical problems. The use of r e ady-to-wear reading glasses 

could mask pathological problems involving a person's eyes. 

Since presbyopia generally occurs in middle age, which 

is the time when glaucoma and other eye problems become 

a concern, the need for regular eye examinations to detect 

potential conditions is obvious. It has been asserted, 

however, that if a person has symptoms of eye problems 

other than simple presbyopia, these symptoms will continue 

despite use of reading glasses. If this is so, such persons 

should not be deterred from seeking proper medical attention 

as a result of their purchase of reading glasses. Therefore, it is necessary to consider how the use of reading 

glasses affects the consumption of eye examina tions. 

146 
1. Is the quality of ready-to-wear glasses lower than 

that of "prescription" eyeglasse s, to the degree that consumer welfare may be jeopardized? 

2. If consumers are able to purchase ready-to-wear glasses, 

will the glasses improve consumers' vision sufficiently 

to mask pathological conditions of the eye, thereby allowing 

consumers to forego eye examinations, and permitting ocular 

and systemic diseases to remain undetected? 

147 
IV. Contact Lens Fitting by Opticians 

A. Introduction 

Since the invention of the plastic corneal contact lens 

in 1948, millions of Americans have been fitted with contact 

lenses. These contact lens wearers invested substantial sums 

of money when they were initially fitted for lenses, and they 

will continue to spend money on replacement lenses, special 

chemical solutions, and follow-up examinations as long as they 

continue to wear contact lenses. 

Anyone who wishes to wear contact lenses must first go 

to an ophthalmologist or optometrist for an eye examination, 

which will include a determination of the refractive state of 

1 the consumer's eyes. If the examination shows that the consumer 

needs eyeglasses or contact lenses to correct his or her v ision, 

the refractionist is required by the Commission's "Eyeg lasses I 

Rule" to give the prescription to the consumer at the conclusion 

of the examination. 2 This written prescription contains the 

refractive measurements of the patient's eyes as determined 

from that examination. 

But additional steps must be taken if the consumer is to 

1 In no state are opticians (also known as ophthalmic dispensers or ophthalmic technicians) permitted to measure 

refractive powers or ranges. For a detailed description 

of each of the three different groups of eye care practitioners, see Bureau of Consumer Protection, Federal Trade 

Commissio~Staff Report on Advertising of Ophthalmic Goods 

and Ser vices and Proposed Trade Regulation Rule, Exhibit III2 at R.24387-24403 {pp.l~-31) (May 1977) [hereinafter cited 

as Staff Report]. 

2 16 C. F. R. § 4 5 6 ."7 (19 8 0 ) 

148 
be fittea with contact lenses. The fitter must measure the 

curvatures of the consumer's corneas with a device known as a 

keratometer3 ana must aetermine the various physical specifications of the contact lenses. The consumer must be taught how 

to insert ana remove his or her contact lenses, and how to clean 

and care for them. The fitter must evaluate the fit of the 

lenses, typically through the use of flurorescein (a fluorescent 

substance applied to the cornea) and a biomicroscope, both 

when the lenses are first placed on the consumer ' s eyes and 

on subsequent follow-up visits to the fitter's office. 

As long as the consumer continues to wear contact lenses, 

he or she will need replacements for lost or damaged lenses . 

Most consumers who need replacement lenses will obtain them 

from the original fitter. Those who wish to purchase replacements from another source must first obtain the lens specifications from the original fitter, or must be completely refitted. 

Contact lenses have been successfully used in the correction 

of many visual conditions, including: myopia (nearsightedness); 

hypermetropia (farsightedness); corneal astigmatism (an irregular 

or aspherical cornea); presbyopia (an age-related inability 

to focus on near objects); keratoconus (a progressive thinning 

Bausch & Lomb, Inc . has patented its particular instrument 

as the ''Keratometer." Other similar devices are known 

generically as ophthalmometers. Since the measurement of 

corneal curvatures is more accurately described as keratometry than as ophthalmometry, all such instruments will 

be referred to as keratometers in this document. w. Sampson 

and J. Soper, Keratometry, in Corneal Contact Lenses 65- 92 (L. Girard ed. 2nd ed. 1970). 

149 

3 
of the center of the cornea which results in a bulging or nippleshaped cornea); aphakia (lack of the natural crystalline lens, 

usually~ue to cataract surgery); aniseikoni a and anisemetropia 

(conditions where there is a difference in size or shape between 

the two retinal images); strabismus (crossed eyes); and amblyopia 

(ITTlazy eye"). 4 Contact lenses provide superior vision correction 

or therapy in many of these conditions, and may be the only 

means of correcting certain visual problems satisfactorily. 

For the millions of people who have moderate to high degrees 

of myopia , hypermetropia, or astigmatism, the use of contact 

lenses may result in a more normally-sized retinal image, a 

larger v isual field, and freedom from the discomfort caused by 

wearing thi ck , heavy spectacles. Contact lenses offer even 

more dramatic advantages to the keratoconic wearer. Patients 

with keratoconus are usually unable to obtain satisfactory vision 

with spectacles. Contact lenses provide the only satisfactory 

alte rnative to keratoplasty (corneal transplantation) for those 

with keratoconus. 5 

Patients who have undergone c ataract surgery are also often 

greatly benefitted by contact lenses. Compared to aphakic vision 

with thick cataract spectacles, aphakic vision with contact lenses 

4 Definitions of these and other optical and ophthalmic terms 

used in this section are paraphrased from those which appear 

in H. Solomon and W. Zinn, The Complete Gu i de to Eye Care, 

Eyeglasses, and Contact Lenses 235-43 (1977). 

5 L. Girard, Indications and Con tr aindications for the Use 

of Corneal Contact Lense s, in Corneal Contact Lenses 108-

09 (2nd. ed. 1970). 

-

150 
is much less distorted, the visual field is greatly enlarged, 

and near vision is .improved. Most importantly, the contact lens 

magnifies image size only 7%, while cataract Agec t ac l es incr ease .,~: 

image s i ze 30%. While image size magnification of this magnitude 

causes problems to all aphakic patients ("aphakes"), it is particularly troublesome to those patients who hav e had ca taract surgery 

on only one eye. With cataract spectacles, a monocular aphake 

perceives two images which differ in size by 30 %. But with 

contact lenses, the image size difference is only 7% , a difference 

to which many monocular aphakes can accommodate comfortably. 6 

Contact lenses are often worn primarily for "cosmetic" 

reasons. Cosmetic weare rs range from those who suffer from 

albinism (absence of eye pigment) and aniridia (complete or 

parti al abse nce of the iris) to those who simply dislike their 

appearance in eyeglasses. The importance of appearance to 

contact lens wearers cannot be categor ized as mere vanity. 

The use of an opaque contact lens rather than an eye patch to 

occlude the eye of a six-year-old amblyopic child may be termed 

"cosmetic," but may l ead to the avoidance of serious psychological 

damage. Even in less dramati c cases -- adolescent myopes who 

we~ar contact lenses simply because they do not want to wear 

glasses -- the u se of contact lenses, wearers report, has resulte d 

7 in b e tter grades and increased extracurricular activities . 

6 Id. at 109-14 . 

7 L. Glatt and A. Schwartz, Contact Lenses for Children and 

Adolescents - A Survey, 32 Journal of the American Optometric 

Association 143- 146 (1960). 

151 
And teenagers who wear contact lenses wear their corrective 

lE~nses much more frequently than do those who wear eyeglasses. 8 

B .. Industry Profile9 

Approximately 15 million Americans wear contact lense.s.10 

Of those, about half are hard lens wearers and half are soft 

11 lens wearers. About 70 % of all contact lens wearers 

are females. 12 The average age of contact lens wearers is 30 

years (compared to an average age of 22 years in 1973). 13 Most 

contact lens wearers are myopes, but a significant percentage 

have more unusual conditions such as keratoconus or aphakia, 

8 A 1976 study of 1300 adolescent females found that those 

who had contact lenses wore them for an average of 14.3 

hours per day, while eyeglass wearers averaged only 8.6 

hours of wear a day. Only 62.4% of those with eyeglasses 

wore them every day, while 94% of those who had contact 

lenses were daily wearers. "Contact Survey Eyes Teenage 

Girls," American Optometric Association News, Dec. 15, 

1976, at 1, col. l. 

9 For a detailed description of the ophthalmic industry as 

a whole,~ Staff Report supra note 1, at R.24383-24403 

(pp. 11-31). 

10 "New Price Rivalry in Soft Contact Lenses," Business Week, 

May 14, 1979, at 36. The American Optometric Association 

estimates that several million others have worn or attempted 

to wear contact lenses at one time or another. American 

Optometric Association, Contact Lens News Backgrounder 

1 (April 1978). 

11 "New Price Rivalry in Soft Contact Lenses," Business Week, 

May 14, 1979, at 36. 

"197 9 CLMA Convention Frog ram Reflects Indus try Streng th 

and Growth," 20/20, January-February 1980 at 96 (quoting 

speech by William Applegate of the Replacement Lens , Inc . ). 

13 Id. 

152 
for which contact lenses offer unique advantages.14 

The percentage of the population that wears contact lenses 

is steadily increasing. About 1.5 million people were fitted 

with contact lenses in 1978, 15 and over 2.7 million were 

fitted in 1979. 16 Although sales of hard lenses have flattened 

out and are expected to decline in future years, the soft lens 

market is growing at an annual rate of 25%. 17 Since some 

50 or 60 million Americans are potential soft lens wearers, 

this rapid growth rate could continue indefinitely.18 1978 

sales of soft lenses and lens care solutions and devices were 

about $150 million,19 and 1979 sales are estimated to have 

been almost double that amount. 

In 1975, the most recent year for which data are available, 

optometrists dispensed about three-fourths of all contact lenses; 

14 Aphakic contact lens wearers are usually either very young 

(in the case of congenital cataracts) or very elderly. 

Of the several million American aphakes, as many as a million 

may be contact lens wearers. 

15 One major lens manufacturer estimated total contact lens 

sales in 1978 at 3 million pairs. Frigitronics, Inc., 

1978 Annual Report 14. Approximately half of all sales 

were to new wearers, while the other half were replacement 

or duplicate lenses. Interview with Edward A. Por ter , Group Counsel, Opticks, Inc., April 13, 1979. 

16 Of that number , 600,000 were fitted with hard lenses 

and 2.1 million were fitted with soft lenses. "1979 CLMA 

Convention Program Reflects Industry Strength and Growth," 

supra note 12, at 96. 

17 Frigitronics, Inc., 1978 Annual Report 14. 

18 Id. 

19 Id. 

153 
opticians and ophthalmologists shared the remainder of the market. 20 

c. Analysis of State Laws 

Ophthalmologists and optometrists are permitted in all 

50 states and the District of Columbia to perform all the procedures necessary to prescribe, and fit contact lenses. 21 

20 Gordon R. Trapnell Consulting Actuaries, The I mpact of 

National Health Insurance on the Use and Spending for Sight 

Correction Services, Table 11 (Janua r y 1976), Exhibit II68 at R. 1973. It is staff's opinion that these three 

f i tter g r oups share the contact lens market somewhat more 

equally now. 

21 The prescription, fitting, and dispensing of contact lenses 

is often defined as the practice of optometry. 

Any person who is engaged in ... the prescribing 

of contact lenses, or the fitting or adaptation of 

contact lenses to the human eye ... is engaged in 

the practice of optometry. 

Colo. Rev. Stat. 12-40-102. See,~, Del . Code tit. 

24 § 210l(a)(3); Mich. Comp. Laws Ann.§ 33 . 1740l(iv) ; 

w. Va. Code§ 30-8-2(c). 

These optometric practice acts usually explictly 

exempt physicians and surgeons. 

This article shall not apply to the practices of 

his profession by a physician or surgeon. 

Colo. Rev. Stat. 12-40-l0S(a). See,~, Md. Ann. Code 

art. 43. § 380( 1 ); Mont. Rev. Code Ann. § 66-1302(k) (2); 

Vt. Stat. Ann. tit. 26 , § 1 603. 

Optometrists or ophthalmologists are generally permitted 

to delegate their authority to perform these procedures 

to ancillary personnel they employ. 

A technician in the office ... [and] acting under 

the direct responsibility and supervision of the 

physician and surgeon or optometrist may fit prescription lenses. 

Cal. Bus. & Prof. Code§ 2544 (Deering). See,~, Ala. 

Code tit. 34, § 34-33-4; Colo. Rev. Stat. 21-4-l0S(a); 

(Footnote Continued) 

154 
0 Opticians may never prescribe contact lenses,22 and are prohibited 

(or apparently prohibited) from performing independently some 

or all of the acts necessary to fit contact lenses in many states. 

In ·a few states, opticians are explicitly authorized to 

perform the post-refraction procedures necessary to fit contact 

lenses. Opticians in such states may measure the curvature 

of the corneas, specify the various elements of the physical 

design of the lens, and evaluate the fit of the lenses. 23 

Some states expressly forbid opticians to fit contact lenses. 24 

Other states allow opticians to fit contact lenses only 

if they do so under the supervision of or on the direction of 

21 (Footnote Continued) 

Ill. Rev. Stat. Ch 111, § 3803. Contra, N.J. Stat. Ann 

§ 52:17B-41.l(West). 

22 In no state are opticians permitted to test or measure 

the refractive state of the eye. Whether they are fitting 

and dispensing eyeglasses or contact lenses, opticians 

must work pursuant to the prescription prepared by the 

ophthalmologist or optometrist. 

23 "Dispensing optician" •.• means any person ... who dispenses . . . contact lenses ... to the 

intended wearer on written prescription from a . 

physician or optometrist, and in accordance with 

such prescription interprets, measures, adapts, 

fits or adjusts the same for the aid of correction 

or vision. 

Ariz. Rev. Stat. § 32-1671. See,~' Conn. Comm'n of 

Opticians Regulations§ 20-141-l0a. 

24 A [ n] [ophthalmic dispenser or ophthalmic technician] . is specifically prohibited from engaging in the 

practice of ..• fitting contact lenses ... 

N.J. Stat. Ann. § 52: 17B-41 (West). See,~' Op. Atty. 

Gen. of Vt . No. 10 (Sept. 29, 1966). 

155 
an optometrist or ophthalmologist.25 

Some states permit opticians to sell contact lenses, 

but require that all the lens design specifications be determined 

by an ophthalmologist or optometrist. 26 

In several states, the practice of optometry is statutorily 

deJEined to include the adaptation of contact lenses (or all 

lenses) for the purpose of correcting visual problems. The 

role which opticians may play in contact lens fitting in some 

of these states (particularly those which do not have analogous 

statutes defining the scope of practice of opticians) is not 

clear. The state courts and state attorneys general which have 

bei~n called upon to judge (under a variety of factual contexts) 

whether or not an optician was violating such a statute have 

come to inconsistent conclusions. 27 

25 [D]ispensing opticians may fit contact lenses in the 

presence of and under the direct supervision of a 

licensed optometrist or ophthalmologist. 

Tenn. Code Ann. § 63-1402. Cf. Op. Atty. Gen. of Va. (March 

17, 1977) (Virginia statute which allows opticians to fit 

contact lenses on the prescription of or under the direction 

of an ophthalmologist or optometrist does not require that 

optician be physically located on the same premises as 

the prescriber). 

26 Hard contact lenses may be sold or dispensed in a 

retail optical dispensary •.. only when authorized 

by an optometrist or ophthalmologist and the prescription therefor contains all necessary data. 

Ala. Code tit. 34, § 34-22-4. 

27 In State ex rel. Londerholm v. Doolin & Shaw, 209 Kan. 

244, 497 P. 2d 138 (1972), the Kansas Supreme Court inter-

(Footnote Continued) 

156 
27 

The following chart represents an attempt at categorizing 

state laws, board regulations, and judicial and attorneys' general 

opinions which affect opticians ' ability to fit and dispense 

contact lenses. Making such categorizati ons is often difficult, 

(Footnote Continued) 

preted the Kansas optometry statut e (Kan. Stat. Ann. § 65-

1501 et seq.), which includes within the definition of 

the practice of optometry the adaptation of lenses for 

the aid of visual defects. The court held that opticians 

could, after receiving a simple spectacle l e ns prescription 

and a statement that the patient may be fitted with contact 

lenses from the refractionist, do everything else necessary 

to fit contact lenses. 

But the Missouri Supreme Court, interpr eting similar 

statutory language, came to the opposite conclusion in 

State ex rel. Danforth v. Dale Curteman, Inc., 480 S.W. 

2cf848 (Mo. 1972). Although the Missouri court admitted 

that defendant opticians were recognized as proficient 

contact l ens fitters by outstanding physicians, it felt 

compelled by the language of the Missouri optometry law 

(Mo. Ann. Stat. § 336.010 et s~.) to enjoin defendants 

from engaging in contact lens fitting. 

Therefore, even though both states have enacted almost 

identical statutes, opticians in Kansas are allowed to 

use a keratometer, trial lenses and fluorescein, to determine 

l ens diameter, thickness and curve specifications, and 

to establish a wearing schedule and make subsequent assessment of lens fit, while opticians in Missouri are permitted 

to do none of those things. 

Compare Fl a. Ass'n of Dispensi ng Opticians v. Fla. 

State Bd. of Optometry, 238 So. 2d 839 (Fla. 1970); State 

Bd of Optometry v. Chester, 169 So. 2d 468 (Miss. 1 964); 

High v. Ridgeway's Opticians 129 S.E. 2d 301 (N.C. 1963); 

and Stat e ex rel. Clifton v. Reeser, 543, P. 2d 1379 (Okla. 

1975) with Fields v. D.C., 232 A.2d 300 (D.C. 1967); People 

ex rel--:---watson v. House of Vision, 322 N.E . 2d 15 (Ill. 

