Mergers and Consolidations of Optometry Colleges and Schools

Introduction

Mergers of Optometry Colleges and Schools were originally proposed in 1990 by the eminent educator, Professor Thomas Lewis. Given declining enrollments in Higher Education, his three decades old proposal in now being re-considered with a sense of considerable urgency. The following Discussion Outline is posted to assist optometric leadership in deliberations concerning mergers/consolidations of optometry colleges and schools.

Discussion Outline

Current State of Higher Education/Optometric Education

• Higher Education is in crisis with institutions closing and mergers/consolidations proactively pursued because of declining enrollments.
• 2.9 million fewer undergraduate age students than in 2008. Projected to continue until 2030.
• There is too much student capacity in optometric education, and not enough demand. Six new schools founded since 2008.
• Applicants to optometry colleges and schools have essentially not increased in a decade.
• Repayment of debt is 14.9% of income, highest of all professions and twice medicine.
• Colleges of Optometry are now unable to fill entering classes with qualified students. GPA, OAT and NBEO data indicate some Optometry Schools are admitting less qualified students.
• Independent Optometry Colleges are dependent on tuition revenue to support operations, and decreasing enrollments threaten their survival.
• Financial reserves and selling of assets can only sustain College operations for a relatively short period of time.
• The signs of a pending crisis in enrollments have been present for years, however, only recently viewed with a sense of urgency.

Options to Survive/Thrive in Crisis

1. Student marketing may increase applicants, however effective advertising requires substantial funding (3-5% of projected revenue) which is not realistic without external support.
2. Affiliation with a university for Independent Optometry Colleges is not likely as the current enrollment decline would not be acceptable to university officials.
3. Although university-based schools of optometry will likely be supported in the short term by university officials, long term enrollment declines will be problematic.
4. Continue as currently operating and allow market forces to determine the fate of the College or School.
5. Merge/Consolidate with another Optometry College or School

Benefits of Mergers and Consolidation

1. Increased enrollment which is large enough to sustain operations as a merged/consolidated College.
2. Brings unique strengths of two Colleges/Schools together.
3. Leveraging of a greater size and scale.
4. Financial savings in long term.
5. Renewed commitment of the governing board.
6. Re-engaging and re-energizing institutional stakeholders.

Costs of Mergers and Consolidation

1. The process of merging is painful.
2. Ideally, mergers should not be considered in time of crisis, but rather as part of a larger strategic plan.
3. Discordance in timing between gains and costs. Financial gains take time to develop while costs of merger come due immediately.
4. Costs include: building refurbishments, transition costs, addressing human capital needs, communications, branding, college relations, expenditure of political capital, slowing of programmatic growth, disruption to leadership and merger/consolidation consultants.