FTC Staff Comment Before the Virginia State Board of Optometry Concerning Proposed Optometry Regulations

L'ITEU ST ... TE.~ 01 ... \lERI( ...
FEDERAL TRADE CO\1\lISS10'\
~...:l=O£ A"; :),.
:a""s\,.iV£ ~ PR~:),~·f CTtOt.
.ll.pr-:d 	15, 	19SE
Mrs. 	Moire. 	Lux
Executive 	Director
vir3inia 	State 	Boarj 	of 	Optometry
517 	West 	Grace 	Street
P.O. 	Box 	27708
Richmond, 	VA 	23261
Deer 	Mrs. 	Lux:
The 	Federal 	T~ade Commission's 	Bu~eaus of 	C~nsumer
Protection, 	Economlcs, 	anj 	Competition- 	are 	pleased 	to 	submit
this 	letter 	in 	response, 	to 	your 	request 	for 	public 	comments 	on
re g ulation9 	proposed 	for 	adoption 	by 	the 	Virginia 	State 	Board 	of
Optometry.
As 	you 	are 	?ware, 	we 	submitted 	comments 	in 	1984 	to 	Richard
Morrison, 	Re9Ulatory 	Review 	Coordinator, 	and 	in 	1985 	to 	Ralph
Axselle, 	Chairman 	of 	the 	Governor's 	Regulatory 	Reform 	Advisory
Board, 	concerning 	laws 	and 	regulaJions 	governing 	a 	number 	of
professions, 	including 	optometry. 	Because 	the 	laws 	concerning
optometry 	and 	the 	proposed 	regulations 	of 	the 	Board 	of 	Optometry
contain 	the 	same 	provisions 	that 	we 	commented 	on 	in 	our 	earlier
let~ers, 	we 	resubmit 	those 	comments 	in 	their 	entirety 	and 	only
briefly 	mention 	herein 	those 	~rovisions we 	continue 	to 	believe
should 	be 	modified. 	We 	are 	pieesed 	to 	note 	that 	since 	we 	lest
submittej 	comments, 	the 	Governor's 	Reguletory 	Reform 	Advisory
1 	These 	com~ents 	represent 	the 	views 	of 	the 	Bureaus 	of 	Consumer
Protec~ion, Economics, 	and 	Com~etition of 	the 	:ederal 	Trade
Commission 	and 	do 	not 	necessarilv 	represent 	the 	views 	of 	the
Commission 	or 	any 	individual 	Co~~issioner. 	The 	Commission,
however, 	has 	authorized 	the 	subrr.ission 	of 	these 	comments.
2 	Our 	comments 	are 	directed 	o~ly 	to 	those 	provisions 	thet 	deal
with 	advertising, 	trade 	names, 	commercial 	practices, 	or 	prepaid
optometric 	plans. 	We 	offer 	no 	opinion 	on 	the 	legality 	or
cesirability 	of 	other 	portions 	of 	tne 	proposed 	re9ulations.
3 	Letter 	to 	Richerd 	Morriso~ from 	Carol 	T. 	Cr3~ford, Direc~or,
Bureau 	of 	Consume= 	Pro~ec~ion, S~ptember 14, 	1954 	(hereinafter
referred 	to 	as 	"Morriso~ letter"), 	and 	le::er 	to 	Relph 	Axselle
from 	Carol 	T. 	Crawford, 	Director, 	Bureau 	of 	Cons~mer Protection,
May 	22, 	1985 	(hereinaf~er referred 	to 	e5 	"Axselle 	le~ter").
Copies 	of 	both 	le~ters are 	attached.

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I Mr s. 	Mo ira 	Lu x 	-2-
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Board 	and 	the 	Task 	Force 	on 	Regulatory 	Review 	of 	the 	Virginia
Commission 	of 	Heal:h 	Regula:ory 	Boards 	have 	issued 	reports
supporting 	many 	of 	the 	posltions 	advan~ed in 	our 	comments. 4
We 	a~?laud 	the 	Board's 	efforts 	to 	reorganize 	and 	simplify
its 	rules 	concerning 	advertisin;. 	We 	are 	also 	encouraged 	by 	the
Board's 	de~ision to 	allow 	limited 	use 	of 	trade 	names. 	We 	do,
however, 	have 	some 	concerns 	with 	proposed 	changes 	in 	these
areas. 	Perhaps 	more 	importantly, 	the 	statutory 	restraints 	on
advertising, 	use 	of 	trade 	names, 	commercial 	practice, 	and 	prepaid
optometric 	plans 	that 	we 	discussed 	in 	the 	att3ched 	comments
remain 	in 	effect. 	Without 	Board 	support 	for 	changes 	in 	these
statutes, 	the 	stated 	goal 	of 	identifying 	and 	removing 	"both
statutory 	and 	regulatory 	policies 	that 	impede 	competition,
increase 	cost, 	or 	otherwise 	h3r~ 	consumers 	without 	providing
countervailing 	benefits 	in 	public 	protection"~ will 	not 	be
achieved.
Advertisin~ Re~ulations
We 	support 	the 	Board's 	de:ision 	to 	elimina:e 	regulations
that 	imposed 	unnecessary 	disclosure 	requiremen:s 	and 	limited 	the
size 	of 	print 	type 	that 	could 	be 	used 	in 	advertising. 	However,
as 	discussed 	in 	owr 	prior 	co~oents (Axselle 	letter 	at 	P? 	2-3),
we 	continue 	to 	have 	concerns 	with 	a 	provision 	in 	proposed 	Rule
3.13. 	That 	provision 	states 	that 	advertising 	is 	to 	be 	considered
false, 	misleading, 	and 	deceptive 	if 	the 	advertisement 	provides
price 	information 	without 	stating 	what 	goods 	and 	services 	are
included 	in 	the 	price. 	This 	provision 	could 	be 	interpreted 	to
require 	lengthy 	disclosures 	that 	are 	not 	necessary 	to 	prevent
deception, 	and 	may 	increase 	advertising 	costs 	and 	ultimately
ra~se prices 	to 	consumers. 	Once 	again, 	we 	urge 	the 	Board 	to
reconsider 	the 	need 	for 	this 	provision.
In 	our 	previous 	comments 	(Morrison 	letter 	at 	po. 	2-3 	and
Axs~lle let~er 	at 	p. 	3), 	we 	also 	asked 	the 	Boa:d 	to 	recom~end the
repeal 	of 	Virginia 	Code 	Sections 	54-388(A)(2}(j) 	and 	54-
395(9)(ii}, 	which 	prohibit 	claims 	of 	superiority 	and 	advertisin~
of 	free 	services. 	We 	belie~e 	that 	these 	statutes 	un~ecessarily
restrict 	nondeceptive 	advertising. 	Without 	the 	removal 	of 	these
Final 	Report 	of 	the 	Governor's 	Regulatory 	Re:orm 	Advisory
Board 	(Oct. 	21, 	1935) 	[hereinaf:er 	cited 	as 	"Governor's
Report"). 	Report 	of 	the 	Task 	Force 	on 	Regulatory 	Review 	o~ 	the
Virginia 	Commission 	of 	Healt~ 	Re9ulatory 	Boards 	(M~y 	1985)
[hereinafter 	cited 	as 	"Task 	Force 	Report n ]. 	Portions 	of 	the 	Task
Force 	Report 	are 	included 	as 	Appendix 	H of 	the 	Governor's 	Repor~.
5 	Task 	Force 	Report, 	suora 	note 	4, 	at 	15.

M~s. 	Moi~a 	Lux 	-3-
stat~~ory barriers, 	beneficial 	revisions 	of 	the 	Board's 	rules 	may
je 	rendered 	meaningless. 	Thus, 	we 	join 	with 	t~e 	Governor's
Re~~latory Reform 	Advisory 	30ard 	in 	encoura3ing 	the 	Board 	of
O?:ometry 	to 	request 	le~is~ation that 	will 	re~ove unnecessary
restraints 	on 	advertising.o
Traj e 	~~ a ~ e s
The 	B03rd 	has 	proposej 	a 	series 	of 	rules 	~~at 	would 	allow
limited 	use 	of 	trade 	names 	by 	optometrists. 	While 	these 	changes
are 	a 	measurable 	improvement 	over 	the 	existing 	ban 	on 	the 	use 	of
trade 	names, 	some 	of 	the 	restri:tions 	included 	1n 	proposed 	Rule
4.1. 	appear 	to 	go 	beyond 	what 	is 	necessary 	to 	prevent 	deception
and 	guarantee 	accountability 	of 	optometrists 	to 	their 	patients
and 	the 	Board.
For 	the 	reasons 	st3teo 	in 	our 	previous 	com~ents 	(Axselle
letter 	at 	P? 	3-7), 	we 	ask 	the 	Board 	to 	reconsider 	the 	need 	for
proposed 	sections 	4.11>.. 2. 	and 	4.1A.3. 	(restrictions 	which 	seem 	to
li~it 	the 	use 	of 	a 	traje 	name 	comprising 	the 	name 	of 	one 	or 	more
of 	the 	optometrists 	in 	a' practice 	to 	the 	office 	location 	where
the 	named 	optometrists 	practice); 	4.1B.2. 	(ban 	on 	practicing
under 	more 	than 	one 	trade 	name); 	4.1A. 	and 	4.1B.3.(a)
(requirement 	that 	all 	advertisements 	using 	trade 	names 	include
the 	name 	of 	at 	least 	one 	optometrist 	associated 	with 	the 	office);
and 	4.1B.9. 	(ban 	on 	use 	of 	trade 	names 	that 	contain 	the 	names 	of
deceased 	or 	retired 	optometrists).
In 	order 	for 	any 	final 	re9~lations allowin9 	the 	use 	of 	trade
names 	to 	be 	effective, 	however, 	there 	must 	be 	correspondinJ
changes 	in 	the 	applicable 	statutes. 	Therefore, 	we 	join 	with 	the
Governor's 	Regulatory 	Reform 	Advisory 	Board 	and 	the 	Task 	Force 	in
urging 	the 	Board 	of 	Optometry 	to 	recommend 	necessary
modifications 	to 	Virginia 	Code 	Section 	54-388(9), 	which 	bans 	the
use 	of 	trade 	names. I
COIT~ercial 	?ractice 	Res~:ictions
In 	our 	earlier 	comments 	(Morrison 	letter 	at 	pp. 	3-6), 	we
discussed 	the 	potential 	harm 	to 	consumers 	that 	may 	arise 	from
statutory 	restrictions 	on 	the 	ability 	of 	optometrists 	to 	split
fees 	with 	non-optometrists 	and 	to 	lease 	~pace 	from 	or 	work 	as
employees 	of 	a 	commercial 	establishment.c 	~e 	are 	pleased 	that
the 	Governor's 	Regulatory 	Reform 	Advisory 	Board 	re:ommended 	that
the 	Board 	of 	~?tornetry "review 	these 	statutes 	~ith an 	eye 	towards
6 	Governor's 	Re;>ort, 	SUDra 	note 	A 	at 	24-25.	" ,
7 	1d. 	at 	24-25; 	Task 	Force 	Report, 	su'Ora 	note 	! 	at 	9.	.., ,
8 	Va. 	Code 	§§ 	54-388(.~)(2)(i}, 54-388(A)(2)(k), 	o:;d 	54-397.1.