1974); Commonwealth ex rel. Ky. Bd. of Optometric Examiners 

v. Economy Optical Co., 522 S.W. 2d 444 (Ky. 1975); and 

S.C. Bd. of Examiners in Optometry v. Cohen, 180 S.E.2d 

650 (S.C. 1971) . For a discussion and analysis of most 

of these cases, see 77 A.L.R. 3d 8 17. 

1 57 
either because the applicable state law is ambiguous or because 

actual practices in a jurisdiction appear to be inconsistent 

with state law. 

CONTACT LENS FITTING BY OPTICIANS: A CATEGORIZATION OF STATE LAWS 

I. States where 

tact lenses: 

opticians are expressly permitted to fit conArizona 

Connecticut 

Kansas 

Massachusetts 

North Carolina 

Ohio 

II. States where opticians 

contact lenses: 

are expressly forbidden to fit 

Missouri 

New Jersey 

New Mexico 

Vermont 

III. States where opticians may fit contact 

tion of or under the supe rvision of an 

optometrist: 

lenses on the direcophthalmologist or 

Alaska 

California 

Colorado 

Delaware 

Florida 

Hawaii 

Illinois 

Kentucky 

Mississippi 

Nevada 

New York 

Oregon 

South Carolina 

Tennessee 

Texas 

Virginia 

IV. States where opticians may dispense 

a fully-written prescription: 

contact lenses on 

Alabama 

District of Columbia 

Florida 

V. States where law o n the question is ambiguous or non-existent: 

Arkansas 

Georgia 

Idaho 

Indiana 

Iowa 

Louisiana 

Maine 

Maryland 

Michigan 

Minnesota 

Montana 

Nebraska 

New Hampshire 

North Dakota 

Oklahoma 

Pennsylvania 

Rhode Island 

South Dakota 

Utah 

Washing ton 

West Virgina 

Wisconsin 

158 
D. Justification for Restrictions on Contact Lens Fitting 

by Opticians 

It is clear that errors of omission or commission by an 

incompetent contact lens fitter can cause serious harm to a 

contact lens wearer. 

The wearing of contact lenses always produces certain 

changes in corneal physiology. Some of those changes are usually 

considered acceptable, while others are not. Most unacceptable 

tissue changes, such as corneal abrasions (erosion of the cell 

layers on the surface of the cornea) and corneal edema (swelling 

caused by the accumulation of fluid in corneal tissue), are 

reversible. Other physiopathological changes, such as fungal 

infections and corneal vascularization (extension of blood 

vessels into the normally avascular cornea) may lead to permanent damage, including blindness. 28 

Some ophthalmologists and optometrists feel that opticians 

generally do not have sufficient knowledge and skill to fit 

contact lenses safely and effectively and that, as a result, 

the removal of restrictions on the fitting of contact lenses 

by opticians would lead to an increase in the kinds of problems 

described above. 29 Those opinions seem generally to be based 

28 J. Dixon, Physiopathology of the Cornea as Related to Contact 

Lenses, in Corneal and Scleral Contact Lenses 30-39 (L. 

Girard ed. 1967). 

29 It is also true that some ophthalmologists feel that 

optometrists are unqualified to fit contact lenses, and 

vice versa. See, w•, Honan, Indiana M.D. Describes "Short 

Route to Medicine,' The Pen, June 1, 1978, at 3-4: Globus, 

Meaningful Communications Marketing from Optometry -- Part 

l, Optometric Monthly, April 1978, at 63-66. 

159 
on the fact that there are no forma l educational standards 

for optici anry, or that the majority of states do not require 

that opticians be licensed.30 

E. Effects of Public Regulation of Contact Lens Fitters and 

Dispensers 

Little reliable evi dence of the economic effects of current 

regulation of contact lens fitting or the comparative quality 

of fittings performed by opthalmologists, optometrists, and 

opticians is currently available.31 

The evidence which does exist tends to show that prices 

are lower in areas where opticians are permitted to engage in 

contact lens fitting . A 1975 price survey of contact lens fitters 

in Alameda and Contra Costa Counties , California , found that 

opticians charged an average of $50 less than optometrists 

and $65 less than ophthalmologists for hard contact lenses , 

and an average of $45 less than optometrists and $60 less 

than ophthalmologists for soft lenses. 32 In May , 1978, a 

prominent Delaware optician stated that his prices for contact 

30 Only 20 states license opticians. Seep. 16 note 43, supra. 

31 The results of the Commission ' s "Contact Lens Wearer Study " 

will provide more complete cost information. Information 

concerning comparative contact lens prices has been collected, 

but has only been preliminari ly analyzed. A discussion of 

the prel iminary findings concerning cost is found in Section 

F , infra. 

32 D. Schletter, Optical I llusion: A Consumer View of Eye 

Care 56 (San Francisco Consumer Action, 1976), Exhibit 

II- 65. Because the prices reported by opticians in that 

study probably did not include the initial eye examination , that price dif ferential is somewhat exaggerated. 

1 60 
lenses were, on the average, $70-$75 lower than optometrists 

and ophthalmologists who practiced in that area. 33 A South 

Carolina optician claimed that the price of contact lenses in 

that state dropped 50% when opticians entered the market.3 4 

There also exists evidence which indicates that state-imposed 

restrictions which prevent opticians from fitting contact lenses 

may be unnecessary to protect consumers from harm. 

It is clear that some opticians are thorough l y qualified 

to fit contact lenses successfully. 35 In fact, some individual 

opticians have demonstrated an ability to fit consumers who 

were unsuccessfully fitted by ophthalmologists and optometri sts. 36 

The use of opticians (o r " contact lens technicians'' ) in 

contact lens fitting is recognized in the professional literature 

33 Interview with Edwin P . J. Kuhwald , May 25, 1978. The price 

differentials cited by Mr. Kubwal d do take the cost of 

the initial eye examination into account. 

34 Letter from K. Richard Davenport to Terry Latanich , April 30 , 1979 . 

35 The individual defendant has been an opti­ cian since 1955; since 1959 he has f i tted 

conta ct lenses to at least 8 ,000 people, 

with no complaint or injury. There is no 

indication that the health, safety or welfare of the residents of Massachusetts has 

been in any way endangered by any acti vity 

of the defendants. 

Attorney General v. Kenco Optics , Inc., 3 40 N.E.2d 868, 

869 (Mass. 1976) . 

36 Letter from Edwin P.J. Kuhwald to Terry S. Latanich, 

December 1, 1977 (author of letter is an optician who 

states that he has successfully r efitted 250 consumers 

who were previously fitted improperly by optometrists). 

161 
as an accepted practice.37 Many ophthalmologists and optometr ists routinely delegate much of the contact lens fitting function to opticians whom they employ, 38 and some willingly release 

prescriptions to patients who wish to be fitted by independent 

opticians. 39 

To generate more detailed and trustworthy data about the 

effects of public regulation of contact lens fitters and dispensers than is currently available , we have designed and have 

conducted a study of contact lens wearers. 

F • The Contact Lens Wearer Study 

37 L. Girard, The Ophthalmologist-Techn ician Relationship, 

in Corneal Contact Lenses 269-74 (2nd ed. 1970) (the optician shoul d be responsible for keratometry, use of trial 

lenses, lens design, initial fitting, lens modification, 

instruction of patient in lens handling, and wearing time 

scheduling). 

38 Testimony of Dr. Gordon S. Black, Tr. 4567-69; testimony 

of Robert C. Troast, President, New Jersey State Board 

of Examiners of Ophthalmic Dispensers and Ophthalmic 

Technicians, Tr. 2012. 

39 Customarily, a person who wants contact 

lenses in Massachusetts is examined by an 

ophthalmologist or an optometrist and a prescription is secured. The ophthalmologist 

rarely fits the contact lenses. Fitting 

may be made by the optometrist, or either 

the ophthalmologist or the optometrist may 

send the person with a prescription to an 

optician for fitting .... Forty-eight 

ophthalmologists in the Boston- Lynn area 

have referred patients to the individual 

defendant [optician] for such fitting, as 

have the Bo ston University Medical Center 

Clinic, the Boston City Hospital Eye Clinic, 

and the Harvard University Health Services. 

Attorney General v. Kenco Optics, Inc., 340 N.E.2d 869, 

869 (Mass. 1976). 

162 
Because there is no known source of statistically reliable 

data concerning the effects of current public and private restrictions on the price and quality of contact lenses dispensed by 

the different provider groups, we designed and administered 

a study to gather this information. 

The "Contact Lens Wearer Study" had its genesis in the 

summer of 1978, when we began to explore the feasibility of 

performing such research. The basic methodology of the study 

was designed after meetings with representatives of ophthalmology, 

optometry, and opticianry, in October, 1978. 40 The major methodological features of the study were finalized in March, 1979, and 

the individual field examiners and examination sites were identified. The on-site data collection process began in June, 1979, 

and was completed in February, 1980. 

Two national market research firms identified, through the use 

of mailed questionnaires, approximately 500 representative consumers 

in nineteen metropolitan areas who were willing to be interviewed 

and examined by the Commission's staff and consultants. 41 Inter40 The Contact Lens Association of Ophthalmologists (through 

its executive vice-president), the American Optometric 

Association, and the Opticians Association of America 

(through the National Committee of Contact Lens Examiners) 

have contracted to assist FTC staff design, perform and 

evaluate the study. 

41 The mailing has also identified several hundred people 

who have been fitted for contact lenses but who are no 

longer wearing them. Each of these "failures" was asked 

to identify his or her fitter and explain why he or she 

is no longer wearing lenses . Data about these unsuccessful 

wearers will be analyzed and compared to the da ta gathered 

from current wearers who are examined and interviewed in 

(Footnote Cont inued ) 

163 
views and examinations took place at medical or optometric school 

clinical facilities or private practitioners' offices in each 

of those metropolitan areas. 

Members of the Comm ission' s staff interviewed each wearer 

to ascertain the source of the initial contact lens fitting 

and ireplacement lenses, the price of the lenses and related 

services, the lens care and wearing habits of the wearer, and 

other significant information. 

Each wearer was then examined by a team consisting of an 

ophthalmologist , an optometrist, and an optician (assisted 

by certain ancillary personnel). 

First, the wearer's visual acuity with contact lenses was 

tested. Then, a refraction was performed to determine whe ther 

the wearer's vision had been over- or under-corrected by his 

or her fitter. 

Then, the wearer removed his or her lenses, and biomicroscopic and keratometric examinations were performed. These procedures were designed to detect the presence and degree of various 

physiological or pathological conditions, including: epithelial 

and rnicrocystic edema (intercellular accumulation of fluid 

which causes the cornea to swell); corneal staining (abrasions 

or lesions of the cornea); corneal vascularization (impingement 

of blood vessels into the normally avascular cornea, which may 

(Footnote Continued) 

person. If necessary, follow-up interviews of these unsuccessful wearers may be performed. 

164 

41 
cause part or all of the cor:nea to opacify); corneal striae 

(ridges or furrows on the cornea); corneal warpage (change in 

the curvatures of the cornea); and injection ("bloodshot" eyes 

or eyelids). At the same time, the lens itself was measured 

and examined for dirtiness and physical damage (such as scratches, 

chips, tears, or warpage). 

Each wearer's original fitter will now be asked to 

provide information about his or her mode of practice and about 

various facets of the wearer's visual history. By obtaining 

information about the wearer's history , we will be able to 

detect changes in visual acuity or corneal physiology over 

time. 

This methodology represents an attempt to quantify and 

objectify what constitutes successful (or unsuccessful) contact lens fitting. This simple fact that we and the rival 

professional groups involved were able to reach a consensus 

a s to what constitutes ''quality" in this area is itself significant. 

The results of these interviews and examinations, as quantified on the data forms designed by the Commission's staff 

42 after consultation with the three participating industry groups, 

will be analyzed and then formally commented upon by those groups. 

The study will, in our estimation, provide the most reliable 

data in existence on the following questions: 

42 Copies of these forms are found in Section K, infra. 

165 
1. Are there systematic price differentials between ophthalmologists, optometrists and opticians in states where all 

three groups compete in the contact lens fitting market? 

2. Do ophthalmologists and optometrists in states where 

opticians are not permitted to compete in the contact 

lens fitting market charge systematically higher prices 

than their counterparts in states which permit opticians 

to fit contact lenses? If so, can the higher prices be 

attributed to the absence of opticians in the contact 

lens fitting market? 

3. What is the comparative level of quality of contact 

lens fitting services provided by ophthalmologists, optometrists and opticians? 

With these data, the Commission will have the evidence 

necessary to make an informed decision as to what, if any, 

action is appropriate. 

Although data collection is not yet complete43 and analysis 

of the data that has been collected has just begun, we are able 

to make some very crude and preliminary predictions about what 

the answers to the above questions will be. 

It now appears more likely than not that the final results 

will show that prices for both soft and hard contact lenses 

are generally lower in states where opticians are permitted 

to fit contact lenses and in states where high-volume "commercial " 

optometric practices thrive than in states where opticians are 

excluded from the contact lens market and where commercial providers 

are less prevalent. (It is impossible to say now whether the 

We plan to send a follow-up questionnaire to the original 

fitters to obtain information which will enable us to 

identify and categorize each fitter as an optometrist, 

opthalrnologist or optician. In addition, we will obtain 

from the fitters the original contact lens specifications 

of the survey subjects. 

16 6 

43 
presence of opticians or the presence of commercial optometric 

practices has the greater effect on contact l e n s prices). 

It also appears that very few con tact lens wearers exhibit 

any serious pathological conditions due to poor fitting practices. At this time, there is no reason to believe that optic ians 

have fitted a relatively higher proportion of those people with 

serious problems than optometrists or ophthalmologists have 

fitted. 

Our recommendations concerning initial contact lens fitting 

by opticians are found in Section I below. But first we will discuss the related issue of dispensing of replacement or duplicate 

contact lenses. 

G. Effects of Private Re~lation of Replacement 

Contact Lens Dis~nsing 

o r Duplicate 

The average contact lens wearer has to replace one lens 

every year, e ither because the lens is damaged or because it 

is lost. 44 Those who initially fit contact lenses usually 

also provide replacement lenses. If the fitter r efuses to 

release contact lens specifications to a consumer who needs a 

replacement lens, the consumer is forced to purchase the lens 

45 from the original fitter or undergo a complete refitting process. 

44 American Optometric Association, Contact Lens News Backgrounder 14 (April 1978). 

45 In such a situation, the original fitter has a virtually unchecked unilateral power to fix the price of the replacement lens. The only limiting factors on this power are 

the prices charged by competing fitters for complete 

refittings and the presence of competing fitters who are 

willing to release contact lens specifications (although 

(Footnote Continued) 

167 
It is likely that a large number of contac t lens wearers 

are denied access to their lens specifications and, therefore, are 

forced to purchase replacement lenses from their original fitters.46 

The economic effects of such privately-imposed restri c tions 

on replacement lens wearers are analogous to the economi c effects 

of refusals to release eyeglass prescriptions. 

As part of the study , wearers were asked several questions 

about the source of replacement or duplicate lenses, the cost 

of the lenses, whether an examination was perfo r med a t the t ime 

the lens was dispensed, and whether the wearer attempte d to 

purchase lenses from a source o t her than the or igi na ] fitter 

(and, if so, what his or he r e xperiences were). We believe 

that these data will provide some guidance on the 1esirability 

45 (Footnote Continued) 

it is very doubtful that many consumers take this factor 

into account when choosing the initial fitter). 

46 See,~, letter from Louanna Gaiser to Federal Trade 

Commission {March 20 , 1980); letter from Edwin J. Verrette 

to Federal Trade Commission, {March 11, 1980); letter from 

Carol Osufsen to Federal Trade Commission (December 20, 

1979); letter from Teresa Stinnett to Fe1eral Trade Commission (October 12, 1979); letter from Marjorie Gallo 

to Federal Trade Commission {June 25, 1979): letter from 

Larry A. Penner to Gary Hailey (July 9, 1979); letter from 

Ronald L. Williams to Federal Trade Commission (June 28, 

1979); letter from Lea Monath to Federal Trade Commission 

(May 10, 1979); letter from Gretchen Matteson to Federal 

Trade Commission (March 28, 1979); letter from Sylvia Chipp 

to Albert H. Kramer, Federal Trade Commission, (March 12 , 1979); letter from Laura Kochones to Fede ral Trade Commission 

( February 2, 1979); testimony of Billie J. Odom, Tr. 55 

a t 63. 

168 
47 

of requiring that the original fitter provide each consumer 

with a complete set of contact lens specifications which that 

consumer could use to obtain replacement lenses from the provider 

of his or her choice . 

A preliminary analysis of that data indicates that prices 

charged for replacement lenses vary widely. 47 The four charts 

below illustrate the disparity in both out-of-pocket costs and 

"total" costs (defined as out-of-pocket cost plus insurance 

prc~mium cost, if any) for hard and soft lenses. 

Several of the consumers who have written to complain that 

they could not obtain replacement lenses from tow~cost 

providers because their fitters would not release cofuplet~ 

contact lens prescriptions have also cited wide price var{­

ances. Letter from Lea Monath to the Federal Trade Commission 

(May 10, 1979) (cost of lenses from fitter was "more than 

double" that of competitor); letter from Gretchen Matteson 

to Federal Trade Commission (March 28, 1979) (fitter charged 

$100 per pair for replacement lenses; competitor would 

have 6harged $20 per pair); letter from Laura Kochones 

to Federal Trade Commission (February 2, 1979) (fitter's 

price was $60 per pair; competitor's was $20 per pair). 

169 
so . 

40 . 

