FTC Staff Comment to the Honorable Harry R. Purkey Concerning Virginia H.B. 2518, H.B. 160, and S.B. 272 Relating to the Practice of Optometry

UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASIDNGTON, D. C. 20580
Offce of Policy P1annmg
Bureau of Economics
Bureau of Competition
March 9 , 2005
The Honorable Har R. Purkey
Commonwealth of Virginia House of Delegates
General Assembly Building
O. Box 406
Ricluond, VA23218
Re: Comment on Virginia House Bils 2518 and 160 and Virginia Senate Bil 272
Dear Delegate Purkey:
The staffs of the Federal Trade Commission s ("FTC" or "Commssion ) Office of
Policy Planing, Bureau of Economics, and Bureau of Competition are pleased to respond to
your invitation for comments on Virgina House Bills 2518 ("HB 2518") and 160 ("HB 160"
and Virgia Senate Bill 272 ("SB 272"), each of which would amend 9 54. 3205 of the Code
of Virginia, relating to the practice of optometr, ! CUIently, Virginia law prohibits an
optometrst tram working in, or as an employee or lessee of, a commercial establisluent, such
as an optical chain, deparment store, or a wholesale club. HB 2518 would ease CUIent
restrctions by elimiating the prohibitions on leasing tram and workig in a commercial
establisluent. HB 160 and SB 272 , which are identical, would amend the CUIent law to include
a prohibition on an optometrst working in any location that provides direct access to a
commercial establisluent.
Although HB 2518 would leave in place some of Virgia s CUIent restrctions on the
commercial practice of optometr, and a bill that provided for greater competition between
commercial and independent optometr practices would be preferable, we believe that HB 2518
Ths letter expresses the views of the Federal Trade Commssion s Offce of Policy Plang, Bureau
Economics, and Bureau of Competition. The letter does not necessarily represent the views of the Federal Trade
Commssion (Commssion) or of any individual Commssioner. The Commssion has, however, voted to authorie
us to submit these comments. We understad that HB 2518 has not been reported out of commttee, that HB 160
and SB 272 have been passed by both the Virgina House and the Virgia Senate.

is likely to benefit consumers by relaxing some of the restrictions that cause optical chains and
other retailers of optical goods to incur costs of doing business that independent eye care
practitioners ("ECPs ) do not. By contrast, enactment ofHB 160 or SB 272 is likely to cause
Virginia consumers to pay higher prices for eye examinations and optical goods without
providing any countervailing benefits in the form of higher quality eye care.
Interest and Experience of the FTC
Congress charged the FTC with enforcing laws prohibiting unfair methods of
competition and unfair or deceptive acts or practices in or affecting commerce .' Pursuant to this
statutory mandate, the Commssion encourages competition in the licensed professions
including optometr, to the maximum extent compatible with state and federal goals, The FTC
has over three decades of experience in the optical goods market and has issued regulations for
the industr, The FTC promulgated the Ophthalmic Practices Rules ("Eyeglass Rule ) in 1978,
The Commission also recently issued the Contact Lens Rule4 to implement the Fairness to
Contact Lens Consumers Act.' In addition to its regulatory role , the Commission has long
advocated policies for the optical goods industry that would benefit consumers and competition.
The FTC has provided comments to state agencies and legislatues regarding the effects of
restrctions on the sale of replacement contact lenses.' The FTC also has studied the effects of
state-imposed restrctions in the optical goods industry.7 In October 2002, the Commission held
a public workshop to evaluate possible anticompetitive barers to e-commerce 8 and in March
2004, the Commission staff issued a report analyzing potential barers to Internet commerce in
contact lenses.' This year, the FTC issued a report to Congress on competition in the contact
lens industr.
The Proposed Legislation
Federal Trade Commssion Act, 15 U. C. 45.