proposing 	cha~ges 	to 	the 	Governor 	and 	t~e General 	Assem~ly."9
support 	this 	recom~endation because 	~e 	believe 	restrictions 	on
commercic~ practice 	rejuce 	co~peti:ion in 	the 	market 	fo~
optometric 	services 	and 	ffiay 	un~ecessarily 	raise 	prices.
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.'1rs. 	Moi~a 	L~x 	-4-
He
We 	also 	expressed 	concern 	in 	our 	previous 	comments 	(Morrison
letter 	at 	pp. 	6-8\ 	that 	statutory 	provisions 	governing 	prepaid
optometric 	pla~slO appear 	to 	be 	unnecessarily 	restrictive 	or 	have
anticompetitive 	effects 	that 	do 	not 	appear 	to 	be 	outweighed 	by
any 	countervailing 	benefits 	to 	the 	pu~lic. 	We 	again 	encourage
the 	Board 	to 	reconsider 	our 	previous 	comments 	and 	to 	reco~~end
legislation 	that 	would 	remove 	these 	restrictions.
Conclusion
with 	the 	exception 	of 	our 	stated 	reservations 	concerning
Rules 	3.1G., 	4.1A., 	and 	4.13., 	we 	support 	adopt.ion 	of 	the
proposed 	regulations. 	Revision 	of 	the 	Board 	of 	Optometry's
regulations 	alone, 	however, 	will 	not 	result 	in 	the 	fullest
possible 	benefits 	to 	the 	citizens 	of 	Virginia. 	We 	hope 	the 	Board
will 	nOw 	recommend 	that 	the 	General 	Assembly 	make 	those 	statutory
changes 	that 	would 	per~it 	the 	public 	to 	have 	access 	to 	a 	wider
range 	of 	truthful' inform~tion cbout. 	optometric 	services.
Together 	with 	the 	General 	Assembly 	anj 	the 	Governor, 	the 	Board
can 	create 	a 	regulatory 	structure 	that 	will 	allow 	valua~le
competition 	among 	optometrists 	and, 	in 	the 	process, 	improve 	the
efficiency 	with 	which 	optometric 	services 	are 	delivered, 	while
still 	protecting 	consu~ers fro~ 	false 	or 	decep~ive advertising.
v~urr:- 	"~',ly
-~~~ \~~~~anda 	B. 	pede~
J..:ting 	Director
Enc:osures
9 Governor's 	Re?ort, 	sunra 	no~e 	4,
10 Va. 	Code 	§§ 	38.1-898, 	38.1-903, 	38.2.-904, 	2:JG 	33.1-9D9.

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FrDEUL TRA!>£ COMMISSION
WA.SHI~. D. C. 	20110
September 	14, 	1984
~r. 	Richard 	Morr16on
Depar~ent of 	Bealth 	Regulatory 	Boards
Common~ealth of 	Virginia
517 	West 	Grace 	Street
P.O. 	Box 	27708
Richmond, 	VA 	23261
Dear 	~r. 	Morrison:
The 	Federal 	Trade 	commissi?n's 	Bureaus 	of 	Consumer 	Protec-
tion, 	Economics 	and 	Competition 	are 	pleased 	to 	respond 	to 	your
invitation 	to 	assist 	you 	in 	your 	revie~ of 	the 	statutes 	and 	regu-
lations 	enforced 	by 	the 	Virginia 	State 	Board 	of 	Optometry 	and
Veterinary 	Medicine 	by 	providing 	comments 	concerning 	the 	competi-
tive 	effects 	of 	various 	restrictions 	on 	optometrists 	and 	veteri-
narians.
The 	Federal 	Trade 	Commission 	seeks 	to 	promote 	the 	national
policy 	of 	encouraging 	competition 	among 	members 	of 	licensed 	pro-
fessions 	to 	the 	maximum 	extent 	compatible 	~ith other 	legitimate
state 	and 	federal 	goals.' 	For 	'several 	years, 	theComrcission 	has
been 	investigating 	the 	effects 	of 	restrictions'on 	the 	business
practices 	of 	professionals, 	'including 	optometrists, 	dentists,
la~yers, 	pnysicians 	and 	others. 	Our 	goal 	is 	to 	identify 	and 	seek
the 	removal 	of 	such 	restrictions 	that 	impede 	competition,
increase 	costs 	and 	harm 	consumers 	without 	providing 	countervail-
1'ng 	benefits. 	In 	offering 	these 	comments, 	we 	acknowledge 	that 	we
are 	not 	in 	a 	position 	to 	offer 	advice 	on 	what 	~inimum level 	of
qU3lity 	of 	care 	the 	states 	should 	require.
I. 	Restrictions 	on 	Advertising 	by 	Optometrists 	and 	Veterinarians
Advertising 	·serves 	to 	inform 	the 	public 	of 	the 	avail-
ability, 	nature, 	and 	prices 	of 	products 	and 	services, 	and 	thus
performs 	an 	indispensable, 501e 	in 	the 	allocation 	of 	resources 	in
a 	free 	enterprise 	system.- 	Because 	of 	the 	significant 	benefits
1 	These 	comments 	represent 	the 	vie~s 	of 	the 	Bureaus 	of 	Consumer
Protection, 	Econo~ics and 	Competition 	of 	the 	Federal 	Trade 	Com-
~is6ion 	and 	do 	not 	necessarily 	represent 	the 	views 	of 	the 	Federal
Trade 	Co~~ission or 	any 	individual 	Commissioner. 	The 	Federal
Trade 	Commission, 	ho~ever, has 	reviewed 	these 	comments 	~nd 	has
voted 	to 	~uthorize their 	pre~entation.
2 Bat e s 	v. 	S tat e 	Ear 	0 f 	Ar i z0 na, 	"3 3 	O. S. 	350, 	36" 	(19 77 ) •

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tnat 	CAn 	.ccr~e 	to 	con,u~ers froz 	nondecept1ve 	Advertilin9, 	~e
believe 	that 	only 	tAlse 	And 	deceptive 	advertilin9 	ahould 	be 	pro-
hibited. 	Any 	other 	standard 	is 	llkely 	to 	luppre.a 	potentially
useful 	infor~ation and 	may 	~el1 	contribute 	to 	an 	increase 	in
price,. 	Studies 	have 	ahown 	that 	price. 	tor 	profel.ional 	service,
are 	l~~er 	where 	adverti.ing 	txists 	thAn 	~here 	it 	i, 	prohib-
ited. 	Studies 	nave 	allo 	shown 	that 	.dvertising, 	~hic~ 	lead. 	to
lower 	prices, 	does 	not 	lead 	to 	lower 	quality 	services. 	There-
fore, 	to 	~e 	extent 	that 	nondeceptive 	advertising 	is 	restricted,
higher 	prices 	and 	a 	decrease 	in 	consumer 	welfare 	Kay 	~ell 	result.
Certain 	provisions 	of 	the 	statutes 	and 	regulation5 	governing
the 	practice 	of 	optometry 	and 	veterinary 	~edicine in 	Virginia 	do
restrlct 	truthful 	adverti5ing. 	for 	example, 	Virginia 	Code 	55 	54-
388(A)(2)(d) 	and 	5.-396(9)(ii) 	prOhibit 	optometric 	advertising
that 	·directly 	or 	indirectly· 	contains 	a 	clai~ 	of 	·professional
6uperiority.- 	Similarly, 	the 	Board 	of 	Veterinary 	Medicine's
Regulation 	lS-J 	defines 	as 	unprofessional 	conduct 	any 	advertising
that 	-directly 	or 	indirectly 	makes 	claims 	of 	professional
superiority.-
SUCh 	prohibitions 	on 	claims 	of 	superiority 	clearly 	lessen
rivalry 	among 	competing 	tellers, 	and 	the 	effects 	of 	the 	restric-
tion 	~ill 	depend 	on 	tne 	extent 	to 	~hich 	it 	prevents 	the 	communi-
cation 	or 	truthful 	information. 	At 	a 	minimum, 	A 	prohibition 	on
advertisements 	that 	contain 	claims 	of 	superiority 	restricts 	com-
parative 	advertising, 	which 	can 	be 	a 	highly 	effective 	~eans of
informing 	and 	attractiny 	customers 	and 	a~ 	important 	competitive
force. 	Wh~n a 	s~ller 	cannot 	compare "the 	attributes 	of 	his 	or 	her
s~rvice to-those 	of 	his 	or 	her 	c6mpetitors, 	the 	incentive "to
improve 	or 	to 	offer 	different 	products, 	services, 	or 	prices 	is
li~ely to 	be 	reduced.
3 	Boreau 	of 	Economics, 	Federal 	Trade 	Commission, 	Effects 	of
Restrictions 	on 	Advertising 	and 	Commercial 	Practice 	in 	the 	Pro-
fessions: 	The 	Case 	of 	Optometry 	(1980) 	(discussed 	at 	pp. 	5-7
below); 	Benham' 	Benham, 	Regulatinq 	through 	the 	Professions: 	A
perspective 	on 	Information 	Control, 	18 	J.L •• 	Econ. 	~21 	(1975);
8ennam, 	The 	Effects 	of 	Advertlslng 	on 	the 	Price 	of 	Eyeglasses, 	15
J.L. 	, 	Econ. 	337 	(1972).
• 	Bureau 	of 	Economics, 	Federal 	Trade 	Commission, 	Effects 	of
Restrictions 	on 	Advertising 	and 	Commercial 	Practice 	in 	the
Professions: 	The 	Case 	of 	Optometry 	(1980) 	(discussed 	at 	pp. 	5-7
belo~)i J. 	Cady, 	Restricted 	Advertising 	and 	Competition: 	The
Case 	of 	Retail 	Drugs 	(1976); 	McChesney 	« Muris, 	The 	Effects 	of
Advertising 	on 	the 	Qualitv 	of 	Leaal 	Services, 	65 	A.B.A.J. 	1503
(1979); 	Muris 	• 	McChesney, 	Advertisina 	and 	the 	Price 	and 	Qu~litv
of 	Leaal 	Services: 	The 	Case 	for 	Leaal 	Clinics, 	1979 	Am. 	B.
Found. 	Research 	J. 	179 	(1979) •.