NUMBER OF 

CONSUMERS 

30 . 

I-' 

-.J 

0 

20 . 21 

10 . 

so - !l, 99. 

30 

$10 

l!i. 99. 

45 

$ 20 

29, 99. 

1, DISTRIBUTION OF OUT~OF-POCKET 

REPLACEMENT COSTS FOR INDIVIDUAL 

HARD LENSES ln=137l 

29 

l 

7 

4 

~ 

. - . $ 40 . - . $50 

0 . 

~ - -- r l 

$70 

l 0 

$80 

0 

$9.0 

0 

$100 

39,99 49,99 59., 99. 69.,99. 7 9.. 9.9. 89.., 9.9 99.• 9.9. up 

REPLACEMENT LENS OUT-OF-POCKET COST RANGES 
--

so 

40 ' 2. DISTRIBUTION OF OUT-OF-POCKET 

REPLACEMENT COSTS FOR INDIVIDUAL 

SOFT LENSES (n= l07) 

30 

28 ! 

25 . 

NUMBER OF 

CONSUMERS 

I-' 

-..J 

t--' 

-

9 

4 

..$60 

20 

16 15 

10 

5 3 f 1 f 2 t 0 . 0 . .. $0 $10 $20 $30 $40 $50 $70 $80 $90 $100 - 9. 99. 19. 99. 29 • 9.9. 39.99 49,99 59.• 99 69,99 79 . 99 89 , 99 99.99 up 

REPLACEMENT LENS OUT-OF-POCKET COST RANGES 
50 ""' 

f 3 i - --

l4 

r7~o 

' 

43 

18 

-

a 

5 

DISTRIBUTION OF TOTAL 

. 40 

3. 

REPLACEMENT COSTS FOR INDIVIDUAL 

HARD LENSES (n =121} 

39 . 

NUMBER OF 

CONSUMERS 

20 . 

I-' 

-..J 

N 10 . 

4 0 0 I 1 . 0 . . $30 $40 ~ $6 0 ~ $80 $90 $100 $10 $20 

69,99 79.99 89.99 99.99 up $0 -

9.99 19.99 29.99 39.99 49.99 59.99 

REPLACEMENT LENS TOTAL COST RANGES 

~ 
so 

40 

30 

NUMBER OF 

CONSUMERS 

20 

t--' 

...J 

w 

4, DISTRIBUTION OF TOTA~ REPLACEMENT 

COSTS FOR I NDIVIDUAL SOFT LENSES 

(n=81) 

I 16 I I 1s 15

I r- 10 1 I i I 11 

11 I r I r- I 5 3 1 3 0 I I I I I I I ~ I I I I I l C I I ] 1

$20 $30 $40 $50 $60 $70 $80 $90 $100 -

9 , 99 19.99 29 . 99 

$0 - $10 

39.99 49.99 59.99 69 . 99 79.99 89, 99. 99,99 up 

REPLACEMENT LENS TOTAL COST RANGES 
r 

H. Recommendations Concerning Replacement Contact Lenses 

We re commend that the release-of-prescription requirement 

in the Eyeglasses I Rule be expanded to require that ophthalmologists, optometrists and opticians (where permitted by state 

law to fit contact lenses) who dispense contact l enses give to 

the patient a complete set of his or her contact l e ns specifications 

at the completion of the initial contact lens fitting process. 

This recommendation does not in any way affect who may initially 

fit or dispense contact lenses under state law. 

A rule requiring that consumers be given a complete contact 

lens prescription (that is, a spectacle prescription combined 

with contact lens specifications) would enable those who have been 

forced to purchase replacement lenses from higher-priced providers 

to obtain lenses from lower-pri ced prov iders without undergoing 

a new fitting procedure. Our preliminary analysis fails to 

indicate how such a rule would have any adverse impact on the 

quality of care that contact lens wearers would receive. There 

is no currently available evidence indicating that the lenses 

dispensed by lower-priced providers are of any lower quality 

than those dispensed by higher-priced providers. 48 

48 Some of the most prominent low-priced hard lens providers 

claim to obtain their lenses from the same laboratori es 

from which higher-pr iced providers also obtain lenses. 

The identity of the retail provider has virtually nothing 

to do with quality of soft lenses. Unlike hard lenses, 

soft lenses are not custom-prepared for individual wearers; 

rather, they are uniform, mass-produced lenses supplied 

by only a few manufacturers. Soft lens manufacture and 

distribution is closely regulated by the Food and Drug 

Administration. The vast majority of soft lens wearers 

wear the Bausch and Lomb "Soflens." 

174 
Neither is there any evidence now available whi ch shows 

that higher-priced providers offer higher quality services than 

do lower-priced providers. some replacement lens providers 

verify that the lens specifications are correct and examine 

the fit of the lens upon the cornea before dispensing it to 

the consumer , a procedure which some practi tioners claim is 

necessary to detect any problems with the replacement lens, 

while others simply order the lens from the manufacturer or 

distributor and deliver it to the wearer. Although it was 

impossible in the context of the contact l ens wearer study to 

evaluate the thoroughness or skillfulness with which such examinations were performed, that study did determine the extent 

to which examinations were performed at all when replacement 

lenses were dispensed. 

Further statistical analysis will be necessary before it 

is known whether or not higher-priced providers are more likely 

to examine conslli~ers when lenses are dispensed. But the table 

below shows that fewer than half of the contact lens wearer 

study subjects interviewed had been examined when replacement 

lenses were provided and that, furthermore, there were no statistically 

significant differences in examination frequency among opticians , 

optometrists, and ophthalmologists. 

PERCENTAGE OF FITTERS PERFORMING EXAMINATION 

OF WEARER WHEN REPLACEMENT LENS IS PROVIDED 

Type of Fitter % Performed Examination % Did Not Examine 

Opticians 48% 

(n~l9) 

52% 

(n~21) 

175 
Optometrists 48% 52% 

(n=Sl) (n=S6) 

Ophthalmologists 39% 61% 

(n=20) (n=32) 

All Fitters 41% 59% 

(n=l02) (n=l49) 

All Hard Lens Fitters 36% 64% 

(n=52) (n=91) 

All Soft Lens Fitters 49% 51% 

(n=57) (n=59) 

Requiring the release of a complete contact lens prescription would also enable consumers to purchase replacement lenses 

from mail-order lens providers. Although the few mail-order 

firms currently operating provide only a r elatively small number 

of replacement lenses, their market share could inc rease significantly if all contact lens wearers were able to obtain 

their complete lens specifications. Some practitioners feel 

that ordering replacement lenses by mail is a dangerous procedure because , obviously, mail-order firms cannot examine the 

wearer to make sure the lens fits properly. 49 We intend to 

explore more fully the issue of mail order replacement contact 

lenses in the rulemaking proceeding. 

Of course , consumers may be able to obtain such an examination from a local fitter. Advertising materials and order 

forms supplied by the most prominent mail-order replacement 

See,~-, Fritz, Mail Order Replacement Contact Lenses: 

Do Consumers Benefit?, New England Optician, March 1979, 

at 9-13; letter from Paul R. Honan, M.D., to Christine 

Latsey (March 1, 1979). 

17 6 

49 
lens firms advise consumers to go to a local practitioner for 

50 follow-up care. At this time, it is impossible to say whether 

or not a lower percentage of mail- order replacement lens consumers receive examinations than do other wearers. (It should 

also be noted that several contact lens wearer study subjects 

stated that their fitters had mailed replacement lenses to 

them when it was inconvenient for the wearers to pick them 

up in person . ) 

I. Reasons for 

ceeding. 

Severing Certain Issues from Rulemaking ProWe believe that recent developments make it advisable to 

sever our examination of initial contact lens fitting practices 

from this rulemaking proceeding . We recommend that those issues 

be explored in separate public hearings (which could result 

in the issuance of a model state law or other appropriate action). 

The decision in American Optometric Association v. FTc51 

did not provide the anticipated judicial resolution of questions 

concerning the scope (or existence) of the Commission's preemption authority. So we are left with a substantial commitment 

of Bureau of Consumer Protection resources to matters which 

potentially involve preemption and no firm basis for predicting 

the ultimate legal viability of any of those projects. If an 

50 One firm even mails the lenses to the original fitter for 

dispensing rather than to the consumer. Untitled pamphlet 

from Contact Lens Guild , Inc. , received December 10 , 1979. 

51 No . 78-1461 (D .C . Cir. Feb. 6, 1980) . 

177 
"Eyeglasses II'' rule is promulgated (whether or not in its recommended form), it may help define the Commission's authority 

to preempt state laws. 

The proposed rule which we are recommending only preempts 

state restrictions on the form of practice -- business activities 

in which the Commission has recognized expertise -- not on 

the scope of practice. In light of the growing sentiment (in 

both the legislative and judicial arenas) in favor of increased 

deference to state governments, we feel it would be unwise fo r 

the Commission to assert the authority to preempt state determinations of who can provide cer tain goods and services. 

The complexities surrounding initial contact lens fitting 

are such that the Commissi on could not simply preempt outright 

bans of contact lens fitting by opticians (which would, in reality, 

force the states to respond with more carefully tailored entr y 

requirements). Preemption of scope of practice restrictions 

may prove appropriate in another context, but we cannot recommend 

such a course in this matter at this time. 52 

Because it is clear that scope of practice regulati on 

is a major factor which limits competition in the health care 

It should also be noted that our preliminary analysis of 

the contact lens wearer study data fails to demonstrate 

with certainty that the presence of opticians in the 

initial fitting market has a significant beneficial impact 

on price. So there i ;. some question as to whether or 

not we could satisfy the Section 5 unfairness standard 

in this area. 

178 

52 
and other professional service markets, we make this recommendation reluctantly. But the fact is that scope of practice determinations in the health care area have traditionally been made 

solely by the states. Proposing and promulgating a rule on 

initial contact lens fitting may encourage a reviewing court 

to extend the holding of National League of Cities v. Usery53 

to matters of traditional e,tate control as well as to matters 

integral to the functioning of the state as a sovereign. Such 

a result would jeopardize any exercise of preemption by the 

Commission. 

Therefore, our recommendation is that the issue of initial 

contact lens fitting by opticians be explored separately and 

dealt wifh, if necessary, by issuing a model state law. If 

efforts to implement reform at the state level fail (and if 

any legal challenges to an "Eyeglasses II" rule are resolved 

favorably), the Commission may wish to pursue formal rulemaking in the area of initial fitting. 

There are many practical difficulties which face the drafters 

of a trade regulation rule or model state legislation on this 

subject. It is reasonable to assume the available evidence 

might support neither the absolute exclusion of non-optometrist, 

non-ophthalmologist contact: lens fitters nor a completely unrestricted market. But any solution other than those two extremes 

must address the problem of: determining who and under what circum426 U.S. 833 (1976). 

179 

53 
stances someone other than an optometrist or ophthalmolgist 

should be permitted to fit contact lenses. 

The traditional means o f limiting entry only to qualified 

practitioners is licensing. Several states do require opticians 

to pass special licensing examinations be f ore they can fit 

contact lenses. 54 And at least one private group has developed 

a voluntary certification examination for contact l ens fitters. 55 

As in any other profession or occupation, the design and administration of a licensing scheme for contact lens technicians 

would be a comp licated and controversial endeavor. It would 

be particularly difficult in this area -- where new fitting 

techniques and new lens materials and designs seem to appear 

almost daily to ensure that the licensing examinati on was 

up to date. It might also be necessary to prevent the scope 

of contact lens fitting by opticians from including certain 

situations where lens are used therapeutically to treat diseased 

or trarnautized eyes.56 

Although these practical difficulties should not be minimized, we are confident that the Commission will be able to 

deal with these issues once sufficient relevant evidence has 

54 See, ~-, N.Y. Educ. Law § 7124(b) (McKinney). 

55 The "Contact Lens Registry Exam," developed by the National 

Committee of Contact Lens Examiners with the assistance 

of the Educational Testing Service, has recently been 

adopted for use as a licensing examination by some states. 

56 Because so few of these relatively rare conditions appeared 

in contact lens wearer study subjects, that study will 

provide little or no useful data on this issue. 

180 
become available. Although the Commission may fashion remedies 

under the "preventive" clause of Section 18(a)(l)(B), its rulemaking authority is primarily proscriptive -- that is, it may 

prohibit conduct found to be unfair . Such a grant of authority 

is not well-suited to the complexities and subtleties of creating 

a new kind of health care provider. Such considerations are 

not troublesome if the problem is addressed through model legislation rather than a trade regulation rule. 

J. Conclusion 

As stated above, we believe that it is advisable to sever 

the issues concerning initial contact lens fitting from this 

rulernaking proceeding. We recommend that the evidence provided 

by this study , as it relates to the questions about initial 

contact lens fitting posed above, be explored in public, quasilegislative hearings held separately from but concurrently to 

the rulemaking hearings. Such a procedure could result in the 

issuance of a model state law on the subject. 

We recommend that the issue of whether or not the releaseof- prescription rule be expanded to cover complete contact 

lens specifications be explor ed in the rulemaking hearings. 

The political, legal, and practical considerations which led 

us to recommend separate treatment of the evidence involving 

initial contact lens fitting do not apply in the context of 

replacement lenses. 

181 
K. Contact Lens Study Forms 

In the pages which follow we have attached copies of the 

forms used in the contact lens study. The "Assistants' Form" 

was used to record the contact lens wearer's visual acuity and 

to record information about the physical condition of the co ntact lens itself. The "Examiners' Form" was used by the 

optometrist, ophthalmologist and optician examiners to record 

the presence and degree of various physiological or pathological 

conditions found during the examination procedure. The "Patient 

Interview Form" was used by an FTC staff member to record the 

responses to an oral interview of each wearer. 

182 
ASSISTANTS ' FORMS 

Location: 

Patient: 

Examiner: 

0.D. o.s. 

I . 

II. 

III. 

VISUAL ACUITY 

POWER OF LENS 

LENS STATUS 

(if applicable) 

Cleanliness 0 1 2 3 

Damage (Chips, tears , or 0 1 2 3 

scratches) 

Warpage 0 1 2 3 

0= no dirt, damage, or warpage (or condition 

not applicable) 

l=minimal dirt, damage, or warpage 

2=moderate dirt, damage, or warpage 

3=considerable dirt, damage, or warpage 

0 

0 

0 

1 

1 

1 

2 

2 

2 

3 

3 

3 

183 
Patient Interview Form 

Patient ID Number 

Time of Interview 

Inte rviewe r 

1. What type of lenses do you wear, hard or soft? 

hard 

soft 

2. What time today did you insert your lenses? 

3. When did you purchase them? (MONTH and YEAR) 

Now , I'd like to ask you a few questions about how you 

like your lenses. 

4. Do they cause 

No ----- PROBE: 

1es--- --PROBE: 

you any discomfort? 

Wha t about when you first put them in, or 

late at night after you have been wearing 

them for a long time? 

No/Very Rarely (Only under unusual circumstances) 

Minimal (on insertion; after very long wearing 

period) 

Are you able to wear them all day, or only 

for short periods of time? 

Moderate (throughout the day) 

Severe (only intermittant wear possible) 

5. Row about your vision? In general, would you say that you 

are very satisfied, satisfied, or not satisfied with your 

vision when you wear you lenses? 

Very satisfied 

Satisfied 

Not satisfied 

184 
-----

6. Do you notice any difference at night? (E.G. , GLARE PROBLEMS) 

Yes (Specify) 

No--PROBE ON GLARE 

Now I'd like to get some information about where you bought 

your lenses. 

7. First, who fit and sold you your lenses? Do you recall 

his/ her address? 

INTERVIEWER: IF RESPONDENT GIVES NAME OF M.D. OR 0.0 ., 

CHECK APPROPRIATE LINE BELOW (IF KNOWN - OTHERWISE CHECK 

LATER IN YELLOW PAGES). IF RESPONDENT GIVES TRADE NAME, 

E.G., "THE CONTACT LENS CLINIC," PROBE TO GET IDENTITY 

OF FITTER. 

CHECK ONE: 

Ophthalmologist 

Optometrist 

Optician 

8. Before you were fitted for contact lenses you had an eye 

examination. Was that examination done by the person who 

fitted your lenses, or did you first have an examination 

by someone else at a different location? 

Fitter (Skip to #10) 

Someone else was "pr escriber " 

NAME: O.D. M.D. 

ADDRESS: 

9. Did Dr. [PRESCRIBER] suggest that you go to [FITTER] to 

get your lenses? 

Yes 

No 

185 
--------

--------

--------

10. Thinking back to when you were trying out your lenses, 

( a ) were you instructed how to insert and remove them? 

(b) were you taught how to clean and care for them? 

[GO THROUGH ENTIRE SERIES ON INSERTION/REMOVAL , THEN REPEAT 

FOR CLEANING/CARE] 

Insertion/removal cleaning/care 

-------- Yes 

No 

11. Who taught you , [FITTER] or his/her assistant? 

Insertion/ removal cleaning/ care 

Fitter 

Assistant 

Both 

Don ' t remember 

12. Were you taught individually, or were you in a group? 

Insertion/ removal cleaning/care 

Individual 

Instruction 

Group Instruction 

13. Were any materials used? For example , were you given any 

written instructions (OTHER THAN WEARING SCHEDULES) or 

did you see a movie? [IF RESPONDENT ONLY MENTIONS WEARING 

SCHEDULE - PROBE TO SEE IF IT CONTAI NED ANY INFORMATION 

ON INSERTI ON , CARE, ETC.] 

Printed material s 

Manufacturer ' s instructions (package 

inserts) 

Audio-visual instruction 

None 

[MAKE SURE YOU'VE GONE THROUGH ABOVE SERIES TWICE] 

186 
--

----

0 14. Now I ' d like to ask about follow-up care. By follow-up 

care," I mean care you received while you were getting 

used to wearing your lenses. How many times did you return 

to [FITTER] for follow-up care after you were first given 

your lenses to take home. 