Advertising of Ophthalmc Goods and Services, Statement of Basis and Purose and Final Trade
Regulation Rule, 43 Fed. Reg, 23 992 (June 2 , 1978),
69 Fed. Reg. 40481 (July 2 2004) (to be codied at 16 C.F.R. Part 315).
15 U. C. 7601 et seg.
See Letter from Maureen K. Ohlausen et al. to Arkansas State Representative Doug Matayo (Oct. 4
2004) ("Matayo Letter
),
at htt://ww.ftc. gov/os/2004/1 0/041 008matavocomment.pdf; Letter from the Federal
Trade Commssion to Tennessee State Senator Ward Crutchfed (Apr. 29, 2003),
htt://www.ftc. govlbe/v030009.htm FTC Staff Comment Before the Connecticut Board of Examiers for Opticians
(Mar. 27 , 2002) ("Connecticut Board Comment
).
at htt://www.ftc. govlbe. v020007.htm
THE EFFECTS OF RESTRICTIONS ON ADVERTISING AND COMMERCIAL PRACTICE IN THE PROFESSIONS: THE
CASE OF OPTOMETRY, FTC Bureau of Economics Report (1980) ("FTC OPTOMETRY REpORT
67 Fed. Reg. 48 472 (2002).
POSSIBLE BARRERS TO E-COMMERCE: CONTACT LENSES: A REpORT FROM THE STAFF OF THE FEDERA
TRAE COMMISSION (Mar. 29 , 2004) ("CONTACT LENS REpORT
),
htt://ww.flc. eov/os/2004/03/040329clreportnal.pdf.
THE STRENGTH OF COMPETITON IN THE SALE OF PRESCRITION CONTACT LENSES: AN FTC STIY (Feb.
2005), at htt://ww.ftc. gov/reports/contactleos/050214contactlensmt. pdf.

CUIent Virginia law governing the practice of optometr prohibits an optometrist from
practicing "as a lessee of or in a commercial or mercantile establishment, or to advertise, either
in person or through any commercial or mercantile establisluent, that he is a licensed
practitioner and is practicing or wil practice optometr as a lessee of or in the commercial or
mercantile establisluent."l1 It fuher prohibits an optometrst ITom practicing "as an employee
either directly or indirectly, of a commercial or mercantile establishment "" and prohibits "
officer, employee, or agent of a commercial or mercantile establishment" from "directly or
indirectly supervis(ingJ" an optometrst. 13 HB 2518 , HB 160, and SB 272 each would alter this
section of the Virgiia code,
HB 2518. HB 2518 would amend 99 51.-3205 and 54, 3215 of the Virginia code by
eliinating the prohibition on an optometrst practicing " " or as "a lessee of' a "commercial or
mercantile establisluent."14 This bil would retain the CUIent code s prohibition on an
optometrist practicing as a direct or indirect employee of a "commercial or mercantile
establisluent."15 HB 2581 also would add a provision allowing the Virginia Board of
Optometry to take disciplinar action - including revocation or suspension of a license - against
an optometrist who fails to report any instance where it is suspected that "any officer, employee
or agent of a commercial or mercantile establisluent" is either supervising an optometrst or
controlling, dictating, or influencing" an optometrst's " professional judgment.""
HB 160/SB 272. HB 160 and SB 272 are identical provisions that would amend 9 54.1-
3205 by adding that an optometrst wil be considered "practicing in a commercial or mercantile
establisluent if he practices, whether directly or indirectly, as an officer, employee, lessee, or
agent of any person or entity in any location that provides direct access to or from a commercial
or mercantile establisluent."17 These bills furter state that "direct access" includes:
any entrance or exit, except an entrance or exit closed to the public, and used solely for
emergency egress pursuant to applicable state and local building and fire safety codes
that prohibits a person from exiting the building or strcture occupied by such practice or
establisluent (i) onto an exterior sidewalk or (ii) into a common area that is not under
the control of either the optometr practice or the commercial or mercantile
establisluent, such as into the common areas of an enclosed shopping mall.18
VA. CODE. ~ 54. 3205(A). The statue defres "commercial or mercantile establishment" as " a business
enterprise engaged in selling commodities." VA. CODE. ~ 54. 3205( c). Commercial and mercantile establishments
include both stores devoted entiely to selling optical goods and services (e.
g"
LensCrafters, Pearle Vision) as well
as general retailers that offer optical goods and services (e. Wal- art, Sam s Club, Target).
I.' VA. CODE ~ 54. 3205(B).
VA. CODE ~ 54, 3205.
HB 2518.
Jd.
SB 272 ~ D; HB 160 ~ D.
ld.

HB 160 and SB 272 would have the practical effect ofrequiring some commercial practices that
comply with current Virginia law to reconfgure their physical strctues to prevent consumers
from having any "direct access" to the area of their store that provides retail sales of ophthalmic
goods.