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A ban 	on 	cl&i&, 	of 	luper10r1ty 	1. 	likely 	to 	~ 	eVln 	aort
injurioul 	to 	competition 	and 	conlum.r. 	if 	1nterprtt~ to 	~roh1b1t
4 	~lder 	rAnge 	of 	truthful 	claim.. 	Virtually 	all 	.tatementl 	about
a 	aeller'. 	qualifications, 	experience, 	or 	ptr!oraance 	can 	be
conaidtred 	to 	be 	i~plicit 	claims 	of 	.uperiority, 	and 	a 	ban 	on 	all
such 	C1Ai~s would 	~aKe 	it 	very 	difficult 	for 	& leller 	to 	provide
con£u~er, 	truthful 	infor~Ation About 	the 	differences 	between 	his
services 	and 	those 	of 	his 	competitors.
Virginia 	Code 	S 	S~-388(A)(2)(d) 	also 	prohibits 	the 	adverti!-
lng 	of 	ofters 	of 	free 	optometric 	services 	or 	ex~inations. 	~e
are 	aware 	of 	the 	potential 	for 	-bait 	and 	switch- 	and 	other 	decep-
tive 	schemes 	in 	such 	advertising. 	However, 	we 	do 	not 	believe
that 	a 	total 	ban 	on 	the 	offering 	of 	free 	services 	is 	necessary.
Truthful 	advertising 	of 	the 	availability 	of 	tree 	services 	CAn
obviously 	be 	of 	great 	~nefit 	to 	consumers: 	also, 	such 	offers 	can·
be 	a 	particularly 	valuable 	promotional 	tool 	for 	new 	practitioners
~ho 	are 	trying 	to 	enter 	the 	market.
finally, 	Regulation 	15-r 	of 	the 	Board 	of 	Veterinary 	Medi-
cine's 	Rules 	and 	Regulations 	defines 	unprofessional 	conduct 	to
includ~ ·utilizing 	the 	services 	of 	solicitors.- 	This 	rule 	may 	in
some 	instances 	impede 	the 	flow 	of 	truthful 	commercial 	infor~ation
from 	veterinarians 	to 	potential 	clients. 	Such 	restrictions 	on
the 	free 	flo~ of 	information 	may 	make 	it 	more 	difficult 	for
buyers 	to 	learn 	about 	differences 	in 	price 	and 	quality, 	thereby
insulating 	competitors 	from 	direct 	competition 	and 	reducing 	the
incentive 	to 	compete 	on 	the 	merits. 	Although 	a 	state 	may 	insist
~hat 	solicitors_ be 	beld 	to 	the 	same 	standard 	of-cond~ct as 	the
professionals 	that 	they 	repre~ent, and 	a 	past 	pattein- of 	~buses
may 	warrant 	regulations 	tailored 	to 	prevent 	specific 	abuses, 	a
blanket 	ban 	on 	the 	utilization 	of 	solicitors 	is 	overly 	broad 	to
be 	a 	justifiable 	form 	of 	professional 	regulation.
II. 	Restrictions 	on 	Other 	Business 	Practices 	by 	Optometrists 	and
veterinarians
Other 	provisions 	of 	the 	statutes 	and 	regulations 	governing
the 	practice 	of 	optometry 	in 	Virginia 	restrict 	business 	practices
other 	than 	advertising. 	for 	example, 	Virginia 	Code 	S 	54-388
(A)(2)(i) 	prohibits 	the 	dividing 	of 	professional 	fees 	~ith 	non-
optometrists. 	This 	provision 	may 	restrict 	partnerships 	or 	other
business 	relationships 	between 	optometrists 	and 	other 	health 	care
providers 	(such 	as 	dentists 	or 	podiatrists) 	~ho ~ight provide
complementary 	health 	care 	services 	at 	a 	single 	office 	location.
Virginia 	Code 	5S 	54-388(A)(2)(k) 	and 	54.397.1 	make 	it
illegal 	for 	an 	optometrist 	to 	be 	employed 	by 	or 	locate 	gis 	or 	her
practice 	at 	a 	·commercial 	or 	mercantile 	establishment.-
5 	Section 	54-388(A)(2)(K) 	does 	allow 	such 	an 	establishment 	to
employ 	an 	optometrist 	if 	it 	employed 	a 	full-time 	optometrist 	on
(footnote 	continued)
3

S1=ilArly, 	BOArd 	of 	Veterinary 	Kedicine 	~e9ul~tion lS~C bani 	~he
prActice 	of 	veterinary 	medicine 	by 	a 	Ie.lee 	01 	any 	co~erciAl or
~ercAntile et.bliahment. 	These 	provisions 	prevent 	opto&ttrilt.
And 	veterinarians 	trom 	loclting 	their 	practices 	inside 	retail
drug 	or 	depar~ent .tores, 	vhere 	they 	can 	~.tlbli.h and 	aaintain
A nigh 	volume 	of 	patients 	beCAu.e 	of 	the 	convenience 	of 	auch
locations 	And 	a 	high 	number 	of 	·walk-in- 	patients. 	This 	higher
volume 	~ay, 	in 	turn, 	6llo~ profelsional 	firms 	to 	reali%c
economies 	of 	.cale 	that 	may 	~ 	passed 	on 	to 	consumers 	in 	the 	form
of 	lower 	prices. 	These 	restrictions 	allo 	SAy 	li&it 	the 	Avail-
ability 	of 	equity 	capital 	for 	profe£sional 	practices, 	which
increases 	the 	cost 	of 	capital 	to 	professional 	firms 	And 	further
hinders 	the 	development 	of 	high-volume 	practiccs 	that 	may 	be 	able
to 	reduce 	costs 	through 	economics 	of 	Beale. 	.
Virginia 	Code 	S 	S.-388(A)(2)(g) 	and 	Board 	of 	Optometry
Regulation 	11-0 	prohibit 	the 	use 	of 	trade 	names 	by 	optome- 	'.
trists. 	Trade 	names 	-- 	such 	as 	·Fourth 	Street 	Contact 	Lens
Clinic· 	or 	·Southern 	Vision 	Care 	Centers· 	-- 	can 	be 	virtually
essential 	to 	the 	establishment 	of 	large 	group 	practices 	and 	chain
operations 	that 	are 	able 	to 	exploit 	economies 	of 	scale 	and,
consequently, 	to 	offer 	~o~er prices. 	Trade 	names 	are 	chosen
because 	they 	are 	easy 	to 	remember 	and 	may 	also 	identify 	the 	loca-
tion 	or 	other 	characteristics 	of 	a 	practice. 	OVer 	time, 	a 	trade
name 	ordinarily 	comes 	to 	be 	associated 	with 	a 	certain 	level 	of
quality, 	service 	~nd 	price, 	vhich 	facilitates 	consumer 	search.
,These 	kinds 	of 	restrictions 	on 	the 	business 	practices 	of
professionals 	can 	reduce 	competition 	in 	heal~h care 	markets 	by
preventing 'the 	formation 	and 	deveropm-ent 	of 	innovative 	forms 	of'
professional 	practice, 	such 	as 	chain 	optometric 	firms, 	that 	may
be 	more 	efficient, 	provide 	comparable 	quality, 	and 	offer 	competi-
tion 	to 	traditional 	providers. 	Por 	example, 	in 	a 	case 	challeng-
ing 	various 	ethical 	code 	provisions 	enforced 	by 	the 	American
Medical 	Association 	(-AHA-), 	the 	Commission 	found 	that 	AKA 	rules
prohibiting 	physicians 	from 	working 	on 	a 	salaried 	basis 	for 	a
hospital 	or 	other 	lay 	institution 	and 	from 	entering 	into 	partner-
ships 	or 	similar 	relationships 	yith 	non-physicians 	unreasonably
restrgined 	competition 	and 	thereby 	violated 	the 	antitrust
laws. 	The 	Commission 	concluded 	that 	the 	AMA's 	prohibitions 	kept
physicians 	from 	adopting 	more 	economically 	efficient 	business
formats 	and 	that, 	in 	particular, 	these 	restrictions 	preclUded
competition 	by 	organizations 	not 	directly 	and 	completely 	under
the 	control 	of 	physicians. 	The 	Commission 	also 	found 	that 	there
yere 	no 	countervailing 	procompetitive 	justifications 	for 	these
restrictions.
June 	3, 	1938.
6 	In 	re 	American 	Medical 	Association, 	94 	F.T.C. 	701 	(1978),
aff'd, 	638 	F.2d.' 	443 	(2d 	Cir. 	1980), 	aff'd 	memo 	by 	an 	eoua11y
divided 	court l 	455 	U.S. 	676 	(19£2).
· .