(INTERVIEWER: INQUIRE ABOUT THE TIME INTERVALS OF VISITS 

TO CHECK THAT THEY ' RE FOLLOW-UP CARE AND NOT ROUTINE CHECKUPS. VISITS MORE THAN 6 MONTHS AFTER DISPENSING ARE NOT 

CONSIDERED FOLLOW-UP CARE.) 

(number of visits) 

15. We ' ve just discussed follow- up visits. After you finished 

that sequence , were you instructed to come back after a 

certain time period for a check- up? [PROBE TO GET SPECIFIC 

RESPONSE] 

Instructed by fitter to return to fitter 

Instructed by fitter to return to prescriber 

Instructed by fitter to return to both 

fitter and prescriber 

No instruction by fitter 

Instructed by prescriber to return for 

re-examination 

16. How often were you told to come back? [IF TOLD TO GO TO 

BOTH, NOTE TIME RECOMMENDATION FOR BOTH] 

Every months (to fitter) 

Every ____months (to prescriber) 

17. Have you gone back for regular check-ups? [PROBE] 

Yes, to fitter 

Yes , to prescriber (if other than fitter) 

Yes , to both 

No , did not have re-examination 

No , not time to go yet (recently fitted) 

187 
-----

-----

-----

18. Now , I'd like to ask you about how you take car e of your 

lenses. Specifically, what do you do to cle an and care 

for them? 

SOFT LENS WEARERS HARD LENS WEARERS 

Heat sterilization/ Cleaning solution 

saline solution 

Chemical sterilization _____ Wetting solution 

Neither Soaking solution 

_____ Tap water 

Other (baby 

shampoo? ) 

"Dry" storage 

19. Can you tell me the brand names of the products that you 

use? 

[INTERVIEWER: IF NOT EASILY ANSWERED, DO NOT PROBE] 

20. Do you wear lenses every day, or nearly every day? 

_____ Yes 

No 

21. In general, about how many hours a day do you wear them? 

hours a day 

22. Do you usually wear them continuously, or do you r emove 

and reinsert them during the day? 

One continuous wearing period 

______ Two wearing periods 

Three or more wearing periods 

23. How much did you pay for your lenses? 

$_____ (Amount) 

188 
24 . Does that amount include: 

a. The eye examination? 

Yes 

No, extra charge was$---- b. Follow-up care? 

Yes - PROBE: Were you told that 

you would have to pay 

extra if follow-up 

visits exceeded a set 

number? 

Yes 

No 

Don't remember 

No, extra charge was$----- c. Initial care kit , solutions, equipment, etc. 

Yes 

No , extra charge was$------- d. Insurance? 

Yes (Sk ip to #25) 

No 

Did you buy any insurance? 

No 

Yes, at a cost of$------ 25 . Have you ever tried to wear contact lenses before? 

----- No (Sk ip to #29) 

Yes - PROBE: How many times? 

Once 

More than once 

(RECORD INFORMATION FOR EACH ATTEMPT) 

189 
26. What happened? Why weren't you satisfied? Any other reasons? 

( INTERVIEWER: DO NOT REl:1.D RESPONSES. CHECK ALL REASONS 

MENTIONED BY RESPONDENT.) 

Experience #1 Experience #2 

Discomfort 

Abrasion/Medical Problems 

Like eyeglasses better 

Unsatisfied with vision 

Spectacle blur 

Too much troubl e to care for 

Didn't replace lost lenses 

Didn't trust fitter 

Other (Sp1E!cify) 

27. When did this previous fitting occur? 

28. Do you recall the name and address of the person who fit 

your lenses that time? 

Experience #1 Experience #2 

29. Have you ever lost or scratched a lens (or pair of lenses) 

and had to buy a replacement? 

No (TERMINATE INTERVIEW) 

Yes 

30. How much did it cost you (per l ens)? If you've replaced 

a lens/ lenses more than once , let's just take -the most 

recent replacement. 

$ 

190 
31. Did you have any insurance coverage? 

No 

Yes, policy paid$--- per lens 

32. Where did you buy your replacement lens? 

Original fitter (Skip to #35) 

Other - NAME : 

ADDRESS: 

33 . Did [SUPPLIER - NAMED IN QUESTION 32) : 

a. examine your eyes? 

Yes 

No 

b . instruct you to have the fit evaluated by someone 

else? 

Yes 

No 

34 . Why didn ' t you go back to [FITTER] to buy the replacement 

lens? 

Price 

Convenience (consume r had changed residence , etc.) 

Other (Specify) 

TERMINATE INTERVIEW 

35 . When you got your new lens/ lenses , were your eyes examined 

or did you simply pick it up at [FITTER' S OFFICE]? 

Fitter examined consumer when new lens was 

dispensed 

No exam 

191 
-----

36. Did you try to buy a replacement lens/ lenses from someone 

other than [FITTER]? 

No (TERMINATE INTERVIEW) 

Yes 

37. What happened? 

Original fitter would not release contact 

lens specifications 

Other (specify) 

192 
V. LEGAL ISSUES 

A. Legal Basis for the Proposed Rule 

1. Introduction 

We believe that the evidence discussed earlier in this 

report - - in particular the results of our studies -- shows 

that r estrictions on commercial ophthalmic practice and duplication of lenses by opticians and the failure of c on tact lens 

fitters to release complete contact lens prescriptions may be 

unfair acts or practices within the meaning of Section 5(a) (1) 

of the FTC Act. We recommend that the Commission initiate a 

formal rulernaking proceeding under Section 1 8 of the FTC Act 

to determine if these restrictions are unfair acts or practices. 

Section 18 (a) (l)(B) of the Federal Trade Commission Act1 

contains the Commission ' s rulemaki ng a u t hority co ncerning "unfair 

acts or practices": 

The Commission may prescribe rules which 

define with specificity acts or practices 

which are unfair or deceptive acts or practices in or affecting commerce (within the 

meaning of such Section 5(a) (1)). 2 Rules 

under this subparagraph may include requirements prescribed for the purpose of preventing such acts or practices. 

A thoroug h analysis of t he meaning of "unfair " was presented 

l 15 U.S.C. § 57a(a) (1) (B). 

2 Secti on S(a)( l ), 15 U.S.C. 45 (1976) , of the FTC Act, 

provides that unfair acts or practices in or affecting 

commerce are unlawful. 

193 
in the Eyeglasses I Statement of Basis and Purpose.3 As a result 

of that analysis, set forth in the footnote below to facilitate 

·reference, 4 the Commission concluded that no single formulation 

3 Advertising of Ophthalmic Goods and Services, Statement 

of Basis and Purpose, 16 C. F.R. Part 456, 43 Fed. Reg. 23992 

(June 2, 1978) (hereinafter referred to as "Eyeglasses I 

Statement of Basis and Purpose"). 

4 The term "unfair" cannot be narrowly defined. 

When the Federal Trade Commission was created, 

Congress made a deliberate policy choice to 

adopt a general standard, giving the Commission, subject to review by the courts, both 

the r esponsibility and the authority to 

develop more precise articulations of the 

meaning of "unfair" in the context of specific 

industries or situations. Nor did the Congress 

intend that the meaning of the term be static. 

Economic and social development creates new 

problems which require new answers, and time 

and thought bring new insights into the nature 

of trade regulation problems and the efficacy 

of possible remedies. The Commission is charged 

with the responsibility of combining the functions 

of a court of equity with those of an expert 

body to develop concepts of "unfair acts or 

practices" appropriate to the issues cif the 

present time . 

Instead of undertaking to define what practices should be deemed unfair, as had been 

done in earlier legislation, the act left 

the determination to the Commission. Experience with existing laws had taught that 

definition, being necessarily rigid, would 

prove embarrassing and , if rigorously applied, 

might involve great hardship .. . Furthermore, an enumeration, however comprehensive 

of existing methods of unfair competition, 

must necessarily soon prove incomplete, as 

with new conditions constantly arising novel 

unfair methods would be devised and developed. 

[FTC v . Gratz, 253 U.S . 421, 436- 37 (1920) 

(dissenting opinion of Mr. Justice Brandeis), 

dissent adopted, FTC v. Brown Shoe Co., 384 

U.S. 316, 320-21 (1.966); cited with approval 

in FTC v. Sperry & Hutchinson Co., 405 U.S. 

(Footnote Continued) 

194 
4 

of unfairness is appropriate in all contexts. The unfairness 

(Footnote Continued) 

233 (1972). See also H.R. Rept. No. 1142, 

63rd Cong., 2dSess'":-18-19 (1914); s. Rept. 

No. 597, 63rd Cong., 2d Sess. 13 (1914).] 

* * * * * 

In the last analysis, the Commission's 

responsibility in this area is to enforce 

a sense of basic fairness in business conduct. For while Section 5 "does not authorize 

regulation which has no purpose other than 

• • . censoring the morals of businessmen" 

[FTC v. R.F. Keppel & Bro., Inc., 291 U.S. 

304, 313 (1934)], the Commission cannot shirk 

the difficult task of defining and preventing 

those breaches of the principles of fair dealing that cause substantial and unjustifiable 

public injury. [Statement of Basis and Purpose of Trade Regulation Rule 408, Unfair 

or Deceptive Advertising and Labeling of 

Cigarettes in Relation to Health Hazards of 

Smoking, 29 Fed. Reg. 8324, 54-55 (1964)}. 

* * * * * 

In a complex economy, consumer injury can 

be caused by intricate chains of interaction 

among many participants, and the Commission 

is not prevented from acting simply because 

it is difficult to pinpoint the blame. Section 5, like other statutes administered by 

the Commission, is "unfinished law which the 

administrative body must complete before it 

is ready for application." [(FTC v. Ruberoid 

Co., 343 U.S. 470, 485 (1952) (dissenting 

opinion of Mr. Justice Jackson) (footnote 

omitted)). The intent of the Congress was 

to protect consumers from unwarranted injury 

in the marketplace. Thus, in carrying out 

its mandate to "finish" the law, since 1964 

the Commission has increasingly concentrated 

on the examination of whether particular acts 

or practices are, in fact, causing injury, 

and on how and why they do so. [(Schwartz, 

Regulating Unfair Practices Under the FTC 

(Footnote Continued) 

195 
test used in Eyeglasses I had two components: 

(1) Whether the acts or practices result in substantial 

injury to consumers. In making this determination 

both the economic and social benefits and losses 

flowing from the challen~Jed conduct must be assessed,5 

(2) Whether the challen9ed conduct offends public policy. 6 

In the AOA d ecision, the D. C. Circuit upheld that portion 

of the Eyeglasses I Rule which requires that ophthalmologists 

4 (Footnote Continued) 

Act: The Need for a Legal Standard of Fairness, 

11 Akron L. Rev. 1 (1977)). In addition, 

the Commission examines other public policies 

as articulated by other responsible bodies 

in the society that have weighed the acts 

or practices, to see if they have found some 

justification or compensatory benefit, and 

to determine whether the Commission 's action 

does p romote public policy as expressed in 

other contexts. [Th:is inquiry is not always 

an easy one. There are many possible sources 

from which a sense of prevailing public 

policy can be gleaned, and they are not always 

consistent wi th each other. The Commission 

must often balance conflicting policies and 

come to its own conclusions. And, of course, 

a practice may offend Section 5 even if it 

is spec ifically approved by state law. See 

FTC v. Sperry & Hutchinson Co., 405 U.S.~3, 

239 n. 4 (1972); Spiegel, Inc. v. FTC , 540 

F.2d 287 (7th Cir. 1976)]. 

Eyeglasses I Statement of Basis and Purpose, supra note 

3 at 24000. 

5 Id. This consumer injury determination has also been 

called a "balancing of ii1terests " or "marketplace fairness" 

test which can be used to decide whether prohibiting 

the practice provides greater social or economic benefit 

than permitting it to continue. Pfizer, Inc., 81 F.T.C. 23, 

60-63 (1972), (complaint dismissed). ~ FTC v. Sperry 

v. Hutchinson Co., 405 U.S. 233, 244 (1972). 

6 Eyeglasses I Statement of Basis and Purpose, supra note 3 

at 24001. 

196 
and optometrists provide each of their patients with a copy of 

his or her prescription at the conclusion of an eye exa~ination.7 

This provision was based on the two-part test of unfairness 

set forth above. We believe that the court's upholding of that 

provision can be v iewed as support for the appropriateness of 

this standard for Section 5 unfairness. 

Both Eyeglasses I and Eyeglasses II focus on state and 

private restrictions on ophthalmic practice which may injur e 

consumers by increasing costs and limiting the availability 

of eye care goods and services without offering countervailing 

benefits. The justification offered for the restrictions at 

issue in Eyeglasses II -- they protect the public health and 

safety by assuring high-quality eye care -- is the same one 

offered in support of the restrictions which were the subject 

of the Eyeglasses I investigation. Because of the similarities 

between the Eyeglasses I and Eyeglasses I I investigations, we 

believe that the same unfairness standard that was used in the 

first proceeding should be used in this one. 

2. Consumer Injury 

We believe the evidence presented above shows substantial 

consumer injury is occurring due to the public and private 

restrictions at issue. Parts I, II, and IV of our report 

describe in detail the increased costs that result from each 

of these restrictions. That evidence also indicates that these 

7 ~merican Optometric Association v. FTC, CCH 1980-1 Trade Cas . 

I 62,165 at 77,810 (D.C. Cir. 198 0). 

197 
restrictions reduce consumption of ophthalmic products and services. 

The consumer injury test r equires a finding of net injury 

to consumers. So, the Commission must also determine whether 

these restrictions have produced any offsetting economic or 

social benefits. 8 The justification advanced in support of 

these restrictions is that they are necessary to ensure that 

consumers receive high-quality eye care. The studies described 

above provide a statistical measure of the effect of these restrictions on the quality of eye care received by consumers.9 We 

believe that those studies prove that the quality of care is 

not enhanced by the restrictive laws and practices at issue. 

(a) Commercial Practice Restrictions 

In determining whether commercial practice restrictions result 

in net consumer injury, we must first measure how these restrictions 

affect the price of vision care. The results of the Bureau 

of Economics study, which measured both the price and quality 

effects of restrictions on commercial practice, show that these 

restrictions increase the prices consumers pay for vision 

8 Eyeglasses I Statement of Basis and Purpose, supra note 3, 

at 24000. 

9 The measurement of quality must examine not only the quality 

of care delivered to consumers, but also whether some consumers are receiving no care at all. If higher quality 

raises costs, decreasing the frequency of care, then there 

may not be any quality gain at all when viewed from the 

perspective of the level of care received by the population as a whole. 

1 98 
care.IO The study found that average prices for vision care 

goods and services were significantly lower in cities where 

commercial ophthalmic practice was not restricted. Specifically, 

the average price charged for an eye examination plus eyeglasses 

was $72 in cities where commE!rcial practice was permitted but $94 

in cities where commercial practice was restricted. 1 1 Commercia l 

providers charged significantly lowe r prices than non-commercial 

providers (the largest pric e differential of $32 was between large 

commercial firms in cities where commercial practice was permitted 

and non-commercial providers in cities where commerc ial practice 

was proscribed), and non-commercial providers who operated in 

cities where commercial practice was permitted charged on the 

average $20 less than their counterparts in cities where commercial 

practice was restricted.12 

A second component of net consumer injury is the effect 

of commercial practice restrictions on the frequency with which 

eye care is purchased. In Part I of this report, we show that 

the level of consumption of vision care is inversely related 

to its price. 1 3 Thus, to the extent that commercial practice 

1 0 The Bureau of Economics study's findings on price are corroborated by ear lier studies. These studies are discussed 

i n Par t I o f th i s Repor t. 

11 Bureau of Economics, Federal Trade Commission, Economic 

Report -- Effects of Restr i ctions on Advertising and Commercial Practice in the Professions: The Case of Optometry 

at p. 5 (Apri l 1980) [hereinafter c ited as "BE study" ]. 

12 Id. at 4-5. 

13 See pp. 84-86, supra. 

199 
restrictions result in higher pric es, they prevent some consumers 

from obtaining care at all (or from obtaining it as frequently 

as they otherwise would). In addition, we have s hown that office 

location may have an effect on a consumer's decision to purchase 

14 vision care. Available information indicates that commercial 

providers tend to locate in high-traffic, easily accessible 

areas. 

Although commercial practice restrictions cause prices 

to be higher and make vision care less accessible, net consumer 

injury will occur only if there is no c ounterv ailing justification or consumer benefit that flows from the se restrictions. 

The data from the Bureau of Economics study show that restrictions 

on commercial practice are correlated with thorough eye examinations 

when comparing non-commercial and commercial providers, but do 

not correlate with the accuracy of prescriptions written by the 

different categories of providers, the quality of eyeglasses 

produced or the extent of unnecessary prescribing of eyeglasse s . 

When comparing average quality between commercial and non-commercial 

states there is no difference in quality at all. In measuring 

the efficacy of commercial practice restrictions in terms of 

maintaining or elevating the quality of vision care, the BE 

study results show that quality is the same in both types of 

markets -- an equal percentage of optometrists in cities where 

comme t'cial practice is proscribed offer less thorough eye exam14 I d . 

200 
inations as in cities where commercial practice is permitted . 

Based on these results, we believe that the overall costs of 

commercial practice restrictions are not offset by increases in 

quality. Some commercial firms may offer a less thorough eye 

examination, but so do some non-commercial optometrists in c ities 

where commercial practice is restricted. And when quality is 

held constant, a package consisting of an eye examination and 

eyeglasses costs significantly less in markets where commercial 

practice is permitted. 