HB 160 and SB 272 would exempt from the definition of "commercial or mercantile
establisluent" (1) optometrc and ophthalmologic practices "which sell(J eyeglasses or contact
lenses ancillar to its practice; " and (2) "any entity that is engaged in the sale of eyeglasses or
contact lenses , the majority of beneficial ownership of which is owned by an ophthalmologic
practice and/or one or more ophthalmologists. "19 The practical effect of these exemptions would
be to allow private optometrsts and ophthalmologists to continue to sell contact lenses and eye
glasses in the same establisluent where they provide eye care services and to allow patients of
these practices exiting an examination room to continue to have direct access to the portion of
the practice devoted to commercial sales,
Competitive Effects ofthe Proposed Legislation
Competition is the hallmark of America s ftee market economy. As the Supreme Cour
has observed
, "
ultimately competition will produce not only lower prices, but also better goods
and services. "20 Indeed
(tJhe assumption that competition is the best method of allocating resources in
a free market recognzes that all elements of a bargain - quality, service
safety, and durability - and not just the immediate cost, are favorably affected
by the free opportty to select among alternative offers.
The Supreme Cour also has explicitly recognized that the benefits competition brings to
consumers of services provided by the "leared professions " such as optometry, are no different
from the benefits derived from competition in manufactung and service industres
By restricting the scope of collaborative aIangements between optometrsts and
commercial operations, curent Virginia law tends to hinder the ability of commercial optometrc
practices - such as optical chains, deparment stores, mass merchandisers, and wholesale clubs
that offer ophthalmic goods and services - to compete with independent practices, As a practical
matter, commercial optometrc practices comply with Virgia law by operating their
commercial businesses - which sell eye glasses and contact lenses - as independent entities
located adj acent to the offices of independent optometrists. The commercial operation and the
independent optometrst's office have separate consumer entrances. Thus , after receiving a
prescription from the independent optometrist, patients who wish to fill a prescription for eye
glasses or contact lenses at the commercial operation must exit the independent optometrist'
office and travel through a common area (e, a mall, sidewalk, or parking lot) to enter the
ld.
Nat l soc'y o/Pro/,I Eng 435 u. s. at 695 (citation omitted).
ld. at 695; accord FTC v. Superior Court Trial Lawyers Ass ' 493 U. S. 4lt , 423 (1990).
See Nat'l Soc'y o/Pro/,I Eng 435 U. S. at 689; Goldfarb v. Virginia State Bar 421 U. S. 773 , 787 (1975).

commercial operation. It is unikely that this business model represents the most effcient
integration of optometrc practice and commercial sales of ophthalmic goods or would exist
absent Virginia legal requirements.23 Indeed, FTC research has found that restrctions on
commercial optometry tend to make commercial optometric practice more difficult and therefore
to drve up prices,.'4
By strengtening the restrctions in CUIent Virginia law, both SB 272 and HB 160 are
likely to fuher impede the ability of commercial optometrc practices to compete against
independent optometrc practices, In paricular, the restrctions in these bills may have their
largest impact on national wholesale club chains that provide ophthalmic goods and services.
We understand that some ofthese commercial operations cUIently affliate with
ophthalmologists, who are not covered by Virginia s prohibitions on practicing "in" a
commercia) establisluent. These ophthalmologists operate within the store, employig a staff
oflicensed optometrsts. SB 272 and HB 160 would prohibit an optometrst from working in
this environment because such optometrists would be working in a "location" that has "direct
access" to a "commercial or mercantile establisluent"
In this maner, SB 272 and HB 160 would force stores operating under this business
model that wish to continue to offer ophthalmic goods and services to incur the cost of
reconfiguration so that the affiliated optometrsts no longer would have "direct access" to the
commercial operation. To the extent that the reconfiguration reduces these sellers ' efficiency in
deliverig ophthalmic goods and services , moreover, it will increase operating costs, which is
likely to cause consumers to pay higher prices for eye examinations and ophthalmic goods at
these stores, 25 A recent FTC study of competition in the contact lens industry found that in
Northern Virginia, wholesale clubs offered the lowest average prices for a selection of popular
contact lenses..'6 To the extent that SB 272 and HB 160 would raise entry or operating costs of
.'3 Several studies have found that commercial practice restrctions, includig those on a commercial practice
employig an optometrst and locatig offices in mercantile locations, raise the price of eye glasses, contact lenses
and examiations. See, e. Deborah Haas-Wilson The Effect of Commercial Practice Restrictions: The Case of
Optometr, 29 J.L. & ECON. 165 (1986); Deborah Haas-Wilson Tying Requirements in Markets with Many Sellers:
The Contact Lens Industr, 69 REv. ECON. & STATISTICS 170 (1987). Restrctions on commercial practice are likely
to have a stronger negative impact on chain commercial practices th on independent commrcial practices. Chain
operate by creatig a generalied business model that aim to reduce both operatig costs and the costs to consumers
of fiding and purchasing ophthalmc goods and services. Chain commercial practices succeed in the marketplace
when they offer some combination of prices and quality tht consumers prefer. Accordingly, curent Virgina law
likely reduces competition from commercial optometr chain by imairg the creation of unorm chain-wide
business practices.