Proponent. 	of 	auCh 	re.trictions 	clli~ 	tb~t 	Lhey 	Irt 	nece.-
lary 	to 	~~int&in a 	hi9h 	levtl 	of 	QUI11ty 	1n 	tht 	prottl.1onal 	.tr-
victs 	zarket. 	ror 	example, 	~ey 	clai= 	thAt 	.aploytt-ezploytr 	and
other 	relationships 	between 	prOft •• lonal, 	a~ 	non-profe.sionals
~ill 	result 	in 	lay 	interference 	1n 	the 	proftl5ional 	judgment 	of
licensees, 	thus 	causing 	I 	decllne 	in 	qUlllty. 	Thty 	IIBert 	that
lay 	corporations 	.uch 	IS 	chain 	retailer, 	would 	~ 	unduly 	con-
cerned 	wi~ 	profitt, 	not 	with 	the 	quality 	of 	professional 	care.
Allegedly, 	voile 	.uch 	firms 	might 	offer 	lover 	pricts, 	they 	~i9ht
also 	encourage 	their 	professional 	employees 	to 	cut 	corners 	in
order 	to 	maintain 	protits. 	According 	to 	those 	who 	favor 	restric-
tions, 	the 	public 	vould 	suffer 	doubly 	because 	profession~ls who
practice 	in 	traditional, 	non-commercial 	settings 	would 	~ 	forced
to 	lower 	the 	price 	and 	quality 	of 	their 	services 	in 	order 	to
compe te.
'lhe 	Federal 	Trade 	Commission's 	Bureaus 	of 	Economics 	and
Consumer 	Protection 	have 	issued 	t~o 	studies 	tnat 	provide 	evidence
that 	restrictions 	on 	commercial 	practice 	by 	optometrists
including 	restrictions 	on 	the 	business 	relationShips 	between
optometrists 	and 	non-optometrists, 	on 	commercial 	locations 	and 	on
trade- name 	usage 	-- 	ar~, 	in 	fact, 	harmful 	to 	consumers.
The 	first 	study,7 	conducted~itn the 	help 	of 	two 	colleges 	of
optometry 	and 	the 	chief 	optometrist 	of 	the 	Veterans 	Administra-
tion, 	compared 	t~e price 	and 	quality 	of 	eye 	examinations 	and
eyeglasses 	across 	cities 	~ith a 	variety 	of 	legal 	enVironments.
Cities 	were 	classified 	as 	markets 	~~re 	advertising 	was 	pr~sent
if· the r e 	was 	adve r tis i n9 	0 f 	eye g 1 ass e s 	0 r 	eye 	e xam sin 	loci1 .
newspapers 	or 	·Y~llowPages.· 	Cities 	were 	classified .as 	markets
with 	cnain 	optometric 	practice 	if 	eye 	examinations 	were 	available
at 	l~rge 	interstate 	optical 	firms. 	Since 	restraints 	on 	corporate
practice 	of 	optometry, 	commercial 	locations 	and 	trade 	name 	usage
n~cessarily restrict 	the 	operations 	of 	chain 	optometric 	firms,
the 	study 	provides 	important 	information 	on 	the 	likely 	effects 	of
such 	restrictions.
The 	study 	found 	that 	prices 	Charged 	in 	1977 	for 	eye 	examina-
tions 	and 	eyeglasses 	~ere 	significantly 	higher 	in 	cities 	without
chains 	and 	advertising 	than 	in 	cities 	~here advertis~ng and 	chain
firms 	were 	present. 	Tne 	average 	price 	charged 	by 	optometrists 	in
the 	cities 	vithout 	chains 	and 	advertising 	~a5 	33.6\ 	higher 	than
in 	the 'cities 	with 	advertising 	and 	chains 	($9.(.46 	versus 	$70.72).
Prices 	were 	approximately 	17.9% 	higher 	as 	a 	function 	of 	the
absence 	of 	chains; 	the 	remaining 	price 	difference 	was 	attributed
to 	the 	absence 	of 	advertising.
7 	Bureau 	of 	Economics, 	Federal 	Trade 	Commission, 	Effects 	of
Restrictions 	on 	Advertising 	and 	Commercial 	Pr~ctice 	in 	the
Professions: 	The 	Case 	of 	Optometry 	(1980).
5

I
I
/j
Th~ 	data 	al.o 	.ho~fd 	that 	th~ 	Quality 	of 	vlslon 	care 	wa. 	not
lo~er 	in 	cities 	wher~ 	chain 	opto~etric practict 	and 	advertising
were 	pre.ent. 	The 	thocougnne'8 	of 	eye 	fIAminations, 	the 	accuracy
of 	eyeglass 	prescriptions, 	the 	accuracy 	and 	~orl~An'hip of 	eye-
91A6sfs, 	and 	the 	extent 	of 	unnecessary 	prtscribing 	wert, 	on
AverAge, 	the 	lame 	in 	the 	both 	types 	of 	citie£.
The 	second 	£tucy 	co~pAred the 	cost 	and 	Quality 	of 	cosmetic
contact 	lens 	fitting 	by 	various 	types 	of 	eye 	care 	profeS6ional5. 8
Tnis 	stue,., 	was 	designed 	and 	conducted 	with 	the 	assistance 	of 	the
~a)or 	natlonal 	professional 	associations 	representing 	ophthal-
~ol09ists, optometrists 	and 	opticians. 	Its 	findings 	are 	based 	on
examinations 	and 	interviews 	of 	more 	than 	500 	contact 	lens 	wearers
in 	18 	urban 	areas.
The 	study 	found 	that 	there 	were 	few, 	if 	any, 	~eaningful dif-
ferences 	in 	the 	quality 	of 	cosmetic 	contact 	lens 	fitting 	provided
by 	ophthalmologists, 	o~toroetrists, and 	opticians. 	The 	study 	also
showed 	that, 	on 	average, 	·corom~rci~l· optometrists 	-- 	that 	is,
optometrists 	who 	worked 	for 	a 	chain 	optical 	fir~ or 	advertised
heavily 	-- 	fitted 	contact 	lenses 	at 	least 	as 	well 	as 	other
fitters, 	but 	charged 	significantly 	lower 	prices.
These 	studies 	provide 	evidence 	that 	restrictions 	on 	employ-
ment, 	partnerShip, 	or 	other 	relationships 	between 	professionals
ana 	non-professionals, 	on 	commercial 	locations 	and 	on 	trade 	name
usage 	tend 	to 	raise 	prices 	above 	the 	levels 	that 	would 	otherwise
.prevail, 	but 	do 	not. seem 	to 	raise 	tne 	quality 	of 	care 	in 	the
vis ion 	car € 	mar ke t . 	Al the ugh 	the s est udie·s 	de a1 	s pe c i fie a 11 y
~~ith 	restrictions 	on 	the 	practice 	of 	optometry, 	the 	results 	may
be 	applicable 	to 	analogous 	restrictions 	in 	other 	areas, 	such 	as
veterinary 	medicine.
111. 	Restrictions 	on 	Prepaid 	Optometric 	Service 	Plans
We 	also 	have 	revie~ed Chapter 	27, 	Title 	38.1 	of 	the 	Virginia
Coqe, 	relating 	to 	Plans 	for 	Future 	Dental 	or 	Optometric 	Services,
an9 	have 	identified 	several 	provisions 	that 	appear 	to 	be 	unneces-
sarily 	restrictive 	or 	~hose 	anticompetitive 	effects 	may 	out~eigh
any 	countervailing 	benefits 	to 	the 	public.
Virginia 	Code 	S 	38.1-898 	requires 	that 	a 	~ajority 	of 	the
board 	of 	directors 	of 	a 	prepaid 	optometric 	service 	plan 	be
optometrists. 	It 	is 	not 	apparent 	~hat public 	benefit 	results
from 	requiring 	provider 	control 	of 	all 	plan 	boards. 	We 	are
una~are of 	any 	reason 	~hy 	consumers, 	entrepreneurs, 	and 	others
sbould 	not 	also 	be 	permitted 	to 	establish 	and 	operate 	such 	plans
in 	competition 	~ith 	provider-controlled 	plans. 	Such 	lay 	boards
a 	Bureaus 	of 	Consumer 	Protection 	and 	Economics, 	federal 	Trade
Commission, 	A comparative 	Analysis 	of 	Cosmetic 	Contact 	Lens
Fitting 	by 	Ophthalmologists, 	Optometrists, 	and 	opticians 	(1983).
6

I
Iii
CAn 	certlinly 	obtAin 	Any 	neCt •• Ary 	prof"lionAl 	.1~rt1't v1t~out
hAvio9 	provider. 	control 	the 	plan'. 	board 	of 	director ••
Section 	38.1-903 	rtQuirt. 	th.t 	optometric 	lervice 	plan 	lub-
scriber, 	bave 	-fret 	choice 	of 	lny 	participltio9 	••• 	optome-
triat. 8 	So~e 	.tat~G 	interpret 	.uch 	clauaes 	to 	require 	that
participatlon 	be 	open 	to 	any 	licensed 	provider. 	If 	this 	aection
i£ 	interpreted 	in 	this 	vay, 	it 	in 	fact 	could 	rt£trict 	the 	choices
Available 	to 	consu~ers. 	Mandating 	free 	Choice 	of 	provider 	in 	all
prepay~ent pro9ra~s prevents 	plans 	trom 	offerin;, 	And 	.ubscri~r,
from 	freely 	and 	volunt~rily choosing 	to 	enroll 	in, 	programs 	that
may 	li~lt 	subscriber 	choice 	of 	participating 	providers. 	Such
plans, 	in 	turn, 	~ay 	lo~er 	program 	costs 	by 	a~lecting less 	expen-
sive 	and 	more 	quality-conscious 	providers, 	and 	~ay 	generate
competitive 	pres£ur~ on 	all 	prOViders 	to 	control 	costs 	or 	raise
qu~lity. 	This 	concept 	is 	evident 	in 	both 	healtb 	maintenance
organizations 	(·SKOs·) 	and 	preferred 	provider 	organizations
(8PPOS 8 ). 	As 	you 	know, 	Virginia 	w~s 	one 	of 	the 	first 	states 	to
pass 	legislation 	authorizing 	PPO 	arrangements, 	and 	the 	mandatory
8free 	choice 8 	provision 	of 	Section 	38.1-903 	appears 	to 	~ 	at 	odds
~ith 	the 	purpose 	and 	intent 	of 	that 	~ore 	recent 	statute. 	In 	its
case 	against 	tne 	American 	Medical 	Association, 	the 	Commission
found 	that 	the 	origin 	and 	history 	of 	the 	medical 	profession's
insistence 	on 	this 	type 	of 	provision 	for 	prepa~ent plans 	-makes
clear 	that 	the 	purpose 	••• 	is 	primarily 	the 	anticompetitive 	one
of 	suppressing 	the 	activ~ties of 	competitors, 	not 	solicitude 	for
the 	rights 	of 	patients. 8
Section 	38.l~904 denies 	the 	Insurance 	Commission 	discretion
to 	license 	more 	than 	one 	plan 	in 	a 	given 	geographic 	area 	if 	-
-licensing 	more 	than 	one 	plan 	for "t.he 	same 	geographical 	area 	... ill
not 	promote 	the 	public 	~elfare.· 	Wnile 	we 	do 	not 	know 	ho~ 	this
provision 	in 	fact 	has 	been 	applied 	or 	~ill 	be 	applied, 	it 	could
be 	used 	to 	protect 	current 	market 	participants 	from 	competition
from 	ne ... 	market 	entrants, 	or 	at 	least 	to 	discourage 	such 	ne ...
entry. 	In 	any 	event, 	it 	does 	not 	appear 	to 	serve 	any 	substantial
public 	interest.
Section 	38.1-909 	provides 	that 	prepaid 	optometric 	service
plans 	subject 	to 	this 	chapter 	8 s hall 	not 	engage 	in 	any 	other
business,· 	~ith 	the 	exception 	of 	governmental 	health 	care
programs. 	This 	restriction 	may 	unnecessarily 	prevent 	plans 	from
diversifying 	and 	offering 	their 	subscribers 	additional 	products
or 	benefits 	packages 	that 	may 	be 	more 	convenient 	and 	desirable.
For 	example, 	many 	commercial 	insurers 	have 	offered 	coverage
packages 	to 	employers 	that 	include 	accident 	and 	health 	insurance,
dental 	benefits, 	life 	insurance, 	~orKers' 	compensation 	coverage,
and 	even 	pensions 	and 	annuities. 	Permitting 	optometric 	plans 	to
diversify 	in 	~t 	least 	some 	ways 	to 	meet 	market 	demands 	-- 	sub-
ject, 	of 	course, 	to 	appropriate 	regulatory 	oversight 	-- 	~ay 	help
9 	In 	re 	~erican Medical 	Ass~ciation, supra 	n.7 	at 	1015.
7

