Rising Costs in Healthcare: What Optometry Practices Must Watch in 2025

The rising cost of doing business in healthcare is nothing new—but recent developments have added fuel to an already burning fire.

On April 8th, a 104% tariff on Chinese imports was announced, with more tariffs on pharmaceuticals expected to follow. Combine that with inflation concerns, labor shortages, and the increasing complexity of insurance reimbursement, and it’s no wonder that healthcare leaders—from hospitals to outpatient clinics—are reevaluating how they operate.

While headlines may focus on large system hospital mergers, these economic ripple effects are hitting small and mid-sized clinics just as hard—especially those in optometry, physical therapy, and dental care. 

Inflation Isn’t Just a Hospital Problem

Outpatient clinics often operate with leaner budgets and smaller teams. That means every price hike in medical supplies, optical inventory, or software subscriptions has an outsized impact. When vendor costs rise, the increase often falls on the providers, not the payer—and definitely not the patient.

Here’s where inflation is showing up in outpatient settings:

• Optical products: Lenses, frames, and other specialty coatings are imported items, often from tariff-affected regions.
• Medical equipment: From autorefractors to visual field machines, replacement parts, and devices now carry higher costs.
• Pharmaceuticals: Eye drops and specialty medications used in-office have already seen double-digit cost increases year-over-year.
• Back-office software and support: Billing platforms, EHR systems, and support vendors are raising prices to offset their own operational costs.

The Denial Dilemma: Revenue Hits from the Other Side

It’s not just expenses rising. Revenue recovery is getting harder, too.

Health systems are reporting increased denials and downgrades from insurance companies—something outpatient clinics are feeling as well. Smaller practices often don’t have entire teams dedicated to appeals or contract negotiations. A denied claim or underpayment hits the bottom line directly, with limited time and resources to recover revenue.

These trends aren’t anecdotal; they’re structural:

• Payer scrutiny has increased: Claims are more frequently rejected for administrative errors, lack of documentation, or vague coding.
• Reimbursement rates are flat: Insurance contracts aren’t adjusting fast enough to match inflation.
• Appeals are delayed: Fewer staff and more automation on the payer side mean long wait times for responses.

This creates a dangerous gap between rising operational costs and stagnant or shrinking income.

What Can Smaller Practices Do?

While hospitals may respond to inflation by postponing mergers or cutting entire departments, outpatient clinics need more agile strategies to stay stable.

Some immediate steps to consider:

1. Audit Your Billing Processes

Manual workflows lead to preventable errors—and preventable denials. Identifying patterns in denied claims or slow payments can uncover gaps in documentation, coding, or follow-up procedures.

2. Train (or Retrain) Your Team

When front office staff or techs are stretched thin, mistakes slip through. Invest time in training around proper documentation, benefit verification, and real-time eligibility checks.

3. Optimize for What You Can Control

You can’t control inflation or tariff policy—but you can control how efficient your workflows are, how accurately you submit claims, and how quickly you follow up on rejections.

Future-Proofing Requires Proactive Operations

In uncertain times, the practices that thrive will be those that tighten their systems, reduce revenue leakage, and keep a close eye on both costs and collections. Inflation may be out of your hands—but your response doesn’t have to be.

Now’s the time to treat operational efficiency like a clinical necessity.