.'4 See FTC OPTOMETRY REpORT; Bureaus of Consumer Protection and Economics, Federal Trade
Commssion A Comparative Analysis of Cosmetic Lens Fitting by Ophthalmologists, Optometrists, and Opticians
(1983). See Ophthalmc Practice Rules ("Eyeglasses IT" ), Statement of Basis and Purose, 54 Fed, Reg. 10285
10286 (Mar. 13 , 1989) (" Commssion Statement"
) ("
prices for eye care are 18 percent higher in markets where chain
fInns are totally restricted than in markets where chain fIrms operate freely ). Changing market circumtances could
mae the size of the price effect today smaller than 18 percent. Neverteless, we have identifIed no change in the
marketplace that economic analysis suggests would likely reverse or eliate the price effect if a new study were
conducted with more recent data.
See notes 23 & 24 supra.
.'6 The study found that, controlling for lens-specifIc effects , wholesale clubs sampled offered prices that were
$26.36 lower than independent eye care practitioners for spherical lenses , and $34.42 cheaper than independent eye
care practitioners for toric and multifocallenses. See THE STREGTH OF COMPETITION IN THE SALE OF

these wholesale clubs, these bils would likely cause consumers to pay higher prices for optical
goods at these clubs and reduce competition in the marketplace. Requirng affected commercial
establisluents to reconfigue their premises also is likely to impose costs on consumers who
after an eye examination, prefer to avoid the inconvenience of entering a separate store to
purchase optical goods.
By easing some of the CUIent restrictions on commercial operations, HB 2518 would
likely enhance competition from commercial optometric practices. By permitting optometrsts
to practice in commercial establisluents as lessees, HB 2518 likely would allow for cost-
reducing collaborative business models. The benefits of such cost reductions are likely to inure
to consumers in the formoflower prices for optical goods and services, Additionally, some
consumers will enjoy the convenience of receiving eye care servces and purchasing optical
goods at the same store, Although HB 2518 is likely to benefit consumers in these ways, a bil
that also eliminated the prohibition on a commercial operation employing an optometrist likely
would improve consumer welfare to an even greater degree.
Empirical Evidence on the Effect of Commercial Restrictions
on Price and Quality
Regulations that limit forms of competition may be useful when they address specific
market failures that have been shown to har consumers. Thus , in principle, a regulation could
create net benefits for consumers if it were to result in an increase in the quality of eye care and
if consumers were willing to pay more for that increase in quality than they actually would pay
in higher prices. Through research and rulemakngs,-7 the FTC itself has evaluated many
PRESCRITION CONTACT LENSES: AN FTC STUDY (Feb. 2005),
htt://ww.ftc. govlreports/contactlens/O 50214contactlensmt. pdf.
The Commssion addressed issues relatig to the commercial practice of optometr in the course of
promulgatig the Ophthalmc Practice Rules, commonly known as " Eyeglasses II. " Ao earlier ruemag -
Eyeglasses I" - considered two relatively narrow tyes of competitive restrctions but also revealed the existence of
other restraints on eye care providers that appeared to limt competition unduly, increase prices and reduce the
quality of eye care provided to the public. See Advertsing of Ophthalmc Goods and Services, Statement of Basis
and Purose , 43 Fed. Reg, 23992 (June 2 , 1978) (promulgating 16 CFR Part 456) ("Eyeglasses I" ). The Eyeglasses I
Rule prohibited bans on nondeceptive advertsing and required vision care providers to fush copies of
prescriptions to consumers after eye examations. On appeal, the rule s prescription release requiement was upheld
but the advertsing portons were remanded for fuer consideration in light of the Supreme Cour decision in Bates
v. State Bar of Arona, 433 U.S. 350 (1977) (fmding state supreme cour rules against attorney advertsing violated
the First Amendment). American Optometric Assn. v. FTC 626 F. 2d 896 (D. C. Cir, 1980). The FTC has contiued
to address advertsing restrctions though admnistrative litigation. See, e. , Mass. Ed. of Registration in
Optometr, 110 F. C, 549 (1988).