(b) Duplication of Lenses 

We believe that state restrictions on duplication of lenses 

without a prescription also cause net consumer injury. If duplication is not ' permitted , one alternative available to the consumer 

is to return to the original eyeglass dispenser who probably 

has a copy of his or her p r escription on file . If forced to 

return to the original provider, the consumer can not shop for 

a better bargain . (In addition, it may be inconvenient or even 

impossible for the consumer to return to the original dispenser, 

as where the consumer has moved to another city. ) 

The second alternative available to a consumer who wishes 

to obtain duplicate or replacement eyeglasses in a state where 

duplication of lenses without a prescription is prohibited is 

to undergo another eye examination. This wil l cost, on the 

average , $25 in addition to the cost of the new eyeg lasses. 15 

15 Seep. 93, supra. 

201 
The data we have presented in Part II of this report demonstrate 

that state restrictions on duplication clearly force some consumers to undergo needless eye examinations. 16 

The results of the duplication study show that there is 

some quality of care concern associated with the process of duplication.17 However, the remedy we recommend does not involve 

the preemption of state-imposed bans on duplication. Rather, 

we recommend that consumers be guaranteed access to their current 

eyeglasses prescriptions. The evidence from the duplication 

and Bureau of Economics studies shows that preparation of duplicate 

lenses from the original prescription is more accurate than the process of neutralization of existing eyeglasses or undergoing a new eye 

examination. 1 8 So our remedy would not only mitigate the existing 

economic injury but would also increase the quality of care 

received by consumers who desire to obtain duplicate or replacement eyeglasses which accurately produce the visual correction 

present in their existing eyeglasses. 

(c) Replacement Contact Lenses 

Our preliminary analysis of the data from the contact lens 

study indicates that prices for replacement contact lenses vary 

widely. Given that the average contact lens wearer loses or 

damages one lens every year, the ability to engage in comparison 

16 See p . 102, supra. 

17 See pp. 115-123, supra. 

18 See pp. 125-131, supra. 

202 
shopping for replacement lenses could result in substantial 

savings for consumers. 

If a contact lens f i tter refuses to release contact lens 

specifications to a consumer who needs a r eplacement lens , the 

consumer is forced to purchase the lens from the original fitter 

(without being able to shop around) , or to undergo a complete 

refitting process (the cost of which will include a substantial 

professional fee as well as the cost of the replacement lens 

or l enses). Thus, we beli eve that these privately-imposed restrictions 

which prevent contact lens wearers from obtaining replacement 

lenses from the dispenser of their choice cause significant 

economic injury to consumers. 

Our recommendation -- that a consumer be given a copy of 

his or her complete contact lens prescription - - would enable 

those contact lens wearers who have been forced to purchase 

replacement lenses from higher priced providers to obtain replacement lenses of equal quality from lower pr iced provide r s without 

undergoing a new fitting procedure. 

There is no evidence that contact lenses dispensed by lowe r 

priced providers are of a lower quality than those dispensed 

by higher priced providers. Nor is there any evidence that 

higher pri ced providers offer higher quality care than lower 

pri ced providers. Al t hough some practitioners claim that when 

r eplacement contact lenses are dispen sed the dispenser. should 

first verify that the lens specifications are correct and examine 

the fit of _the lens upon the cornea, preliminary analysis of the 

cont act lens study data ind i cate that fewer than half of t he 

203 
contact lens wearer study subjects interviewed had been examined 

when replacement lenses were dispensed and that substantially 

equal proportions of ophthal~ologists, optometr ists , and opticians 

performed such examinations. 

3 . Pub 1 i c Po 1 icy 

The second part of the unfairness test requ ires a de termination 

that these public and private restrictions offend public policy.19 

The evidence presented earlier indicates that these restrictions 

may have two negative effects on consumers : (1) they may increase 

the costs of eye care goods and services, and (2) they may decrease 

consumer access to these goods and services. 

Both of these effects are contrary to clear national policies. 

The National Health Planning c1nd Resources Development Act of 1974 

explicitly presented these policies as a finding of Cong r ess: "The 

achievement of equal access to quality health care at a reasonable 

cost is a priority of the Federal Government. " 20 

The 1979 Amendments to Titles XV and XVI of the Public 

Health Service Act call for: 

19 The fact that these restrictions are established by state 

law does not shield them from an unfairness analysis that 

determines whether they ~ay violate other public policies. 

Spiegel, Inc. v. FTC, 540 F.2d 287 (7th Cir. 1976). 

20 42 U.S.C. § 300k(a)(l)(l976). 

Some commentators have indicated that there is a national 

consensus that every American ought to have access to necessary medical care that meets minimal standards of quality. 

David Mechanic , The Medical Marketplace and its Deliv~ 

Failures in Area Studies: Public Interest Law i n Action, 

·3so-s1 (1978). 

204 
. . . the strengthening of competitive forces 

in the health services industry wherever 

competition and consumer choice can constructively s erve ... to advance the purposes 

of . . . cost effectiveness and access. 21 

This Congressional finding evidences two related public policies. 

The first focuses on the cost of and the second examines consumers ' 

access to quality health care. 

a. Cost Control 

Congress and the States have enacted a number of statutes 

that are directed at controlling the rapidly increasing costs 

of quality health care . 

Some of this legislation has taken a direct regulatory 

approach, attempting to control supply or limit third-party reimbursement for unnecessary medical services. State certificateof-need legislation r e stricts the building and expansion of 

unnecessary health care facilities by requiring review and certification prior to new investments exceeding a specified dollar 

threshhold.22 The National Health Planning and Resources Development Act of 1974 requires states to institute certificate-of-need 

programs by 1980 to receive federal funds23 and the Social Security 

Act Amendments of 1972 denies Medicaid-Medicare reimbursement 

21 Pub. L. No. 96-79, § 1502 , 93 Stat. 592. 

22 Office of Policy Planning , Federal Trade Com~ission, Health 

Services Policy Session Briefing Book 53 (June 5, 1979) 

[hereinafter cited as "Health Policy Briefing Book"]. 

Some of the discussion in this section is adapted from 

this source , which provides a more complete description 

of many of these health policy issues, 

23 42 U.S.C. § 300k et. ~- (1976). 

205 
to health care facilities that have expanded without meeting 

state certificate-of-need requirements. 24 These Social Security 

Act Amendments a lso provide for the creation of Professional 

Standards Review Or ganizations which are groups of physicians 

who review the medical practice of other physicians in their 

community to decide if the presc r ibed treatment was medically 

necessary or if it could have been performed at a lower cost 

in a different setting.25 

Other legislation designed to l ower the cost of health 

care does not rely on direct regulation. Instead, it adopts 

a market-oriented strategy that is designed to encourage the 

growth of alternative delivery systems. 26 

The appearance of new kinds of health care practitioners 

should result in increased competition. Thes e alternative providers, such as nurse practitioners, physician assistants, and 

dental auxiliaries, perform many of the routine tasks in the 

27 provision of primary health care. Recognizing that increased 

24 42 u.s .c. § 1320a-1(1976). 

25 42. U.S.C. § 1320c-4. 

26 For a fuller discussion of market-oriented approaches, 

see Health Policy Briefing Book, supra note 22 at 58-68. 

27 H.R. Report No. 94-266, 94th Cong., 2d Sess. 22, 59-61, 

reprinted in 1976 U.S . Code Cong. and Ad. New 4964. 

Some studies indicate that these providers may be able 

to deliver certain services at lower cost than docto r s or 

dentists. See Congressional Budget Office, U.S. Congress, 

Physician Extenders: Their Current and Future Role in 

Medical Care Delivery 12-22 (1979); Health Policy Briefing 

Book, supra note 22 at 65. 

206 
competition may lead to lower health care costs, Congress has 

supported the development of these new health practitioners. 

The Health Professi ons Educational Assistance Act of 1976 provides grants to medical and dental schools or other institutions to meet the costs of programs for the training of physician 

assistants and dental auxiliaries. 28 

A second market strategy aims at reducing costs by shifting 

the saving incentive from the consumer to the health care p r ovider. 

In prepaid health plans, such as Health Maintenance Organizations , 

consumers do not pay on a fee-for-service basis, but rather 

are provided with comprehensive health care services for a single 

prepaid fee. 29 By putting the provider at risk, cost containment incentives may be shifted from the consumer to the provider. 

This may lead to preventative medical visits which can eliminate the need for costly intensive care. 30 As with alternative 

providers, Congress has supported the growth of these prepaid 

plans because of their potential for curbing rising costs. 

The Health Maintenance Organization Act of 1973 supports the 

growth of HMO's by providing for grants , loans, and loan guarantees for the planning and operation of HM0 1 s 31 and preempts state 

28 42 u.s.c. § 295g - 3 (1976) . 

29 s . Rep. No. 93-129, 93rd Cong., 

in 1973 U.S. Code Cong. and Ad. 

1st Sess. (1973) , News 3033. reprinted 

30 Id. 

31 42 U.S.C. § 300e2-8 (1974). 

207 
laws that restrict the cost-containing HMO delivery format.32 

b. Access to Health Care 

Because of the geographic maldistribution of health manpower 

and income barriers, many Americans find it difficult to gain 

access to health care. Recent legislation has evidenced a strong 

national policy of making health care more accessible. 

Medicare and Medicaid were designed to remove income barriers 

to health services by providing reimbursement for hospital and 

medical 33 expenses of the aged and the poor . Hospitals that 

received construction funds under the Hill-Burton program had 

to promise to provide a reasonable volume of services to those 

persons unable to pay for them . 34 

Initial efforts to correct geographic maldistribution of 

health care personnel were aimed at increasing the number of 

physicians.35 Despite significant increases in total supply , 

however , geographic maldistribution persisted.3 6 Congress has 

therefore directed its most recent efforts at shifting the distribution of health care personnel. In establishing and expanding 

the National Health Service Corps Scholarship program, Congress 

provided scholarships and funds to medical , dental , nursing 

32 42 u.s.c. § 300e- 10 ( 1 974). 

33 42 u.s .c . § 1395 et . ~- (1976). 

34 42 u.s .c. § 29l(e ) (1976). 

35 See Health 

Tr. Policy Briefing Book , supra note 22, at 54, n. 

H.R. Rep. 94 - 266, su:era note 27, at 26-38. 

208 

36 
and other health care students and former Corps members who 

are willing to serve for a designated period of time i n a health 

manpower shortage area.3 7 

A provision of the Health Professions Educational Assistance Act of 1976 authorized funds for new Area Health Education 

Centers to train residents in remote sites, retrain personnel 

living in remote areas, plan programs to meet an a r ea's health 

manpower needs, encourage the use of nurse practitioners and 

physician assistants in these areas and provide education to 

individuals in these areas on the availability and appropriate 

use of health services. 38 Federal funding also has helped to 

establish and promote health care centers in areas where existing 

facilities or medical personnel are in short supply.39 

Because "physicians might be attracted to or remain in underserved areas if they were assisted by new health practitioners 

who would enable physicians to focus on the more difficult medical 

problems in the community," 4 0 Congress has moved to allow allied 

health personnel to perform more primary care tasks. The Rural 

37 42 u.s.c. § 294t(b)(4)(1976). 

38 4 2 U.S.C . § 2 9 Sg-1 (19 7 6) . 

39 

~, ~-, 42 U.S.C.§ 246 (Supp. 1979) (grants for comprehensive health planning and public health services); 42 

u.s.c. § 2689 ~ ~- (Supp. 1979) (grants for community 

mental health cetners); 42 U.S.C § 254c (1976) (grants 

to develop community health centers). 

40 H.R. Rep. No. 94-266, supra note 27, at 60. 

209 

,A; 
Health Clinic Services Amendments to the Social Security Act 41 

broadened Medicare- Medicaid coverage to include services performed 

by primary care practitioners (nurse practitioners and physician 

assistants) in rural health clinics. This new program shows 

that Congress has recognized that alternative providers may 

be more like l y to locate in areas of physician scarcity and 

can therefore provide care to many who have not received it 

before. 

Our discussion has shown that increasing consumers ' access 

to quality hea l th care is an important national policy. State 

laws which restrict commercial practice or prevent duplication 

of lenses by opticians and private refusals to r elease ophthalmic 

prescriptions may have the effect of l imiti ng this access. First, 

by i ncreasing the cost of care, these restrictions help maintain 

income barriers to vision care. Second , commercial firms and 

opticians may locate in near or underserved inner-city areas 

where 42 they can provide highly- visible , low- cost care. Eve n 

41 42 U.S.C. § 1395k (1976). 

42 Recent HEW regulations designated health manpower shortage 

areas throughout the United States, 44 Fed. Reg. 46222 

(Aug. 6 , 1979). In establishing criteria for areas having 

shortages of vision care manpower (which i ncludes ophthalmologists and optometrists), consideration was given to 

economic or cultural barriers which would limit a population ' s access to ophthalmic resources. 42 C.F.R. 5. These 

criteria encompass medically underserved inner-city areas 

as well as rural a r eas. 

In order to determine if there is any correlation between 

areas of vision care manpower shortages and commercia l 

practice restrictions, we compared restrictions (based 

on the information in our files) with shortage areas on 

(Footnote Continued) 

210 
if no indication of relocation is found, we believe that removal 

of commercial practice restrictions may increase consumer access 

to vision care. Without commercial practice restraints, many 

providers choose to locate in high-volume mercantile locations. 

These areas may be more centrally located and more accessible 

to public transportation. These factors are especially important for the elderly who often suffer from decreased mobility.43 

c. The Free Market 

There is also a more general public policy on which we 

can rely. The public policy of this country favors the existence of free markets to the maximum extent possible.44 The 

42 (Footnote Continued) 

a state by state basis . Our analy~is showed that there 

is some support for the proposition that these restrictions 

may limit consumer ' s access to vision care. The data from 

twenty-six states and the District of Columbia supported 

the hypothesis by showi ng that states with restrictions 

had at least some areas of manpower shortage, and those 

without restrictions had none. On the other hand, the 

information from 17 states did not support the proposi- tion and the data from seven states is inconclusive . 

Although no firm conclusion may be drawn from this data, we 

believe that it presents some reason to believe that commercial practice restraints do limit access to care . We plan 

to explore this issue in much greater detail. 

43 See Testimony of Donald Reilley, Deputy Commissioner on 

Aging, ~dministration on Aging , Department of HEW , Tr. 111 

at 115; Testimony of Edith Barksdale-Sloan, Director, D.C. 

Office of Consumer Affairs, Tr. 609 at 615. 

44 See , e . g., Sherman Act, 15 U. S.C. § 1; Clayton Act, 15 U.S.C. 

TT2; Federal Trade Commission Act , 15 U.S. C. § 41 et . ~-; 

BNA ' s ~ntitrust and Trade Regulation Report, Nos. 895-920 

(Jan. -June 1979), Report to the President and the Attorney 

General of the National Commission for the Review of Antitrust­ Laws and Procedures at 50-51 {Jan. 22 , 1979) (exceptions to 

the free market should be justified by compelling reasons) . (Footnote Continued) 

211 
restrictions that are the subject of this investigation must be 

examined in light of this fundamental policy. 

There are several factors that are essential for the proper 

functioning of the free market. A large number of buyers and 

sellers, availability of information, a lack of excessive transaction costs, a lack of costs or benefits external to the decision process, and mobility of resources all are required for 

45 a market to operate efficiently . Both the scope of practice 

and commercial practice restrictions and private failures to 

release prescriptions may interfere with the existence of an 

efficient market. 

Scope of practice restrictions limit entry into certain 

segments of the ophthalmic market. The number of providers 

of services that consumers may select are therefore limited 

and the large number of sellers necessary for an efficient 

allocation of resources may not be generated by market forces. 

44 (Footnote Continued) 

As the Commission said in the Eyeglasses I Statement of 

Basis and Purpose, 

.. • as a general proposition a marketperfecting solution to a perceived problem 

is preferable. There should be a heavy burden of proof on those who would opt for a 

different form of economic organi z ation. 

Eyeglasses I Statement of Basis and Purpose, supra note 

3, at 24001. 

45 ~,~,Paul Samuelson, Economics 36-76, 371-616 (6th 

ed . 1964) . 

212 
Failures to release prescriptions also limit the available number of providers . These limits on supply inhibit the normal 

downward pressure on prices that truly competitive market conditions e xert. 

Commercial practice restrictions impose barriers to an 

ophthalmic p r ovider ' s decision to expand. Unable to increase 

the s ize of the firm to take advantage of various economies 

of scale, the firm may not be able to produce at its most efficient level. These r estrictions also limit the number of provider 

outlets and reduce the availability of services. Consumers may 

spend more time searching out and obtaining ophthalmic services, 

increasing their transaction costs. 

4. Conclusion 

While the proposed rule is supported by all of these public policies , t here are no d i rect precedents or closely analogous case law or statutes on which to base the r ule. In the 

past, consumer protecti on activities were basically limited 

to stopping unethical marketing practices and policing deceptive 

advertising . Identifying cases or statutes to support such activities was re l atively simple since the conduct had long been condemned as unfair or immoral . Although these traditional consumer 

protection activities are still important, it has become apparent 

that many major. consumer problems will not be solved unless the 

Commission moves beyond these areas . 

The Commission is not precluded from acting merely because 

the acts and practices have not previously been considered unlawful 

or because there is no specific precedent for the proposed action. 