I
III
tl')ezt 	to 	be 	~or~ 	t!!~ct1vt coztpetitors 	And 	better 	.eet 	the 	n~ed,
of 	the 	pUblic.
In 	conclusion, 	than~ 	you 	for 	your 	~1llin9ne" 	to 	consider
our 	co~~nts. 	We 	Ire 	enclosing 	copies 	of 	the 	Itudie, 	referred 	to
in 	our 	comments. 	Please 	let 	us 	know 	if 	~e 	can 	~ 	of 	any 	further
a.51stance.
Sincerely,
I
\ 	. 	• 	J 	•
Carol 	T. 	Crawford
Director
Bureau 	of 	Consumer 	Protection
Enclosures
8

I: ." . tI.
.. ~
FtDER,lJ. TRADE: COMMISSION
WUHIN~OH. D. C. 20HO
,v'U.AU or
coI'(stnoQ:.1 n OTt rno ~ 	May 	22, 	1905
The 	Bonorable 	Ralph 	L. 	Axselle, 	Chair~~n
Governor's 	Regulatory 	Reform 	Board
General 	Assembly 	Building
Co~on~eal~ of 	Virginia
910 	Capitol 	Street
Richmond, 	VA 	23219
Dear 	Mr. 	Chairman:
The 	Federal 	Trade 	Commission's 	Bureaus 	of 	Consumer
Protection, 	Economics, 	~nd 	Competition 	are 	pleased 	to 	respond 	to
the 	invitation 	of 	Richard 	D. 	Morrison, 	Regulatory 	Revie~
Coordinator, 	to 	assist 	you 	in 	the 	ongoing 	revie~ of 	health
?rofessio~a1 regulatory 	boards 	by 	the 	Co~~on~ea1th of
Virginia. 	As 	you 	are 	a~are, 	we 	submitted 	comments 	last 	year 	to
Mr. 	Morrison 	concerning 	la~s 	and 	regulations 	governing 	the
professiocs 	of 	Dent~stry, Medicine, 	Optometry, 	and 	Veterinary
Medicine.~ 	Our 	previous 	~omments focused 	on 	(1) 	restrictions 	on
advertising 	by 	these 	professionals, 	(2) 	restricti\"',.~ on 	the
business 	practices 	of 	these 	professionals, 	1ncludi~. 	~or?orate
employment, 	business 	relationships 	bet'Ween 	professi~ .a1s 	and 	non-
professionals, 	commercial 	locations, 	and 	trade 	name 	usage, 	and
(3) 	restrictions 	on· the 	formation .and 	operation 	of ·prepaie 	eenta1
and 	optometric 	plans. 	Our 	previous ·corn.rnents 	also 	addressed 	both
statutory 	and 	regulatory 	provisions 	covering 	all 	three 	of 	these
areas. 	Finally, 	our 	previous 	co~~ents discussed 	in 	some 	eetail
the 	negative 	effects 	that 	restrictions 	on 	noneeceptive
aevertising 	ane 	commercial 	practices 	can 	have 	on 	consumers 	and
cOItoetition.	. 	.
We 	are 	now 	commenting 	on 	the 	regulatory 	changes 	that 	have
been 	proposed 	by 	the 	Boards 	governing 	these 	professions. 	In
offering 	these 	co~~ents, our 	goal 	continues 	to 	be 	to 	identify 	and
seek 	the 	removal 	of 	such 	restrictions 	that 	impede 	competition,
increase 	costs, 	and 	harm 	consumers 	without 	providing
countervailing 	benefits. 	While 	'We 	also 	direct 	these 	comments 	to
the 	Regulatory 	Boares, 	we 	urge 	the 	Reform 	Board 	to 	consider 	our
1 	These 	co~~ents 	represent 	the 	v1e~s 	of 	the 	Bureaus 	of 	Consumer
Protection, 	Economics, 	ane 	Competition 	of 	the 	Feceral 	Trade
Co~ission and 	do 	not 	necessarily 	represent 	the 	views 	of 	the
Commission 	or 	any 	individual 	Commissioner. 	The 	Commission,
however, 	has 	authorized 	the 	submission 	of 	these 	comments.
2 	We 	submitted 	separate 	comments 	on 	the 	regulations 	of 	the 	(1)
Boarcs 	of 	Dentistry 	and 	Medicine, 	dated 	August 	21, 	1964, 	ane 	(2)
Boares 	of 	Optometry 	'Inc 	Veter·inary 	Mec icine, 	dated 	September 	14,
1984. 	Copies 	of 	both 	co~~ents are 	attached.

. ..- 	. ,.~.
Bon. 	Ralph 	L. 	Axselle 	-2-
vie~s 	~hen 	it 	recommencs 	to 	the 	Governor 	the 	position 	he 	Ihsuld
take 	vhen 	he 	maKes 	tinal 	co:=ents 	to 	the 	Regulatory 	Boards.
We 	~ill 	first 	provide 	a 	brief 	overvie~ of 	our 	pr~vious
cot:m:ents, 	t.be 	Boares' 	responses 	thereto, 	ano 	provisions 	in 	the
proposed 	regulations 	that 	~e 	believe 	continue 	to 	present
potential 	problems. 	In 	an 	attachment, 	ve 	L~en discuas
individually 	and 	in 	detail 	tach 	Board's 	proposed 	regulations.
While 	this 	format 	leads 	to 	lome 	repetition 	because 	of 	similar
provisions 	proposed 	by 	several 	Boards, 	we 	believe 	that 	each 	Board
will 	find 	it 	easier 	to 	read 	L~e 	comments 	that 	apply 	to 	it
separately.
One 	of 	the 	primary 	issues 	that 	our 	previous 	comments
Acdressed 	vas 	restraints 	on 	nondeceptive 	advertising. 	We 	listed
statutory 	and- regulatory 	provisions 	that 	appeared 	to 	restrict
nondeceptive 	advertising 	by 	dentists, 	physicians, 	optometrists,
and 	veterinarians, 	and 	we 	urged 	their 	removal. 	In 	response, 	~e
Board 	of 	Veterinary 	Medicine 	proposed 	the 	removal 	of 	many 	of 	the
restrictions 	in 	this 	~rea, 	the 	Board 	of 	Optometry 	also 	proposed
simplifying 	the 	rules 	governing 	advertising, 	and 	the 	Board 	of
Dentistry 	proposed 	the 	e11mination 	of 	certain 	restrictions. 	The
Board 	of 	Medicine 	stated 	that 	it 	would 	take 	our 	comments 	under
advisement.
Potential 	problems 	remain, 	hcwever. 	Neitner 	the 	Board 	of
.Optoroe try 	noe 	the - Boa rd 	of 	Mea i cine 	has 	r ecom:nended 	r emov al 	.0 f
.statutory 	restrictions 	that 	appear 	to 	prohibit 	some 	.types 	of
nondeceptive 	advertising~ 	Moreover, 	the 	Boara 	of 	Dentistry 	has
proposed 	new 	resulations 	that 	appear 	to 	go 	beyond 	prohibiting
false 	and 	deceptive 	advertising, 	ana 	impose 	additional
unnecessary 	burdens 	on 	nonceceptive 	advertising.
The 	second 	major 	issue 	that 	~e 	addressee 	in 	our 	previous
cp~~en~s involved 	restrictions 	on 	commercial 	?ractice, 	including
~orporate emploi~ent, commercial 	locations, 	and 	trade 	name
usage. 	Again, 	the 	Board 	of 	Veterinary 	Medicine 	proposed 	the
removal 	of 	those 	restrictions 	contained 	in 	its 	regulations. 	In
addition, 	the 	Board 	of 	Optometry 	proposed 	to 	allo~ some 	trade
name 	usage.
Potential 	problems 	remain 	in 	this 	area, 	too, 	however.
Although 	many 	0: 	the 	co~~ercial practice 	restrictions 	are
statutory, 	none 	of 	the 	Boards 	recommended 	any 	changes 	to 	existing
statutory 	prohibitions 	on 	corr~ercial 	practice 	by 	optometris~s,
dentists, 	and 	physicians. 	(No 	such 	restrictions 	governing
veterinarians 	exist.) 	Further, 	the 	Board 	of 	Optometry's 	proposed
3 We 	note 	that 	we 	~re 	not 	1~ 	a 	position 	to 	o!fer 	advice 	on 	~hat
~inirnu~ level 	of 	quality 	of 	care 	the 	states 	should 	require.