Eyeglasses II considered many of the same issues presented by the Virgina Bils , including such topics as whether
the lay business parers of optometrsts could properly be involved in " settg of fees , salaries, or mium office
hours; location of the practice; choice of suppliers of material, equipment, services, and laboratory work;
. . .
and
other activities that involve business judgments to. a simlar degree. " The Commssion found that " (tJhe record.
. .
demonstrates that lay con1rol over the business aspects of an optometrc practice is an integral element of
commercial practice. See Commssion Statement at I 0300. The Eyeg)asses II Rule - put into effect in 1989 - was
jntended to limt the abilty of states and state optometrc boards to restrct the commercial aspects of optometrc
practice. The D. C. Circuit strck down the Rule on the grounds that the FTC Act did not give ths agency sucb
authority over the states. See California Ed. oJOptometr v. FTC 910 F. 2d 976 (D. C. Cir. 1990), Because the cour

restrctions on commercial optometrc practice, and our findings indicate that many such
restrctions tend to increase costs while producing no offsetting consumer benefit, thus resulting
in a net loss for consumers,
Two major studies by FTC staff examined many of the same issues presented in SB 272
HB 160, and HB 2518, These studies, plus several others conducted by independent researchers
using the FTC staff's data, are the most recent empirical investigations of the impact on
consumers from commercial optometr restrictions.
The first study, published in 1980 by the FTC' s Bureau of Economics, compared the price
and quality of optometrc goods and services in markets where commercial practices were
subject to differing degrees ofregulation..'8 This study was conducted with the help of two
colleges of optometr and the Director of Optometric Services of the Veterans Administration.
It compared four dimensions of quality in markets with chain firms and markets without chain
firms: (I) the thoroughess of the eye examination; (2) the accuracy of the prescription; (3) the
accuracy and workmanship of the eyeglasses; and (4) the extent of unnecessar prescribing, The
study found that optometrc practice restrctions in a market resulted in higher prices for
eyeglasses and eye examinations but did not improve the overall quality of care in that market
as measured by these four attrbutes, Later analyses of the FTC data by academic researchers
came to similar conclusions. The second study, published in 1983 by the FTC Bureaus of
Consumer Protection and Economics, compared the price and quality of the cosmetic contact
lens fitting services of commercial optometrsts and other provider groupS.30 It concluded that
on average, commercial optometrsts fitted cosmetic contact lenses at least as well as other
fitters, but charged signficantly lower prices.
Thus, a key finding that emerges from these studies is that there is no evidence that
restrctions on the commercial aspects of optometrc practice raise the quality of services for
those people who do obtain these services. Furher, our research indicates that these
vacated the Rule solely on jursdictional grounds, the cour' s decision should not be read as a rejection of the factual
underpings of the FTC effort.
.'8 See FTC OPTOMETRY REORT.
John Kwoka Advertising and the Price and Quality of Optometric Services 74 AM. ECON, REv, 211
(1984); Haas-Wilson The Effect of Commercial Practice Restrictions, supra note 23. Both of these studies
examied differences in quality across makets with varng degrees of commercial restrctions. Philip Parker offers
a somewhat contrary view. See Philip Parker Sweet Lemons: " Ilusory Quality, SelfDeceivers, Advertising, and
Price 32 J, MATING REs. 291 (1995). Using the same FTC dataset, he questioned the robustness of the previous
research' s price results, fmding that some alternative formulations failed to fmd a significant price effect due to
differences in commercial restrctiveness. Parker did not, however, directly dispute the key quality fiding of the
FTC report - that restrctions on commercial optometrc practice did not inuence average quality levels for eye
exams.
Bureaus of Consumer Protection and Economics, Federal Trade Commssion A Comparative Analysis of
Cosmetic Lens Fittng by Ophthalmologists, Optometrists, and Opticians (1983).
In fact, studies of professional services have often found little relationship between professionals ' business
practices and the quality of service they provide. See C. Cox and S. Foster, THE COSTS AND BENEFITS OF
OCCUPATIONAL REGULATION, FTC Bureau of Economics Staff Report (October 1990).