213 
As Judge Hand stated: 

Its [the Commission's] powers are not confined to such practices as would be unlawful before it acted; they are more than 

procedural; its duty in part at any rate, 

is to discover and make explicit those 

unexpressed standards of fair dealing which 

the conscience of the community may progressively develop.46 

We believe that the general public policies we have discussed, together with the evidence providing strong indications 

that consumers suffer serious injury as a result of the restrictions at issue, support a finding that these restrictions may 

be unfair acts or practices. We therefore recommend that the 

Commission initiate a formal Magnuson-Moss rulemaking proceeding 

to examine these ophthalmic practice restrictions. 

B. Remedial Considerations 

1. Introduction 

Although we recommend that the Commission initiate a MagnusonMoss rulemaking proceeding to consider the issues raised in the 

Eyeglasses II investigation, we admit that questions concerning 

the ultimate likelihood of a trade regulation rule affecting 

scope of practice in this matter remain. One issue that must 

be examined is the extent to which a Commission trade regulation 

rule can preempt state law. 

The remedial problems we must face in this proceeding are 

not limited to preemption. The state and private restrictions 

46 FTC v. Standard Education Society, 86 F . 2d 692, 696 (2d 

Cir. 1936), rev'd on other grounds, 302 U.S. 112 (1937). 

See Sperry and Hutchinson, supra note 5, at 244-45. 

214 
under investigation are defended as necessary to protect the 

public health and safety by maintaining or elevating the quality 

of care delivered by the three professions. Our initial 

examination of that justification indicates that, in some 

instances, there may be tradeoffs between price and quality 

and that some of these restrictions may provide some measure of 

protection for the public. 47 (However, in the areas in which we 

are recommending preemption in this proceeding, the price-quality 

tradeoff is not an issue.) 

Because of the rising cost of health care and the fact 

that some people cannot afford to obtain care at all, we must 

ask whether there are less restrictive forms of regulation which 

will accomplish the state's objectives without unnecessarily 

stifling the growth of alternative forms of delivery and the 

use of alternative providers. 

2. Preemption 

Under the Supremacy Clause, 4 8 Congress is able to "preempt" 

or declare unenforceable any state law, as long as the federal 

action is within the boundaries of federal constitutional authority. 

47 See Parts I, II, and IV, supra . 

48 U.S. Constitution, Art. VI, cl. 2: "This Constitution 

and the laws of the United States which shall be made in 

pursuance thereof, ... , shall be the supreme law of 

the land •.• , anything in the Constitution or laws of 

any state to the contrary notwithstanding." 

For a full dis c ussion of the preemption issue, see Office 

of Policy Planning, Federal Trade Commission, Report of 

the State Regulation Task Force (March 14, 1978) [hereinafter cited as "Preemption Task Force Report"]. 

215 
Federal laws may preempt state regulations in two ways. First, 

the federal law may explicitly preempt an entire area covered 

by state law ,49 in which case the federal rules are viewed as 

having "occupied the field. 11 50 Second , a federal law may preempt 

state regulations only to the extent that the federal statute 

requires or authorizes conduct which is inconsistent with state 

law.51 This form of preemption is referred to as " conflict" 

or "inconsistency" preemption. 

Although Congress may explicitly grant preemptive authority , 

courts also may infer the preemptive grant. A statute's legislative history, the nature of the subject matter , or a finding 

that th e enforcement of the state law would hinder or conflict 

with Congressional policy have all been used to infer preemptive 

authority.52 Howeve r , an intent to preempt will not be inferred 

1 ig h tly. 53 

The Supreme Court held in Parker v. Brown that state laws 

which rise to the level of "state action'' are immune from antitrust 

49 See,~, Jones v. Rath Packing Co. , 430 U. S. 519 , 526-

33 (1977) . 

50 _See, ~' National Labor Relations Act, 29 U.S.C § 151 et 

~.; NLRB v . Jones & Laughlin Steel Corp., 301 U.S. 1 (1937) . 

51 See,~, Castle v . Hayes Freight Lines, Inc ., 348 U.S. 

61 (1954); Preemption Task Force Report, supra note 48, 

at 2 . 

52 Preemption Task Force Report, supra note 48 , at 2. 

53 Id. 

216 
scrutiny under the Sherman Act.5 4 As we noted in the introduction 

to this Staff Report, the question of whether a Magnuson-Moss 

trade regulation rule preempts inconsistent state laws, particularly 

those which rise to the level of "state action '' under the Parker 

doctrine has not yet been conclusively decided. It is our belief 

that section 18 rules do preempt inconsistent state activity. 

The legislative history of the Magnuson-Moss amendments, 

particularly the legislative history surrounding the expansion 

of FTC jurisdiction to matters "in or affecting " interstate 

commerce makes clear Congress' intent that the expansion of Commission jurisdiction in section 201 would not by itself operate 

to remove states from the field of consumer protection altogether. 55 

Translated into preemption terms, Congress did not intend for 

the Commission to occupy the entire field of consumer protection. 

The legislative history of the Magnuson-Moss Act , however, clearly 

sanctions ''conflict" preemption authority.56 

54 317 U.S. 34 1 (1943) . For a full discussion of the Parker 

Doctrine and its applicability to the FTC Act see Preemption 

Task Force Report , supra note 48, at 4-74. 

55 See S. Rep. No. 92-269, 92nd Cong., 1st Ses. 23 (1971) in 

which the Senate Commerce Committee reported that it was 

"[n]ot the Committee ' s intent in expanding the jurisdiction 

of the Commission" to make the FTC the sole consumer protection agency, and that "State and local consumer protection 

efforts are not to be supplanted by this expansion of jurisdiction." However, the Committee was equally clear that 

to the extent that there was an actual conflict between 

specific implementation of our Section 18 authority 

(through Section 201) and state activities, conflict preemption would be the inevitable result. Id. at 62 . 

56 Id. See full discussion in Preemption Task Force Report, 

supra note 48, at 52-64 . 

217 
We realize that the distinction between "conflict" preemption 

and "occupati on of the field"' pre emption is often difficult 

to define. In Eyeglasses I, the Commission preempted bans on 

advertising of eyeglasses and eye examinations. Is the "field " 

for preemption purposes the field of regulation of visio n care 

( in which case it is clear that the Commission has not occupied 

the fie ld) or the regulation of the advertising of visi on care 

(in which case there was a borderline occupation of the field)? 

If the Commission chooses to adopt a rule which preempts state 

laws and regulations affecting the form of practice in which 

optometrists, ophthalmologists and opticians may engage and 

redefining to some degree what functions each may perform, it 

may have crossed the line from "conflict" preemption to "occupation of the field" preemption. Ultimately this decision hinges 

on the narrowness or breadth of the "field" by which preemption 

is measured. If it is held that such a rule occupies the field, 

then a reviewing court may decide that the Commission does not 

have the preemptive authority to promulgate such a rule. This 

issue is one that the Commission must examine closely in this 

proceeding. 

The recent decisions of the Second Circuit in Katharine Gibbs 

v. PTc,57 and the o.c. Circuit in _American Optometric Association 

v. FTc,58 have not resolved these and other critical preemption 

57 612 F.2d 658 (2d Cir. 1979). 

58 CCH 1980-1 Trade Cas. ' 63,165 (D.C. Cir. 1980). 

218 
questions which must be faced in this proceeding. 

In Gibbs the Second Circuit struck section 438 . 9 of the 

Vocational School Rule, which made explicit the Commission's intent 

to preempt inconsistent state laws. In doing so the court held 

that FTC rules were preemptive -- but held that section 438.9 

of the rule (coupled with the the Commission's failure to define 

sufficiently the acts or practices violative of Section 5 in 

the rule) went beyond " conflict" preemption ana was thus invalia.59 

In the AOA decision, the D. C. Circuit left unresolved 

guestions such as: ( 1) are the states "persons" within the meaning of the FTC Act and as such subject to FTC jurisdiction? 

(2) does the "state action " doctrine of Parker v. Brown apply 

to the FTC Act? and (J) does the scope of the Commission •s 

delegated power permit it to preempt state laws to the extent 

of preempting the whole field of ophthalmic advertising?60 

The scope of the Commission ' s preemption authority thus remains 

open to question . We remain committed to the position that 

the Commision does have preemptive authority, that Parker does 

not apply to the FTC Act , and that the Eyeglasses I Rule did 

not constitute an occupation of the field. 

Assuming for the purposes of this discussion that the 

promulgation of a rule altering state form and scope of prac59 Katharine Gibbs v. FTC, 612 F.2d 658, 666-67 (2d Cir . 1979). 

60 American Optometric Association v . FTC, CCH 1980-1 Trade 

Cas. t 63,165 at 77,806 (D.C. Cir. 1980). 

219 
tice limitations would not exceed the Commission ' s authority , 

there remain consi derable remedial obstacles in Eyeglasses II. 

We will discuss the remedial issues associated with restrictions 

on the fitting of contact lenses by opticians and restrictions 

on employment of optometrists by non-professional corporations. 

3. The Fitting of Contact Lenses by Opticians 

The remedial issues confronting the Commission in its examination of state restrictions on the ability of opticians to 

fit contact lenses typify those raised by its entry into the 

"scope of practice" area. 

A hypothetical example is the best method of explaining 

the remedial dilemma which caused us not to recommend that the 

Commission propose a rule preempting such restrictions. Suppose 

that at the conclusion of the Eyeglasses II proceeding the evidence shows that some, but not all opticians, are qualified to 

fit contact lenses. Assume further that the evidence suggests 

that patients fitted by opticians pay substantially less than 

consumers who are fitted by ophthalmologists or optometrists , 

but receive a slightly lower average quality of care. Given 

this set of assumptions, the following remedial questions arise. 

If the evidence shows that opticians who have passed a 

currently-administered examination of clinical competency are 

qualified to fit contact lenses, but those who have not passed 

this test are not, can the Commission condition entry into this 

field on passage of this examination? How can the Commission 

ensure that as time and technology advance, this test will continue to be an adequate measure of competency? Moreover, would 

220 
the Commission want to take on the task of setting qualifications 

for entry into any professional field, monitoring performance 

of that group of entrants over t i me and revising entry standards 

when necessary? We assume the answer is unequivocally no. 

Alternatively, can the Commission simply override 

existing state restrictions and require that the states adopt 

more narrowly tailored requirements for licensure? In a line 

of cases involving the Environm~ntal Protection ~ency , a number 

of courts have struck down EPA rules which required the states 

either to adopt air quality standards of their own which met 

minimum federal standards, or to face the possibility of having 

to accept and enforce EPA-imposed standards.61 

In one of these cases, the Court of Appeals for the District 

61 See,~, District of Columbia v. Train , 521 F . 2d 971 

(D . C. Cir. 1975), vacated on other grounds, 431 U.S. 99 

(1977). In their decision, the D.C. Circuit stated: 

[W]e draw the line and hold that the Administrator, in the exercise of federal power 

based solely on the commerce clause, cannot against a state ' s wishes compel it to 

become involved in administering the details 

of the regulatory scheme promulgated by the 

[EPA]. 

In essence, the Administrator is here attempting to commandeer the regulatory powers of 

the states, along with their personnel and 

resources, for use in administering and enforcing a federal regulatory program.... We are aware of no decisions of the Supreme 

Court which hold that the federal government may validly exercise its commerce power by directing unconsenting states to regulate 

activities affecting interstate commerce, 

and we doubt that any exist. Id. at 992. 

221 
• • • 

---

of Columbia held that EPA's regulations represented an unallowable 

federal intrusion into state sovereignty. 

[T]he Tenth Amendment may prevent Congress from 

selecting methods of regulating which are "drastic" invasions of state sovereignty where less 

intrusive approaches are available.... [Tlhe 

~ere fact that direct federal regulation. 

would be less ''efficient" would not appear sufficient to override the serious intrusion on state 

sovereignty involved in forcing the states to supplant federal officials in policing the details 

of federal regulations. ••62 

The court noted that, if Congress had intended to adopt this 

novel scheme of empowering a federal agency to order unconsenting states to enact statutes and regulations, it would have 

made its intent clear.63 So, in consinering a preemptive remedy 

which hands the whole matter back to the states and orders them 

to adopt "better" require.nents, the Commission must take into 

account the limitations on federal power expressed in these cases. 

And in National Lea~ue of Cities, v. Usery , 64 the Supreme 

Court struck down provisions of the Fair Labor Standards Act 

which attempted to set minimum wage standards for state employees. 

The Court held that there was a limitation on the com~erce clause 

authority of the federal government where that exercise of authority 

would "directly displace the State's freedom to structure integral 

operations in areas of traditional governmental functions II 6 5 

62 Id. at 99 4. 

63 Id. at 984. 

64 426 U.S. 833 (1976). 

65 Id . at 852. 

222 
66 

The courts have not been willing to expand National League 

of Cities to cover areas which have traditionally been regulated 

by the states, but have limited its applicability to those situations in which federal action would impair the functioni ng and 

existence of the state as a state. 66 It is clear that preemption 

of form or scope of practice regulations would not impair the 

functioning of the state as a separate entity . 

4. Corporate Employment of Optometrists 

Some of the remedial concerns raised above apply with equal 

force to the form of practice issues under consideration in 

Eyeglasses II. Questions concerning the implications of National 

See,~~, Amersbach v. City of Cleveland, 598 F. 2d 1033 

TTth "CTr:"" 1979) in which the Sixth Circuit spelled out criteria for determining whether state activity was p r otected 

from federal intervention under the National League of 

Cities doctrine. The court stated: 

By analyzing the services and activities 

which the Court [in National League of Cities] 

characterized as typical of those performed 

by governments, we note certain elements 

common to each which serve to clarify and 

define a method by which a protected government function may be identified. Among these 

elements are (1) the government service or 

activity benefits the community as a whole 

and is available to the public at little 

or no expense; (2) the service or activity 

is undertaken for the purpose of public service rather than for pecuniary gain; (3) 

government is the principal provider of the 

service or activity; and (4) government is 

particularly suited to provide the service 

or perform the activity because of a communitywide need for the service or activity. 

Id. at 1037. 

Under this analysis, state control of professional conduct 

would not be protected under National League of Cities. 

223 
Lea9ue of Cities and other cases involving federalism stated 

above are essentially the same. 

But some of the issues are different. Again, a hypothetical 

example may be the best way to explain the remedial concerns 

at issue here. Assume that the Commission were to find that 

corporate employment resulted in lower consumer prices, greater 

consumption of vision care (attributable to the lower cost of 

care provided by commercial providers), and little or no diminishment in the quality of care delivered. The data also might 

show that in some situations lay employers had interfered in 

the judgment of the licensed professionals so that the patients ' 

welfare had been compromised. Should the states then retain 

the ability to enforce narrowly drawn requirements for the purpose 

of preventing interference in the doctor/ patient relationship 

by the commercial corporation? If so, what is to prevent the 

state from imposing overly broad restrictions which not only 

prevent corporate interference but also effectively make all 

corporate practice impossible? 

If the Commission prevents the states from acting, then the 

Commission must not only police the states to ensure compliance 

with the rule but also regulate the market to provide protection 

for consumers . But, if states are given the freedom to act, 

the Commission's attempt to permit commercial practice may be 

circumvented by state action. 

In Section 456.5 of the Eyeglasses I Rule, the Commission 

limited the ability of stateis 'to impose affirmative disclosure 

requirements on ophthalmic advertising because such disclosures 

224 
could have indirectly accomplished what the rule directly proscribed. Yet in the AOA decision, the D.C. Circuit at least 

intimated that it might not be willing to uphold a preemption 

of state laws that was founded in a prediction or speculation 

that the states might respond in bad faith to the Commission's 

rule.67 Therefore, it can be argued that the Commission is 

precluded from "fencing-in" a state or local governmental entity 

(unlike situations involving private litigants where the Commission's authority is firmly established). In Eyeglasses tr, 

the Commission must closely examine the threat to the rule and 

the alternative methods available to protect consumers. 

5. Is the Supreme Court's Decision i~ Friedman~- Rogers 

Bar to Commfssion_~~~~~ion of Trade Name Bans? 

a 

a. Introduction 

In Friedman v. Rogers,68 the Supreme Court held that a 

Texas statute which prohibited optometrists from practicing 

under a trade name did not violate the First Amendment.69 The 

67 American Optometric Association v. FTC, CCH 1980-1 Trade 

Cas. ,r 63,165 at 77,808 (D.C. Cir. Feb 6, 1980). 

68 440 U.S. 1 (1979). 

69 The original suit was brought in federal district court 

by Dr. Rogers, a "commercial optometrist" who was also a member of the Texas Board of Optometry. He challenged the 

constitutionality of several provisions of the Texas 

Optometry Act, one of which was the trade name ban. Specifically, he alleged that the ban denied him equal protection because it did not extend to ophthalmologists and 

was also a violation of the First Amendment r ight of commercial free speech. The district court found that the 

state's justification for the trade name ban was outweighed 

by the importance of commercial speech. Rogers v. Friedman, 

438 F. Supp. 428 (E.D. Texas 1977). 

225 
Court's decision, and the analysis which led it to that decision, 

draw into question the legal authority of the Commission to 

preempt state trade name bans if thos e bans are found to be 

unfair to consumers. 

In Friedman, the Court concluded that the state of Texas 

could find that a trade name ban was necessary to protect consumers from deception and, as such, the Texas trade name ban did not 

infringe on the First Amendment. 70 The trade name ban, Justice 

Powell wrote, 

ensures that information regarding optometrical services will be communicated more 

fully and accurately to consumers than it 

had been in the past when optometrists were 

allowed to convey the information through 

unstated and ambiguous associations with 

a trade name. 71 · 

Given the Court's holding t hat trade name bans serve a legitimate state interest, the question is whether the Commission 

can find such laws to be unfair. 