Tnank 	you 	for 	yo~= 	willingness 	to 	consider 	our 	comments.
Please 	let 	us 	Kno~ 	if 	~e 	can 	be 	of 	any 	further 	assistance.
/
regulations 	govtrning 	trade 	n~e 	usage 	appear 	to 	go 	beyond 	what
is 	necessary 	to 	prevent 	deception 	and 	may 	unduly 	b~rden 	trade
n a..'b e 	usa g e •
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.'"
Bon. 	Ralph 	L. 	Axs~lle 	-3-
Sincer~ly,
Carol 	T. 	Crawfor
Director
Attachments

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i·'
R£?8R~ OF 	~~E 	BUREAUS 	OF
C::;~S:;~£R 	PR:":":::::O~';, 	CO!"'.PE7:':'ION, 	A:,:) 	ECONO~ICS
OF 	T~~ 	fE::;£RA: 	TRADE 	CO~~:SSION
TO 	THE
CO~MO~WEA~~H OF 	VIRGI~IA
GOVE~~OR'S 	RE~0LATORY 	REFO~~ 	BOARD
ON
REVIEW- OF 	REGvLATIONS 	PROPOSED 	BY
Tt:,;" 	BOARD 	OF 	OPTOMETRY	.. -
TEE 	BOhRD 	OF 	DENTISTRY
Tt.=';" 	BO;'.RD 	OF 	VET£RINARY 	ME;):CINE, 	and
Te';" 	BO;'_':\D 	OF 	MEDICI~E	.. -
May 	22, 	1985
These 	co~~en~s 	rep=esen~ ~~e 	vie~s 	of 	the 	Bureaus 	0: 	Consuner
Protection, 	Economics, 	and 	Co~?etition 0: 	the 	Federal 	Trade
Co~~ission and 	do 	net 	necessarily 	re?resent 	the 	vie~s 	of 	the
Co~~ission or 	any 	individual 	Co~~issione=. 	The 	Co~~ission,
ho~ever, 	has 	au:horize~ the 	su~~ission 0: 	these 	comrnen:s.

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I BOARD 	OF 	op~O~r~RY
O~r 	?rev:ous 	co~~entsl d:scusseo 	severa: 	statutory
provisions 	restricting 	advertising 	and 	bus:ness 	practices 	t~at 	we
suggested 	may 	harm 	cor.s~~e:s. 	~~e 	B~a:d 	0: 	Optometry 	did 	not
recorr~end any 	stat~tory changes 	but 	d:d 	propose 	changes 	in 	its
regulations 	that 	would 	simplify 	the 	rules 	governing 	advertising
and 	~ould 	allo~ 	some 	use 	of 	trade 	names. 	However, 	some 	of 	the
?roposed 	restrictions 	may 	go 	beyond 	~hat 	is 	necessary 	to 	prevent
deception.
Advertisino 	Restrictions
The 	Board 	of 	O?tome:ry 	~as 	?roposeo 	re?~acing 	the 	current
list 	of 	advertising 	disclosur~ requirements 	(Regulation 	III) 	with
Section 	3.1G., 	which 	would 	prohi~it false 	and 	misleading
2~vertising and 	require, 	whenever 	a 	price 	is 	advertised, 	that 	the
advertisement 	state 	what 	900=5 	anG 	services 	are 	included 	in 	the
price. 	The 	purpose 	0: 	t~is 	provision 	appears 	to 	be 	to 	prevent
false 	and 	misleading 	acvertisins. 	~e 	have 	some 	concern, 	however,
~bout 	the 	proposed 	requirement 	that 	any 	price 	advertisement 	state
what 	goods 	and 	services 	are 	included 	in 	the 	price. 	This
provision 	could 	be 	interpreted 	to 	require 	detailed 	and 	lengthy
disclosures 	that 	are 	not 	necessary 	to 	prevent 	deception 	but
oerely 	impose 	extra 	costs 	on 	the 	advertisers, 	costs 	that 	are
1 Letter 	to 	Richard 	Morrison, 	Department 	of 	Health 	Regulatory
Boards 	from 	Carol 	T. 	Crawfo~d, 	Director, 	Bureau 	of 	Consumer
Protection 	(September 	14, 	1984) 	(hereina:ter 	referred 	to 	as 	t~e
·Se?tember 	1934 	co~~ents~).
- 	2 	-

" <
ultimately 	paid 	for 	by 	consumers. 	For 	example, 	an 	optomet:is~
who 	~ished 	to 	advertise 	a 	pri:e 	for 	an 	eye 	exam 	could 	be 	required
to 	dis:lose 	the 	specific 	procedures 	that 	are 	included 	in 	the
exam. 	Further, 	the 	vague 	lan;uage 	of 	the 	provision 	could 	chill
legitimate 	acvertising 	beca~se potential 	advertisers 	might 	be
unsure 	of 	its 	meaning. 	~e 	reco~~end that 	the 	Board 	reconsider
the 	need 	for 	this 	provision.
We 	again 	ur;e 	the 	Boarj 	to 	reco~~end 	that 	Virginia 	Code
Sections 	54-388 	(A)(2)(d) 	and 	54-396 	(9)(ii), 	.... hich 	prohitJit
clai~s of 	superiority 	and 	advertising 	of 	free 	services, 	be
repealed, 	so 	that 	only 	false 	or 	deceptive 	advertising 	is
h " 	· .. 	'"	pro.l 	l.e_. 	A prohib~tion 	of 	false 	advertising 	should 	be
s u f f i c i e n t 	top rev e nt 	dec e p t i 'J e 	c 1 aim s 	0 f 	sup e r i u~' ; -~' and 	0 f 	f: e e
se:vices. 	As 	noted 	in 	our 	p:evio~s co~~ents 	(Septeh~er 1984
cO~uents, 	at 	pp. 	2-3), 	th~se 	code 	p:ovisions 	appear 	to 	restrict
nondeceptive 	advertising, 	theretJy 	lessening 	co~petition ana
harming 	cons~~ers.
T:ace 	Na::Jes
The 	Boare 	of 	Optometry 	has 	proposed 	removing 	a 	complete 	tJan
on 	the 	~se 	of 	trade 	names 	(~es. 	II-D) 	and 	allo.... ing 	their 	use
- 	3 	-

ac~ually 	exa~ine 	patients, 	use 	of 	a 	uniform 	trade 	name 	for
mUlti?le 	branc~ offices 	is 	made 	more 	difficult.
~e 	unee~stand ane 	su?por: 	t~e 	Board's 	desire 	to 	precl~de L~e
use 	of 	dece?~:ve 	tra~e 	names. 	E~~ever, we 	would 	urge 	the 	Board
t~ 	evalua:e 	w~e:~e~ 	the~e 	is 	a~y 	evidence 	that 	the 	use 	of 	trade
names 	suc~ 	as 	·Optometric 	Offices 	of 	Smith 	and 	Jones,· 	or 	·Smith
O?tcme:ric 	Cli~i~~ 	are 	de~eptive when 	used 	for 	branch 	offices.
Especially 	where 	a 	number 	of 	branch 	offices 	are 	advertised 	under
such 	a 	trade 	name, 	it 	see~s 	doubtful 	that 	consumers 	would 	assume
that 	they 	would 	be 	examined 	~y 	one 	of 	the 	named 	doctors.
Proposed 	Sec:.ion '4.1i3.9., 	.... hich 	prohibits 	use 	of 	trade 	names
containing 	the 	nam~s 	of 	deceased 	or 	retired 	optometrists, 	also
raises 	so~e 	concerns 	~'~out whe:her 	such 	trade 	names 	are
inherently 	deceptive 	in 	every 	instance. 	provisio:l 	.... ould
mean 	that 	a 	trade 	name 	such 	as 	ftS~it~ Optometric 	Clinic ft 	.... ould
have 	to 	be 	changed 	upon 	the 	deat~ 	of 	Dr. 	Smith, 	thus 	preventing
the 	use 	over 	time 	of 	suc~ 	trace 	na~es, 	althous~ they 	may 	be
valuable 	to 	consumers 	because 	they 	have 	come 	to 	be 	associated
.... ith 	a 	certain 	level 	of 	~uality or 	price. 	Although 	we 	understand
the 	Boare's 	concern 	about 	possible 	deception, 	we 	would 	urge 	the
Board 	to 	evaluate 	whether 	there 	is 	any 	evidence 	that 	consumers
are 	actually 	deceived 	by 	su~h 	usase. 	La.... 	firms 	for 	years 	have
used 	trade 	names 	of 	this 	type, 	an~ 	.... e 	are 	una~are of 	any 	evidence
of 	resulting 	deception.
We 	recosnlze 	that 	the 	Board 	may 	~ish 	to 	ensure
icen:ification· and 	accountability 	of 	in=ividual 	prac:iticne~s
- 	5 	-