restrctions affmnatively har a group of citizens: because the restrctions lead to higher prices
many price-sensitive consumers deferred seeking eye care,
On the basis of these studies and other evidence assembled in the Eyeglasses
rulemaking proceeding,33 the FTC concluded that unnecessar restrctions on commercial
practices by eye care providers result in signficant consumer injur, in the form of monetar
losses and less frequent vision care, without providing consumer benefit. The Commission
found that "the record is quite clear on this central issue: There is no difference in the average
quality of care available to consumers in restrctive and nomestrctive markets. "35 The
Commission also found that ofthe more than $8 billon consumers spent on eye exams and
eyewear in 1983 , a substantial portion was attbutable to inefficiencies resulting from state
regulation that reduced competition36 The evidence from the FTC's rulemaking record thus
provides a strong arguent for avoiding unecessar restraints on the commercial practice of
optometry.
The rulemakng studies took place over 20 years ago, and some aspects of the
marketplace have undoubtedly altered over time, For example, the changing patterns of
insurance coverage may alter the price effects of practice restrctions; advertising is more
widespread;37 and chain stores and mass merchant sellers of ophthalmic goods have become
more common. Nevertheless, no subsequent persuasive empirical evidence alters the
rulemakng s most important conclusion - restrictions on commercial practice do not lead to
higher quality eye care. Thus, HB 160 and SB 272 are unlikely to provide consumers with any
benefits, and HB 2518 is unlikely to cause any harm to consumers.
Finally, we note that if the goal ofboth SB 272 and HB 160 is to prevent commercial
entities from interferig with an optometrist's personal judgment in ways that would reduce the
quality of eye care, these bils appear superfluous because Virginia law already expressly
prohibits such influence,38 Furher, if the Virginia Legislatue believes that physical separation.
3.' See Commssion Statement supra , at 10290 (a snrey of 10 000 people "found that signficantly fewer
individuals purchased eyeglasses in a given year in states with higher prices than in states with lower prices ); id.
(testiony by the AOA suggests that " 85 percent of all serious injures sustained by persons 65 and older are caused
by falls; 25 percent of these relate directly to uncorrected vision problems
In the course of the Eyeglasses II ruemakig, the FTC received 287 comments and heard testiony from
94 witnesses. The commenters and witnesses included consumers and consumer groups, optometrsts, sellers of
ophthalmc goods, professional associations , federal, state and local goverment offcials, and members of the
acadenrc communty. See Commssion Statement supra , at 10287.
Commssion Statement supra note 24 , at 10285.
Id. at 10290-91.
Id. at 10285-86.
See, e. James H. Love & Frank H. Stephen Advertising, Price and Quality in SelfRegulating
Professions: A Survey, 3 INTL. J. ECON. Bus. 227 (1996). This 1996 snrey of empircal economics literatue on
professional advertsing revealed that most studies fmd advertsing tends to reduce the price of professional services
without reducing quality. On price , the authors concluded
, "
the overwhelmg impression ITom the results
reviewed.. .is of advertsing having a downward effect on professional fees. " On quality, they concluded that the
empircal literatue generally shows that advertsing does not lead to lower quality.
Furer See VA. CODE 54. 3205.

between the eye examination area and the area where ophthalmc goods are sold is needed to
prevent consumer harm, it is unclear why this prohibition would apply only to commercial
entities, but not to independent optometrc practices that sell ophthalmic goods.
Conclusion
Current Virgia law places signficant restrctions on the commercial practice of
optometr. Although retaining some of the curent law s impediments to competition, HB 2518
would at least ease some of the restrctions on commercial optometric practice. HB 2518 is
likely to benefit consumers with lower prices and is unlikely to reduce the quality of eye care,
By contrast, HB 160 and SB 272 would place further restrictions on the commercial
practice of optometr, These new restrctions, moreover, may fall disproportionally on national
wholesale club chains, which are low-cost sellers of optical goods. Economic analysis and the
most recent empirical evidence suggest that restrictions on commercial optometrc practices tend
to increase prices but provide no improvement in the quality of eye care. Thus, HB 160 and SB
272 are likely to cause Virginia consumers to pay higher prices for eye examinations and optical
. goods without providing any countervailing benefits in the form of higher quality eye care.

Respectfully submitted
t()Maureen K. Ohlhausen, Acting Director
Office of Policy Planng
u rLuke M. Froeb , Director
Bureau of Economics
Susan A. Creighton, DIrector
Bureau of Competition