As we discussed above, the legal basis for the proposed 

Eyeglasses II Rule is a two-part unfairness test which balances 

the costs and benefits to consumers which flow from particular 

state regulations, and determines whether those regulations 

are contrary to public policy. The Supreme Court's decision 

is relevant to the Commission's unfairness analysis, not only 

because it suggests that there are significant benefits to con70 440 U.S. 1, 15 (1979). A discuss~on of the deception issue 

in Friedman is found on pp. 39-43, supra. 

71 Id. at 16. 

226 
sumers from trade name bans, but also because the Commission 

naturally looks to Supreme Court decisions as an expression 

of public policy. 

Nonetheless, we feel that the Friedman decision does 

not bar the Commission from determining that state laws banning 

the use of optometric trade names are unfair. Friedman was 

a First Amendment case; the evidence available to the Court 

and the balancing test used in First Amendment cases are significantly different from the evidence and balancing of interests used by the Commission in evaluating unfairness. These 

differences permit the Commission to reach a different conclusion than the Supreme Court reached in Friedman concerning the 

need for trade name bans to prevent consumer deception. 

The case of Spiegel , Inc. v. FTC, 72 has often been cited in 

support of the proposition that conduct which i s constitutionally 

permissible may nonetheless be unfair and therefore violate Section 

5 of the FTC Act. As we discuss below, we do not believe that 

Spiegel by itself is dispositive of the issues raised by the 

Friedman decision. The Spiegel case does lend support to our 

conclusion that the Cornm.ission may determine that trade name 

bans are unfair. 

b . The First Amendment Analysis in Friedman73 

72 540 F.2d 287 (7th Cir. 1976). 

73 Commentators who have analyzed the Court's opinion have 

also criticized its holding. See Birenbaum and Kamarck, 

Freedom of Commercial Speech Threatened by Friedman Decision, The N_a tional Law Journal at 20 (Apr. 23, 1979). 

227 
The majority opinion in Friedman began by stressing that 

the commercial speech at issue was significantly different74 from 

that considered in Virginia State Board of Pharmacy v . Virginia 

Citizens Consumers Council 75 and Bates v. State Bar of Arizona. 76 

Distinguishing the price information involved in those cases , 

the Court held that trade names are a form of commercial speech 

with "no intrinsic meaning. 11 77 A trade name , the Court concluded, does not convey information about the price and quality 

of services, but rather forms the basis for "ill-defined associations " in the minds of consumers. 78 

The Court clearly saw little threat to First Amendment 

interests from trade name bans. Justice Powell characterized 

74 Although the majority indicated that the speech was different 

in Friedman , the opinion failed to articulate the standard 

of deference due the commercial speech involved. As the 

dissenting opinion noted: 

Without engaging in any rigid categorization of the degree of scrutiny required, 

the Court has distinguished between permissible and impermissible forms of state regulation. Friedman v. Rogers, 440 U.S . 1 , 

20-21 (1979) (Blackman, J. dissenting). 

75 425 U.S. 748 (1976). 

76 438 U.S. 850 (1977). 

77 Friedman v. Rogers 440 U.S. 1, 12 (1979). The Court 

stated that in Bates and Virginia Pharmacy , the State 

had proscribed advertising by lawyers and pharmacists 

that contained statements about the prices of the products or services offered. Such statements were "selfcontained" and "self-explanatory" as opposed to the form 

of commercial speech found in Friedman. Id. 

78 Id . 

228 
the regulation as having honly the most incidental effect" on 

content and as merely prevent ing a decepti ve manner or presentation.79 The Court rejected the argument that the soluti on 

to the problem is to require disclosur e of ownership when a 

trade name is used, although Justice Blackmun stated in his 

dissenting opinion that 

[C]orrected falsehood , however, is truth , and, absent some other regulatory justification, a state may not prohibit the dis­ semination of truthful commercial informa­ tion. By disclosing his individual name 

along with his t rade name , the commercial 

optometrist acts i n the spiri t of our First 

Amendment jurisprudence, where traditionally 

" the remedy to be applied is more speech , not enforced silence. " (citation omitted] 80 

But the majority disagreed with Blackmun ' s assertion that trade 

names convey information and therefore saw no reason to use 

a "least restrictive alternative " approach to permit the use 

of trade names accompanied by affirmative disclosures. 

In analyzing the Court ' s opinion of the First Amendment 

interest in trade names, it is important to note Justice Powel l's 

statements regarding the use of the First Amendment clai ms to 

challenge economi c regulation by the states. In a lengthy footnote, Justice Powell emphasized that t he states do not lose 

their power to regulate commercial activity simply because 

speech is a componen t of the activity, stating that "we act 

with caution i n confronting First Amendment challenges to eco79 Id. 

80 Id. at 25. 

229 
nomic legislation that serves legitimate regulatory interests ."81 

Since the Court accorded little weight to the First Amendment interest in using optometric trade names, it did not closely 

scrutinize the state's rationale for restricting trade names. 

It accepted the argument that trade names are easily manipulated 

and offer significant possibilities for deception. 82 

81 Id. at 11, n. 9. 

82 The adequacy of the evidentiary base on which the Court 

made its findings of deception has been questioned. See 

Birenbaum and Kamarck, su~ note 73 at 20 - 21. This commentary on Friedman states that the Court "relied heavily 

on findings of deceptive practices made by the Texas Supreme 

Court in a case decided two years before enactment [of the 

trade name ban]." Id. 

The major evidence of deception which the Court had befo re 

it in Friedman was a deposition of Robert Shannon, O.D., an 

owner of an optometric chain in Texas prior to the adoption 

of the trade name ban. Dr. Shannon stated that, in most 

cases, a patient visitin9 a trade name practice did not 

in advance know the name of the optometrist who would be 

performing the examination and that the patient was not 

usually introduced to the optometris t at the time of the 

exam. As a result, the opponents of trade names asserted 

that personal responsibility deteriorated und er trade name 

practice and the optome trist employed in such a practice 

tended to become less concerned with the welfare of his 

or her patients. See Jur·isdictional Statement of Appe llant, 

Texas Optometric Association, Inc. at Appendix B, pp. 13-

17, Friedman v. Rogers, 440 U.S . 1 (1979). A second piece 

of evidence was taken from a 1967 Texas Supreme Court 

decision, Texas State Bd . of Examiners in Optometry v. 

~, 412 s.w. 2d 307, ~>peal dismissed and cert. denied,

Jlr9u.s. 52 (1967). In that case, the defendant Carp was 

found to have operated 71 optometric offices in Texas under 

at least 10 different trade names. Friedman v. Rogers, 

440 U.S. at 14. A deposition was introduced as evidence 

of false and misleading uses of optometric trade name s 

in Carp. The deponent was a former associate of Carp who 

described trade name abuses that had occurred in their 

business. Id. at 15, n .. 13. 

From the above evidence, the Court concluded there was evi­

(Footnote Cont inued) 

230 
Justice Powell, writing for the majority, used very strong 

language to emphasize what he perceived to be the possibility 

of deception, and more generally the evils associated with commercialization of optometry. 

The possibilities of deception are numerous. 

The trade name of an optometrical practice 

can remain unchanged despite changes in the 

staff of optometrists upon whose skill and 

care the public depends when it patronizes 

the practice. Thus, the public may be 

attracted by the trade name that reflects 

the reputation of an optometrist no longer 

associated with the practice. A trade name 

frees an optometrist from dependence on his 

personal reputation to attract clients, and 

even allows him to assume a new trade name 

if negligence or misconduct casts a shadow 

over the old one. By using different trade 

names at shops under his common ownership, 

aQ optometrist can give the public the 

false impression of competition among the 

shops. The use of a trade name also facilitates the advertising essential to largescale commercial practices with numerous 

branch offices, conduct the State rationally 

may wish to discourage while not prohibiting 

commercial optometrical practice altogether. 

The concerns of the Texas Legislature about 

the deceptive and misleading uses of optometrical trade names were not speculative or 

hypothetical but were based on experience 

in Texas with which the legislature was 

familiar when [it adopted the trade name 

ban.]83 [emphasis added] 

82 (Footnote Continued) 

dence of substantial harm to consumers from the use of optometric trade names. And in cases since Friedman, courts 

have referred to the ''substantial and well-demonstrated 

harm" from the use of trade names in Texas. See, e.g., 

In re Oldtowne Legal Clinic, 47 u.s.L.W. 276T(Md--:---Ct. 

App., June S, 1979). 

83 440 U.S. at 13. 

231 
-,--

Thus, the Court found little reason to extend First Amendment protect ion to trade names. The State of Texas was able 

to identify several possibilities for deceptive use of trade 

names and some cases in which deception had occurred . This 

was sufficient, in the major i ty ' s view, to override the insubstantial First Amendment claim. 

The dissent in Friedman recognized that the Texas trade 

name ban was being used t o discourage otherwise legal conduct. 

The dissenters argued that " the fact that in Texas the practice 

of commercial opt ometry is legal was of profound impertance" in measuring First Amendment rights and concluded that 

the Texas statute "by absolutely prohibiting, without reasonable 

justification, the dissemination of truthful information about 

wholly legal commercia l conduct" violated the First Arnendment. 84 

The Court ' s opinion failed to address the cost and quality 

considerations raised by the commercial practice of optometry.BS 

These issues, however , are essential for the Commission' s examination of unfa i rness under Section 5 of the FTC Act. 

c . Unfairness Analysis under Section 5 of the FTC Act. 

It is our recommendation that the Commission include trade 

name bans within the category of commercial restrictions to 

84 Id . at 20. 

85 To date , most of the evidence concerning the alleged "evils" 

of commercial practice is anecdotal. The Commission has 

attempted to gather empirical evidence on cost and quality 

in the Bureau of Economi cs study on commercial optometry. 

See Part I and Appendix A of this report. 

232 
be explored in Eyeglasses 11.86 Notwithstanding the Friedman 

decision, we believe it is appropriate for the Commission to 

proceed in this area. 

We do not believe that Friedman is a bar to Commission 

action because analysis of trade names using an unfairness theory 

is significantly different from a First Amendment ana l ysis . 

First, the Section 5 test factors into its equation issues 

other than deception. For example, in Par t l of this report, 

we detail the significant economic losses and decreased utilization of vision care services which accompany restrictions on 

commercial practice. At the same time , we discuss both the 

quality implications of commercial practi ce in "micro" terms (i . e. , 

deli vered quality) and "macro" terms (i.e. , aggregate demand or 

frequency of care.) These are factors not considered by the 

Court in Fr i edman, but factors which are critical to the Section 

5 balancing test . 

86 We have consistently taken the position that the issue 

of trade name bans was not settled by the Eyeglasses I 

Rule. At the time the Eyeglasses Rule was proposed, staff 

gave serious consideration to the question of whether trade 

name bans wou l d be preempted by the rule. Staff concluded 

that although trade names might convey certain useful info r ­ mation to the public, trade name bans were aimed more at 

regulating the conduct of optometrists. They were not, 

in staff's opinion, directed to the issue of whether an 

optometrist could advertise. 

The intent of the rule was to eliminate burdens on the dis­ semination of information and not to alter state regulations 

regarding permissible forms of business practice. Staff 

concluded that since trade name bans do not refer to whether 

one can advertise but rather to the form in which one can 

do business, they were not preempted by the rul e. 

233 
Second, the Commission must necessarily take a more intensive look at the evidence relating to deception than was possible 

in Friedman. The Court's opinion in Friedman is predicated 

on the finding that trade names foster deception. The Court 

itself noted that no evidence was before it concerning the possibility that the abuses identified in the record were attributable 

to some cause other than the use of the trade names. 

The plaintiffs argue that the fact that the 

public might be subject to similar deception 

by optometrists who do not use trade names 

but practice in partnerships or with numerous 

employees shows that the State actually was 

not concerned with misleading and deceptive 

practices when it enacted [the trade name 

ban.] The plaintiffs have not attempted to 

show, however, that any of the demonstrated 

abuses associated with the use of trade names 

also have occurred apart from their use. 8 7 

If the evidence produced during the course of a Commission 

rulemaking proceeding demonstrated that the abuses, if any, 

whiclh accompany the use of tra.de names also accompany traditional 

partnership or professional corporation practice, the causal 

connection between trade names and deception would be drawn 

into question. The Commission. would not be "second-guessing" 

the Court, but rather would b e reaching a different conclusion 

than the Court on the basis of a differ e nt and much more complet e 

evidentiary record. 

The choice facing the Commission unlike that which faced 

the Court, is not one of leaving trade name bans intact or 

Friedman v. Rogers, 440 U.S. 1, n. 14. 

234 

87 
preempting the states from this area entirely . Rather, the 

Commission ' s obligation is to determine whether consumers should 

be able to obtain the benefits of commercial practice (if the 

preliminary evidence ultimately bears up under scrutiny) , and 

at the same time preserve the states' ability to ensure "pro­

" 88 fessional responsibility and identification. The Commission 

can , we believe , make a determination as to whether professional 

identification can be achieved without sacrificing the benefits 

of commercial practice. Indeed, this is the course which the 

dissent endorsed. 89 

One final consideration concerns the portion of the test 

of unfairness which requires the Commission to ascertain public policy supporting its action. As we noted earlier, the 

discernment of public policy is at best a difficult task. The 

Supreme Court ' s decision in Friedman that the possibility of 

deception accompanying the use of trade names is sufficient 

to offset the First Amendment rights of commercial optometrists, 

particularly since it is so recent , poses a significant obstacle 

88 The purpose of the trade name ban, as stated by the Texas 

Legislature, was as follows: 

The provisions of this section are adopted 

in order to protect the public in the practice 

of optometry , better able members of the 

public to fix professional responsibility , and further safeguard the doctor- patient relationship. 

Id. at 14 , n. 12. 

89 Id. at 24-26. 

235 
.., 

to any determination that public policy supports elimination 

of trade name bans. We do have serious reservations about our 

ability to satisfy the elusive "public policy" standard of Section 

5 with respect to trade name practice in the face of a contrary 

Supreme Court decision. 

Our response to this difficulty is twofold. First, the 

availability of primary quality health care at an affordable 

cost, a factor not considered by the Court, is so fundamental 

a concern that we remain confident that this is a proper area 

for Comm1;ission inquiry. Second, the policy articulation of 

the Court in Friedman need not run contrary to the Commission's 

action. The Commission can eliminate total bans on the use 

of trade names, while at the same time permitting the states 

to impose less intrusive regulations to protect against the 

deceptive use of trade names. Such action would further national 

health care policies while accommodating the co·ur t's concerns. 

d. The Significance of Spiegel 

In Spiegel, Inc. v. FTc 90 the court held that the Commission 

has the authority to prohibit conduct that, although constitutionally permissible, is unfair to the public. Unlike Friedman, 

however, Spiegel does not contain a judicial analysis of the 

constitutional issue. In §.E_iegel, the court assumed that the 

conduct in question - Spiegel's use of the Illinois' long-arm 

statute to sue delinquent catalog customers residing in distant 

540 F.2d 287 (7th Cir . 1976). 

236 

90 
jurisdictions - did not violate constitutional standards of 

91 due process. In fact, the court observed that it could not 

make a general determination regarding the constitutionality 

of Spiegel ' s conduct because the evidence of sufficient contacts 

with a forum required to satisfy due process depends on the 

particular facts of each case.9 2 

Assuming arguendo that no due process rights were infringed 

by Spiegel ' s conduct, the court nevertheless upheld the Commission's cease and desist order on the ground that , according 

to the Supreme Court ' s decision in FTC v. Sperry & Hutchinson 

93 Co. , a practice may be banned under Section 5 although it is 

otherwise legally proper. 94 After assuming away the constitutional 

question, the court had no difficulty agreeing with the Commisson's 

conclusion that Spiegel's conduct was "patently offensive to 

clearly articulated public policies, intended to guarantee all 

citizens a meaningful opportunity to defend themselves in Court. 1195 

It is precisely because in Spiegel there was no explicit finding 

on the constitutional issue that the case does not resolve the 

questions raised concerning the impact of Friedman v. Rogers 

on Eyeglasses II. 

91 Id. at 291. 

92 Id. 

93 405 U.S. 233 (1972). 

94 540 F.2d at 292. 

95 Id. at 293. 

237 
Nevertheless, we do believe that Spiegel has significant 

implications for Commission action on trade names. By virtue 

of its assumption that Spiegel ' s use of the long-arm statute 

comported with due process , the court was in effect finding 

that Spiegel ' s conduct did not , in the words of the p r evailing 

legal standard , "offend traditional notions of fair play a nd 

substantial justice. 11 96 Yet , the court was still able to sustain 

a Commission finding of unfairness unde r Section 5. This is 

essentially what the Commission may do in Eyeglasses II: it may 

accept the Supreme Court ' s finding that trade name bans serve 

a legitimate state interest , and then apply the standard of 

unfairness embodied in Section 5 . 

Should the Commission follow our recommendation , we may 

be criticized for disregarding a clear directive of the Supreme 

Court. Both the fact that the Court employed a balancing test 

{and after doing so upheld bans on the use of trade names) and 

implicitly made a determination of public policy vis- ~-vis t he 

reach of the First Amendment make the Commission ' s choice a 

difficult one . However , we remain firm in our belief that the 

Commission may act to ensure ready access to affordable quality 

health care in this area . 

6 . Conclusion 

The issues we have raised above ought to be explored critically in the Eyeglases II rulemaking proceeding . We continue 

96 Id. at 291 . 

238 
to believe that the rulemaking process permits the most orderly 

inquiry into the legal, factual, and policy questions which the 

Commission must address before it can take final action of any 

form. Ultimately, the considerations noted above may preclude 

Commission adoption of a trade regulation rule. If so, the 

Commission may choose to make a public report and recommendations 

to Congress or the States under Section 6 of the FTC Act , or 

draft model legislation implementing the Commission 's findings, 

as was done in the generic drug investigation. 97 (We recommend 

such a course from the outset on the issue of contact lens fitting 

by optic ians.) 