req~i:es 	cor.s?ic~o~s 	pos:ir.S 	in 	t~e 	reception 	area 	of 	the 	names
proposed 	regu:ations 	that 	appear 	to 	accomplish 	this 	end 	without
Bo~ever, 	the 	Board 	has 	already
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prac~icing 	under 	a 	trade 	name.
unduly 	restrict:n9 	nondeceptive 	advertisin;.
o~ 	all 	optometrists 	practicing 	at 	a 	location.
Section 	4.19.5.
Sections 	4.1B.7.
and 	8. 	res~i:e 	that 	the 	examining 	optometrist's 	name 	appear 	on
the 	pctie~t's records 	and 	on 	all 	invoices 	anc 	receipts.
Proposed 	Section 	4.19.2. 	prohibits 	optometrists 	from
practicing 	under 	more 	than 	one 	fictitious 	na~e. 	It 	is 	unclear
~hether 	this 	prohibits 	practicing 	under 	a 	nu~ber 	of 	trade 	names
at 	one 	time 	or 	curing 	a 	lifetime. 	If 	the 	fo:~er, 	this 	would
restrict 	optometrists 	from 	working 	part-time 	for 	more 	than 	one
group 	practice 	using 	a 	trade 	name. 	If 	the 	latter, 	it 	could
severely 	restrict 	the 	employment 	op~ions available 	to
optometrists 	and 	hinder 	the 	ability 	of 	large 	group 	practices 	to
recrui~ optometrists. 	We 	believe 	that 	it 	is 	preferable 	for 	the
Board 	to 	proceed 	on 	a 	case-by-case 	basis 	against 	optometrists 	who
use 	trade 	names 	in 	a 	deceptive 	manner 	rather 	than 	to 	issue 	a
bioad 	ban 	on 	practicing 	under 	more 	than 	one 	trade 	name.
Proposed 	Sections 	4.lA 	and 	4.13.3. 	requires 	all
advertisements 	using 	trade 	names 	to 	include 	the 	name 	of 	at 	least
one 	optometrist 	associated 	~ith 	the 	of:ice. 	W~ile 	this 	is
some~hat less 	0: 	a 	burden 	tha~ 	requiring 	such 	advertisements 	to
include 	the 	names 	of 	all 	t~e 	associated 	optGmetrists, 	it 	would
still 	incre=se 	the 	costs 	of 	advertisin; 	~ithout necessarily
p:ov:a:ng 	i~:or~a::on that 	would 	help 	consuwers 	because 	the 	r.cwe=
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optome~ris~ 	would 	not 	necessarily 	examine 	the 	consumer's 	eyes.
~his 	requirement 	would 	appear 	unnecessary 	since 	adequate
professional 	iden~i:ication will 	likely 	result 	when 	the 	consume:
c~l:s 	or 	visits 	the 	o::ice. 	F;;rther, 	the 	Board 	can 	respond 	i:
in~ividual complaints 	arise 	because 	it 	will 	have 	a 	record 	of 	a 1 1	......
tra=e 	na~es 	in 	use, 	along 	with 	the 	responsible 	optometrists.
(See 	Section 	4.19.1.)
Proposed 	Sec~ion 4.1S.4. 	prohibits 	trade 	names 	tha~ 	do 	not
include 	the 	words 	·optometry· 	or 	·vision· 	or 	reasonably
recogr.i:atle 	derivatives 	thereof. 	This 	would 	appear 	to 	preclude
the 	use 	of 	trade 	name~ 	such 	as 	·Southern 	Contact 	Lens 	Clinic" 	and
other 	nondeceptive 	trade 	~ames 	as 	well. 	Presumably, 	the 	intent
of 	this 	proposa~ 	l~ 	~o 	ensure 	that 	the 	trade 	name 	conveys 	the
fac~ 	that 	the 	fir~ 	is 	an 	optometric 	practice. 	Eowever, 	it 	is 	not
clear 	that 	this 	is 	necessary 	since 	most 	advertisements 	would
probatly 	convey 	this 	fact 	anyway. 	For 	example, 	this 	fact 	would
,liKely 	be 	conveyed 	through 	use 	of 	the 	word 	·optometrists· 	in 	t~e
t e x -: 	0 f 	-:h e 	ad.
Co~~erc:al Practice 	Restrictions
Lastly, 	we 	would 	urse 	the 	Soard 	of 	Optometry 	to 	reconsider
o~r 	previous 	co~~ents concernin; 	stat~tory restrictions 	on
business 	relationships 	between 	optometrists 	and 	non-optometrists
(Section 	54-388 	(A)(2)(i) 	and 	on 	employment 	by 	or 	location 	at
c8~~ercial establis~~ents (Sections 	54-388 	(A)(2)(k) 	and 	54-
3 ~ i . ~) 	(S e:l ';. e;.',:> e r 	1 9 84 	co :7'ul' e n t s, 	at 	P? 	3 - 4 )
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In 	our 	previous

.. 	.
comment-S"--we 	raised 	questions 	about 	the 	potential 	harm 	.. hicn 	could
result 	fro~ 	such 	restrictions 	and 	discussed 	evidence 	that
·co~~ercial practice- 	such 	as 	chain 	firms 	may 	benefit 	consu~e:s
by 	lowering 	pri~es 	without 	decreasing 	the 	quality 	of 	service.
Our 	comments 	also 	noted 	that 	several 	of 	the 	st~tutory provisions
governing 	prepGi~ dental 	plans 	(Virginia 	Code 	Section 	38.1-892 	et
seq.) 	appear 	to 	be 	unnecessarily 	restrictive 	or 	have
anticompeti:ive 	ef:ects 	which 	may 	outweigh 	any 	countervailir.g
benefits 	to 	the 	public. 	In 	its 	report, 	the 	Board 	of 	Optometry
neither 	addressee 	our 	concerns 	nor 	reco~~ende= any 	statutory
changes. 	We 	urge 	the 	Boare 	to 	reconsider 	our 	previous 	comments.
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In 	our 	prior 	co~~en:s3 regarding 	~~e 	Board 	of 	Dentistry 	~e
disc~ssed a 	nu~~er 	0: 	s:a:~tory 	a~d 	res~~~:ory 	provisions 	t~at
appeared 	to 	?rc~i~:: noncece~:ive adver:isin; 	or 	place
unnecessary 	burdens 	en 	suc~ 	advertising. 	T~e 	Board 	has 	proposed
removing 	some 	0: 	the~e 	reg~~ations 	but 	has 	proposed 	several 	ne~
regulations 	t~a: 	also 	aFpear 	to 	go 	beyond 	prohibiting 	false 	and
deceptive 	advertising. 	Our 	previous 	co~en:s also 	discussed 	the
potential 	har~ 	to 	consumers 	that 	could 	result 	from 	several
statutory 	restrictions 	on 	cor.~ercial practices, 	including 	a 	ban
on 	trace 	n2.:7le 	usage. ' 	T~e 	Board did 	not 	recom.:uend 	changes 	to 	any
0: 	these 	statutory 	provisions.
Acver:'isina
We 	turn 	:irst 	to 	t~e 	areas 	covered 	by 	e~= 	previous 	co~~en:'s
regarding 	sever~l advertising 	provisions 	(A~;~5t 1984 	co~~ents,
at 	?p. 	2-4). 	Our 	previous 	co~ents stated 	t~a: Virginia 	Code
~ction 	54-187(7), 	~~i:~ 	bans 	advertising 	cla::7ls 	of 	superiority,
appears 	to 	prohi~i:' at 	least 	some 	noncecept:ve 	advertising. 	Our
co~~ents also 	stated 	that 	portions 	of 	Section 	7.A.4. 	0: 	the
Board's 	regulation, 	prohibiting 	advertis:r.g 	0: 	statistical 	da:.a,
in:or~ation on 	~ast 	p:r:ormance, 	re?resenta:io~s 0: 	quality 	and
3 	Letter 	to 	Ric~ard Morrison, 	DeDart:7lent 	0: 	Eea1th 	Rec~latorv
Boards 	from 	Carol 	T. 	Cra~ford, Director, 	B~recu of 	Consumer 	~
Protection 	(Augus: 	21, 	1984) 	(hereinaf:er 	sc~e:imes re:erred 	to
as::; e 	.. Aug u st. 1 9 54 	co :7"w'7. e n t s .. ) .
- 	9 	-

shovrnanship 	or 	pu~!ery, 	appear 	to 	prohibit 	nondeceptive
governing 	advertisin~ 0: 	s?ecial~ies, 	could 	be 	interprete~ to
I
I
I
! adve:~:sing. 	We 	a:so 	expressed 	concern 	tha~ 	Section 	7.A.2.d.,
prohi~i: nondeceF~ive acvertising. 	~he 	Board 	suppor~s 	the
eli~ina~ion 0: 	all 	these 	restrictions.
proposed 	changes 	will 	bene!i: 	consumers.
We 	believe 	~hat 	these
However, 	some 	of 	the
remaining 	provisions 	as 	well 	as 	some 	of 	the 	new 	proposed
revisions 	appear 	to 	go 	beyond 	wha~ 	is 	necessary 	to 	prevent
cece?~ion.
Previously 	we 	stated 	that 	Section 	7.A.2.f., 	which 	requires
disclosure 	of 	the 	original 	price 	whenever 	a 	discount 	is
advertised, 	would 	likely 	prevent' 	the 	dissemination 	of 	useful 	and
nondece?:ive 	price 	inforrr.a:ion. 	For 	example, 	this 	provision
would 	prohi~it aes 	s~atin9 	-10% 	off 	for 	senior 	citizens" 	or 	-SlO
off 	for 	all 	new 	patients.- 	Further, 	since 	it 	could 	be 	very
cos~ly 	to 	state 	in 	an 	acvertisement 	the 	regular 	price 	of 	each 	of
the 	hundrecs 	of 	services 	a 	dentis~ 	provides, 	this 	rule 	will
"likely 	decrease 	the 	anount 	of 	discount 	price 	adver~ising that
The 	Beare 	has 	now 	reco~~ended 	that 	the 	requirements 	of
J
Section 	7.4.2.£. 	be 	incorpor:ted 	into 	proposed 	Section 	4.6C., 	and
we 	ur;e 	the 	Board 	to 	reconsider 	our 	previous 	co~~ents on 	this
point 	and 	consider 	eliminating 	this 	requirement.
?roposec 	Section 	4.63.2. 	states 	that 	an 	advertisement 	of 	a
fee 	a 	dental 	service 	must 	state 	the 	period 	of 	time 	fc~ 	.hict
the 	fee 	shall 	be 	in 	effect 	~nless 	the 	fee 	is 	in 	effect 	for 	at
least 	90 	days. 	In 	evalua~ing whe~her 	an 	ad 	without 	such 	a
- 	10 	-