The Commission , as well as individual Commissioners , have 

expressed concern that Staff Reports recommending the initiation 

of TRR proceedings have not sufficiently advised them of the 

potential pitfalls which might be encountered. We hope this 

section f ully advises the Commission of the political and legal 

issues raised by Eyeglasses II. We do not believe that the 

existence of these issues should deter the Commission from proposing a Magnuson-Moss TRR proceeding. 

We think the remedial limitations we have discussed above 

are a sufficient impediment to pursuing the i ssue of contact 

l ens f itting by opticians that we have not recommended inclusion of this issue in the recommended trade regulation rule 

a t this time ; rather, we recommend that contact l ens fitting 

97 Drug Product Selection, Staff Report to the Federal Trade 

Commission, Bureau of Consumer Protection, January 1979. 

239 
by opticians be severed from Eyeglasses II and that a model 

state law on that subject be developed. The commercial practice 

area involves traditional business practices as opposed to a 

determination of who is competent to practice. We believe the 

two issues to be qualitatively different. 

We do not mean to suggest that all so-called "scope of 

practice" restrictions should remain exempt from FTC scrutiny. 

In the area of duplication of lenses by opticians, we have not 

recommended a preemptive rule, but rather an extension of the 

prescription release requirement. This recommendation avoids 

preemption and other remedial difficulties, increases the quality 

of care available to consumers who wish to obtain replacement 

or duplicate eyeglasses which produce the visual correction 

present in their existing eyeglasses, and eliminates the current 

consumer injury attributable to those restrictions. 

240 
4 

VI. Proposed Modifications Of The Eyeglasses I Rule 

A. Introduction 

In earlier sections of this report, we discussed our recommendations for Commission action. In those discussions, however , we did not address directly the effect those actions might 

have on the Eyeglasses I Rule. Should the Commission ultimately 

adopt a final rule as the result of the recommended rulemaking 

proceeding, it might affect provisions of the now final Eyeglasses I Rule. For example, as we discussed in the sections 

on Duplication of Lenses1 and Contact Lens Fitting by Opticians, 2 

proposals under consideration at this time might substantially 

affect the scope of the prescription release requirement currently 

embodied in section 456.7 of the Eyeglasses I Rule (16 C.F.R. 

3 Part 456) . 

1 For a complete description of this remedy, how it may 

solve the problem of accumulation of tolerances and inaccuracy of duplication, and what new problems may result 

(such as expiration dates),TM Part II, supra. 

2 For a discussion of this remedy and its potential problems, 

see Part IV, supra. 

3 Section 456.7 states: 

In connection with the performance of eye examinations, 

it is an unfair act or practice for a refractionist 

to: 

(a) fail to give to the buyer a copy of the buyer's 

prescription immediately after the eye examination 

is completed. PROVIDED: A refractionist may refuse 

to give the buyer a copy of the buyer's prescription 

until the buyer has paid for the eye examination but 

only if that refractionist would have required immediate 

payment from that buyer had the examination revealed 

that no ophthalmic goods were required; 

(Footnote Continued) 

241 
3 

Given this situation, we believe that the Commission should 

propose the Eyeglasses II rulemaking proceeding as an amendment 

to the Eyeglasses I Rule. Logic dictates that any regulations 

promulgated as a result of this proceeding appear as part of 

an integrated section within the Code of Federal Regulations. 

Such a section would contain all Federal Trade Commission rules 

pertaining to the optical industry. We have drafted our rule 

recommendations based on the assumption that the new provisions 

will be integrated into the existing trade regulation rule. 

All advertising provisions of the original rule that were remanded 

by the o.c. Circuit have been deleted and the remaining provisions 

renumbered. The complete text of the proposal, with changes 

fr.om the original rule indicated, is presented in Part VII 

of this report. 

(Footnote Continued) 

(b) condition the availability of an eye examination 

to any person on a requirement that that person agree 

to purchase any ophthalmic goods from the refractionist; 

(c) charge the buyer any fee in addition to the refractionist's examination fee as a condition to releasing 

the prescription to the buyer. PROVIDED: A refractionist 

may charge an additional fee for verifying ophthalmic 

goods dispensed by another seller when the additional 

fee is imposed at the time verification is performed; 

or 

(d) place on the prescription, or require the buyer 

to sign, or deliver to the buyer a form or notice 

waiving or disclaiming the liability or responsibility 

of the refractionist for the accuracy of the eye examination or the accuracy of the ophthalmic goods and 

services dispensed by another seller . 
In addition, we believe that the Eyeglasses II rulemaking 

proceeding, if proposed by the Commission, offers the Commission 

the unique opportunity to consider revisions to the Eyeglasses 

I Rule which time and experience may have shown to be necessary 

to make that rule work more effectively. This re-examination 

of certain issues would ensure that the rule is not causing 

problems which were unforseen at the time the rule was promulgated. The Eyeglasses II proceeding could, and we believe should, 

be used to open the question of whether certain requirements 

contained in Eyeglasses I should be scheduled for ''sunset" termination. For example, the Eyeglasses II proceeding could be used 

to determine whether the prescription release requirement contained in section 456.7 should be phased out after the market 

has had an opportunity to respond to the requirements of the 

rule. 

In this section of the Staff Report, we will briefly discuss 

some of the modifications of the first rule that may be required 

as a result of either the Eyeglasses II proposal, or our reexamination of the effects of the Eyeglasses I Rule. 

B. Modifications Necessitated by Eyeglasses II 

One specific action recommended for inclusion in Eyeglasses 

II would necessitate an extension of the prescription release 

requirement of section 456 .7 of the Eyeglasses I Rule. In our 

discussion of state restrictions on the duplication of lenses 

by opticians we recommended a rule provision which would require 

that the consumer be given his or her prescription back after 

243 
r 

it is originally filled.4 This would enable the consumer to 

obtain subsequent pairs of eyeglasses from the original lens 

specifications, rather than relying on the duplication process 

to ascertain those prescriptive parameters. This action , if 

adopted , would in essence, extend the prescription release 

requirement of section 456.7 of the Eyeglasses I Rule to opti5 cians as well as to refractionists. New section 456.3(a) covers 

this situation. 

In our discussion of the sale of replacement contact lenses, 

we recommended that the proposed Eyeglasses II Rule include 

a requirement that the original fitter of contact lenses be 

required to release to the patient the complete contact lens 

6 specifications determined by that provider . Ultimate adoption of such a requirement would require new language to clarify 

the question of when the obligation of the refractionist to 

release the contact lens specifications has been trigger.ea. 

We have drafted a provision to cover this situation. It appears 

at section 456.3(b) of the proposed rule . 

Under the requirements of section 456.7 as currently written, questions have been raised as to whether an optometrist 

or ophthalmologist is required to specify on the prescription 

4 See Part II, supra, at 133-134. 

5 Seep. 133 , supra. 

6 See Part IV, supra, at 174 . 

244 
whether the patient is a suitable candidate for contact lenses. 7 

Currently, a number of states may require that a prescription state 

"OK for contact lenses'' before an optician can fit the patient 

with contact lenses. 8 We have interpreted the Eyeglasses I 

Rule as requiring that the refractionist include this information 

on t he prescription if state law requires an optician to have 

it before he may fit contact lenses and if the eye doctor has actually 

determined that the patient is a suitable contact lens candidate. 9 

However, some refractionists have expressed concern that including 

this statement on the prescription may expose them to liability 

7 See,~, Letter from Dr. Liebergall to Eyeglasses staff, (May ~~1979). 

8 See Cal. Bus., & Prof. Code§ 2542 (Deering ); Opinions of 

Die Attorney General and Report to the Governor of Virginia 

191 (1977) (Opinion Letter to Virginia State Board of Examiners 

in Optometry, March 17, 1977). 

9 See , ~ , FTC Eyeglasses Staff Response from R. Kinscheck 

to Dr. Liebergall (June 19, 1979). The basis of the 

staff' s position on this point is as follows. The rule 

requires refractionists to release prescriptions to patients 

immediately after an eye examination (section 456.7). 

Although the prescriptions need contain only those measurements which would be included in a prescription for 

eyeglasses (section 456.l(g)) and additional measurements 

are needed before the prescription can be used to obtain 

contact lenses, in some states opticians are permitted 

under state law to take these additional readings. Consequently, in such states, the prescription which the rule 

requires refractionists to release after the examination 

will be sufficient to allow the patient to obtain contact 

lenses from an optician and therefore, is, in effect, a 

contact lens prescription. The refractionist should not 

be abl~ to prevent patients from using this prescription 

to obtain contact lenses from an opti cian by writing "not for 

contact lenses" or by refusing to write "OK for contact 

lenses " simply because the refractionist does not want the 

patient to go elsewhere to purchase the contact lenses. 

245 
10 

if it is subsequently found that contact lenses were contraindicated.lo Because of this problem, and the potentially serious 

liability questions which arise from it, we recommend that the 

Commission clarify the rule to eliminate any requirement to 

place "OK for contacts" on the prescription. This ch~ge is conSee,~, Letter from Dr. Liebergall, supra note 7. The 

question of the refractionist's liability depends on the 

meaning of the authorization for contact lenses . If the 

"OK for contacts" provision means that a refractionist is 

certifying that this person is actually a suitable contact 

lens candidate, then the refractionist will be liable if 

he or she gives the authorization when a patient should 

not wear lenses. Section 456.7(d) of the Eyeglasses I 

Rule prohibits a refractionist from disclaiming liability 

for his services. Therefore, to avoid this liability problem, a refractionist will have to perform additional tests, 

which may even include fitting trial lenses, to assure that 

the patient is actually "OK for contacts." The additional 

tests also may be performed by the actual fitter, causing 

the consumer to pay twice for the same services. 

In addition, the refractionist may refuse to perform these 

tests if the patient wants to purchase contact lenses elsewhere, and thus could refuse to "OK" the prescription. 

Under the definition of eye examination in the Eyeglasses 

I Rule, (section 456.l(c) ), the refractionist would not 

be required to perform these tests. Therefore, substantial 

problems may exist for consumers in states where refractionists are held liable for their decision to "OK" patients 

for contacts. 

On the other hand, if the state requirement of contact 

lens authorization means that a refractionist has determined 

that a patient is "OK for contacts" based only on the tests 

that have been performed, then these problems would not 

arise . A refractionist would not be forced for his protection to perform additional tests to assure contact lens 

suitability. He could merely authorize the patient for 

lenses on the basis of those tests, usually a basic refraction, that he performed. The question of whether additional 

tests should be performed to assure that the patient is 

actually "OK for lenses" would be determined by the actual 

fitter and that fitter would assume liability for the decision, as well as for the actual fit. 

246 
sistent with our determination that the question of contact lens 

fitting should remain a matter of state law. Our rule proposal 

defines a prescription as those specifications necessary to 

obtain spectacle lenses. This would eliminate any requirement 

under the rule for a practitioner to place "OK for contacts " 

on the prescription. 

C. Other Modifications 

A second area of concern with the release of prescription 

provision deals with the release of prescription to patients 

who do not need a change in their prescription. On January 12, 

1979, the Commission issued an interpretation of the Eyeglasses 

I Rule which stated that a prescription must be released to 

a consumer if the patient needed eyewear but did not require 

a change in his or her current prescription , unless, in the 

judgment of the optometrist or ophthalmologist to do so would 

interfere in medical or optometric treatment or therapy.11 The 

purpose of this is to ensure that patients have their prescriptions in case they desire to change frames or in case they break 

a frame or lenses. However, some optometrists and ophthalmologists have stated that this is causing confusion and is resulting 

in unnecessary purchases of eyeglasses, especially among older 

patients.12 Accord i ng to these doctors , some patients do not 

11 Interpretation of Trade Regulation Rule, 44 Fed. Reg. 2569 

(Jan. 12, 1979). 

12 See Letter from ophthalmologist concerning release of prescription requirement , XVI-12, Eyeglasses I Rulemaking 

Record , Dkt. 215-52. 

247 
understand that there is no need to purchase new eyeglasses 

when there is no change in prescription even when this is stated 

to them. If they receive a prescription, it is argued, they 

use it to purchase eyeglasses, believing that new eyeglasses 

are necessary. We believe the Commission should consider this 

problem and seek comment on whether a ~edification of the rule 

is necessary to correct it. Accordingly, we recommend that the 

Commission direct a question to this issue in the Federal Register 

notice. 

The Commission's Eyeglasses I Rule requires that optometrists 

and ophthalmologists release prescriptions to their patients not 

only upon request, but in every instance. The Commission ' s 

reasoning for this requirement, which we recommended , was as 

follows: 

The major difficulty with adopting a provision which would require release only 

upon request is consumers ' lack of awareness that the purchase of eyeglasses need 

not be a unitary process ... [T]he right 

of the consumer to this prescription should 

be immunized from an evidentiary squabble 

over whether the consumer actually did or 

did not request the prescription.... In addition , there is no evidence in the 

record to suggest that any significant burden would attend the release of the prescription in every instance.13 

I n the two years that the rule has been in effect, there 

is reason to believe that the public has become considerably 

better informed about the availability of optical prescriptions. 

13 Advertising of Ophthalmic Goods and Services, Statement 

of Basis and Purpose , 16 C.F.R. Part 456, 43 Fed. Reg. 

23998 (June 2, 1978). 

248 
1 4 

Thus, we believe that the Commission should direct a question 

in the Federal Register notice as to whether the prescription 

release obligation should be reduced to providing the prescription upon request. 

In addition to the re-examination of the release of prescription requirement in these specific instances, we also 

recommend that the Commission raise the question of either 

terminating or reviewing the entire provision at a specified 

future date. If, in the lon9 run, the majority of consumers learn 

that they can shop for eyewear by obtaining a prescription, 

they may begin to patronize only those refractionists who are 

willing to release the prescriptions. Refractionists, in turn, 

will be wary of not releasin~J prescriptions because they may 

lose patients. In effect, the market may produce the same result 

as the present rule requiremE?nt. 14 Because of this possibility, 

we recommend that the Commission consider whether a "sunset" 

or other form of mandatory review of the provision should occur 

at some date. The issues that should be considered include 

whether any type of review is necessary, what form it should 

If all refractionists refused to release prescriptions, this 

market effect would not occur. The likelihood of this 

happening also must be considered in any review of the 

release of prescription provision. In addition, a small 

number of states have adopted similar release of prescription 

requirements. See,~~, Tenn. Code Ann. § 63-822(25)(n) (1979) 

(release upon request). If all states require the release 

and also enforce it, then the need for federal regulation 

may disappear . This issue also should be considered in the 

review. 

249 
take, and when it should take place.15 

The focus of the discussion to this point has been on the 

release of prescription requirements of section 456.7 of the 

Eyeglasses I Rule. Earlier versions of this staff report contained a discussion of whether the Commission should also reexamine the advertising disclosure section of the Eyeglasses 

I Rule, section 456.S(a). On February 6 , 1980, however, the 

United States Court of Appeals for the District of Columbia 

Circuit (in American Optometric Association v. FTC, No. 78 - 1461) 

remanded for further consideration the entire advertising portion of the Eyeglasses Rule, including section 456.S(a) dealing 

with advertising disclosures. Because the court has suspended 

operation of this portion of the rul e , modification of the Eyeglasses I Rule in this area is no longer at issue here. 

15 The merits of different forms of review must be considered 

very closely. Section 18(d) (2) (B) of the FTC Act, 15 U.S.C. 

57a(d)(2)(B), provides that a substantive amendment or repeal 

of any Magnuson-Moss rule shall be prescribed following 

the same procedures as are used in promulgating an initial 

rule. Thus, it is possible that the Commission would have 

to conduct a full-scale Magnuson-Moss proceeding to effectuate a "sunset" provision. Even if it were determined 

that "sunset'' could operate without following the MagnusonMoss procedures, a " sunset'' provision could still impose 

significant resource costs. If at the time of "sunset" 

it were found that the provision was still necessary, the 

Commission would be forced to inititate a new MagnusonMoss proceeding to re-promulgate the provision. A ''sunset" 

could thus require the Commission to conduct a rulemaking 

proceeding, with its extensive resource commitment, even 

if no change in the rule is necessary. Other forms of 

review would enable the Commission to study first the need 

for the change in the rule before committing to a fullscale rulemaking. These are issues that must be fully 

discussed in any consideration of a "sunset" provision. 

250 
Note: The final two sections of this report (Sections VII 

and VIII) contain possible rule language and a section-by-section 

analysis of the draft rule. As is true of the rest of this 

report, the Commission has not adopted these sections of the 

staff report. At this stage of the investigation, the Commission 

staff is recommending that an advance notice of proposed 

rulemaking ("ANPR") be issued by the Commission requesting 

comment on the recommendations contained in this report, on 

alternative courses of action which the Commission might pursue, 

and on the general issues raised in Eyeglasses II. 

In the past when initial staff reports were prepared, the 

Commission did not normally issue ANPR's in rulemaking but rather 

proceeded directly to formal rulemaking, with the issuance of an 

initial notice of rulemaking. The FTC Improvements Act of 1980 

now requires that an ANPR be published and that a public comment 

period follow before the initiation of formal rulemaking. The 

Act does not, however, require the preparation or release of 

draft rule language at the time of the issuance of an ANPR. 

Therefore, it is the Commission's discretion to include in this 

staff report draft rule language and a section-by-section 

analysis. The decision in this case should not be viewed as 

precedent for future Commission proceedings at the ANPR stage. 

The Eyeglasses II proceeding presents an unusual case in that the 

entire staff report (including these two sections) was written by 

the staff before passage of the 1980 Amendments.