I
~
!
I disclosure 	is 	misleacing 	it 	is 	important 	to 	consider 	normal
consumer 	expectations 	about 	t~e 	~!!ective dates 	of 	advertised
prices. 	~e 	sU9;es~ 	that 	the 	Boar: 	evaluate 	~het~er 	consumers
expect 	advertised 	prices 	to 	be 	e!~ective 	for 	at 	least 	90 	days,
t~e 	ad 	uses 	ter~s 	such 	as 	·special 	offer,· 	or	especially 	if
/
-introductory 	offer.- 	Any 	disclosure 	requirement 	ades 	to 	the
cost 	of 	advertising 	anc, 	ye 	believe, 	should 	be 	imposed 	only 	~here
necessa~y to 	prevent 	deception.
Proposed 	Section 	4.6E. 	li~its 	fee 	advertising 	to 	certain
listed 	and 	defined 	routine 	dental 	services. 	This 	provision 	~oul=
a~?aren:ly prohi~i: 	the 	advertising 	of 	fee 	information 	for 	non-
routine 	services, 	for 	example, 	ne~ 	or 	innovative
tec~niques that 	are 	not 	yet 	widely 	used 	by 	practitioners. 	It
,
also 	may 	be 	interpreted 	to 	prohibit 	any 	advertisements 	~hat 	co
not 	state 	specific 	prices 	but 	rather 	use 	ter~s 	such 	as 	~discoun:
pric~s" 	or 	·lo~ 	cost" 	to 	attract 	consumer 	attention 	and
cowrnu~i:a~e a 	message 	ef:ec~ivelv. 	Such 	advertising 	is 	not
The 	proposed 	rule 	also 	appears 	to 	rec~ire
adyertisers 	to 	use 	terminology 	that 	may 	be 	confusing 	and 	not
J
easily 	understood 	by 	consumers. 	For 	example, 	it 	see~s 	to 	re~uire
advertisers 	to 	use 	only 	the 	specific 	ter~inology listed 	in 	the
regulations, 	such 	as 	·prophylaxis" 	to 	describe 	cleaning 	of
teeth. 	It 	also 	see~s 	to 	require 	that 	-examination,· 	·diasnosis,·
and 	·t=ea~~ent ?lar.~i~g" be 	advertised 	separately, 	although
diagnosis 	and 	treat~e~t p~2~~in; are 	o:ten 	considered 	to 	be 	par:
of 	a 	rou:ine 	dental 	exa~ir.ation and 	consu~ers ffiay 	not 	understanc
the 	cis:ir.c:io~ bet~een 	these 	ter~s.
- 	11 	-
Such 	re=~i:emer.ts lim:: 	the

'- .
ability 	of 	advertisers 	to 	convey 	their 	message 	as 	effectively 	as
possible 	an= 	thus 	may 	have 	a 	chilling 	effect 	upon 	valuable
advertising. 	T~e 	requirement 	also 	appears 	to 	impose 	additional
b~rde;.s on 	advertisers 	that 	are 	not 	imposed 	on 	other 	dentists.
for 	exa~?le, 	if 	a 	de~tist 	advertises 	-treatment 	planning,· 	he 	or
she 	m~st 	give 	the 	patie~t a 	~ritten 	itemized 	treatment
recorr~endation and 	a 	~ritten 	itemized 	fee 	statement. 	Those
requirements 	are 	not 	imposed 	en 	nonadvertisin; 	dentists.
In 	our 	vie~, 	proposed 	Section 	4.6E. 	is 	not 	necessary 	to
prevent 	deceptive 	advertisi~;. 	While 	~e 	recognize 	that 	problems
~ay 	occur, 	~e 	sussest 	that 	the 	Board 	respond 	to 	these 	proble~s on
a 	case-by-case 	basis, 	see~ing 	to 	remove 	advertising 	that 	is
actually 	deceptive, 	rather 	than 	through 	broad 	rules 	that 	~ou~_
likely 	preclude 	the 	dissemination 	of 	valuable 	nondeceptive
i~.for;i1a:ion. 	Thus, 	~e 	urge 	t~e 	Board 	to 	reccnsider 	the 	necessity
of 	prcposed 	Section 	4.6~.
!n 	our 	previous 	comments 	~e 	also 	discussed 	the 	statutory
prohibition 	on 	trade 	name 	usage 	by 	dentists 	(Virginia 	Code
Section 	5~-184) 	and 	pointed 	out 	that 	trade 	na~es 	can 	be 	essential
to 	the 	establishment 	of 	large 	group 	practices 	and 	chain
operations 	that 	can 	offe": 	lower 	prices 	(August 	1984 	com;nents, 	at
5-7). 	While 	the 	Board 	of 	Dentistry
- 	12 	-

~e 	unders~and 	that 	it 	no~ 	reco~~encs no 	changes 	to 	the 	current
reconsider 	our 	previo~s co~~ents.
series 	of 	regulations 	that 	vould 	permit 	some 	trace 	name 	usage,~
I
Iii
la~ 	banning 	trade 	name 	usage. 	We 	~ould 	urge 	the 	Board 	to
I
Co~~ercial 	?rac~:ce
Our 	previous 	co~~ents also 	addressed 	several 	statutory
restrictions 	on 	co~~ercial 	practice, 	including 	a 	ban 	on
employment, 	partnership, 	and 	other 	business 	relationships 	bet~ee;,
dentists 	and 	other 	persons 	(Virginia 	Code 	Section 	54-146, 	Secticn
54-183), 	and 	a 	ban 	on, 	leasing 	space 	from 	co~~ercial
establishments 	(Virginia 	Coce 	Section 	54-247.1). 	w~ 	raised 	the
question 	~hether 	such 	restrictions 	may 	har~ 	consu~er~' 	;~d
presented 	evidence 	that 	the 	presence 	of 	co~ercial practitioners
suc~ 	as 	chain 	fir~s may 	lo~er 	prices 	~ithout decreasing 	the
quality 	of 	care 	(August 	190~ 	co~~ents, 	at 	pp. 	4-7). 	Our 	co~~ents
also 	noted 	t~at 	several 	of 	the 	statutory 	provisions 	governins
prepaid 	dental 	plans 	(Virginia 	Coce 	Section 	38.1-892 	et 	seq.)
~ppear 	to 	be 	unnecessarily 	restrictive 	or 	have 	anticoffipetitive
effects 	~hich ~ay 	outweigh 	any 	countervailing 	benefits 	to 	the
public. 	The 	Board 	of 	Dentistry 	did 	not 	address 	these 	concerns 	i~
4 Those 	revisions, 	while 	allo~ing certain 	for~s 	of 	trade 	na~e
usage, 	still 	appeared 	to 	restrict 	unnecessarily 	the 	use 	of 	trade
names. 	See 	our 	co~~ents relating 	to 	several 	similar 	pro~isior.s
proposed 	by 	t~e 	Board 	of 	Optometry 	on 	pp. 	3-7, 	suora. 	The 	B02:=
also 	no~ed 	th2~ 	a 	statutory 	change 	may 	~e 	necessary 	to 	2:10-
trace 	name 	usage. 	Presumably, 	this 	reco~~encation also 	has 	bee~
~i~hc=a~~.
- 	13 	-

~. .
i~s 	Re?cr~ 	and 	cid 	not 	p~c?cse changes 	to 	these 	statutory
p:ovis:o~s. 	~e 	wou:d 	u:;e 	t~e 	Boar~ 	to 	reconsider 	our 	previo~s
co~en~s.
- 	14 	-

-..
Our 	previous 	corr~e~:s5 resarjing 	the 	Board 	of 	Ve~erinary
~ecicine disc~sse~ 	t~e 	potentially 	ha:~!ul 	e::ects 	of 	Boar: 	rules
prohi~iting veterinarians 	frc~ 	utilizing 	the 	services 	of
solicitors 	(Rule 	15(!)), 	making 	claims 	of 	superiority 	(Rule
15(J)), 	entering 	into 	business 	relationships 	with 	non-
veterinarians 	(Rule 	15(3)), 	and 	leasing 	space 	from 	corr~ercial
establishments 	(Rule 	15(C)). 	We 	support 	the 	Board's 	decision 	to
propose 	the 	elimination 	of 	all 	of 	these 	rules. 	~e 	believe 	that
t~e~e 	changes 	may 	well 	benefit 	consumers 	by 	increasing
competition 	and 	lowering 	~osts~ithout decreasing 	quality.
Co~~ercial ?rac:ice
The 	Board 	of 	Veterinary 	Medicine 	has 	prc~osec 	a 	new
regulation 	(Section 	2.3.3.) 	that 	would 	make 	it 	unprofessional
concuct 	for 	a 	veterinarian 	to 	practice 	veterinary 	medicine 	~& 	a
non-veterinarian 	has 	the 	right 	to 	control 	the 	professional
juds~ent of 	the 	veterinarian.
purpose 	of 	the 	current 	ban 	on
According
co IT'w":l e r cia 1
to 	the 	Boar:::,
practice 	is 	to 	ensure
that 	the 	professional 	judgment 	of 	a 	veterinarian 	is 	not
compro~isec by 	so~eone who 	is 	not 	a 	veterinarian. 	!>-.s 	state:, 	the
5
purpose 	0: 	the 	proposed 	chan~es 	is 	to 	deal 	directly 	with 	this
Letter 	to 	Richar::: 	Morrisoi., 	De?art~ent of 	Seal:h 	Regulatory
30ards 	from 	Carol 	T. 	Cra~forc, 	Director 	of 	Ccnsu~er ?rotect:on
(Se?te~~er 14-, 	1964) 	(hereina~:er sometimes 	:e!erred 	to 	as 	:~e
"Se?:.e:7',::'e: 	1984 	CO:7U7ients·). '
- 	15 	-

~ ".
.. " .
problem 	yi~~out 	intruding 	upon 	business 	rela~ionships ·so 	long 	as
veterinary 	medicine 	is 	practiced 	safely 	and 	yell.- 	(Bd. 	of
Veterinary 	Medicine, 	Regulatory 	Reviey 	Report, 	p. 	9.)
While 	ye 	recognize 	that 	the 	Board 	may 	consider 	proposed
Section 	2.3.3. 	necessary 	to 	protect 	consumers, 	ye 	believe 	that 	a
slightly 	modified 	version 	of 	this 	provision 	~ay 	achieve 	the
Boar~'s gea~s 	witho:;: 	~nnecessarily interfering 	with 	business
relationships 	between 	veterinarians 	and 	non-veterinarians. 	As
currently 	drafted, 	Section 	2.3.B. 	might 	be 	interpreted 	to 	prevent
veterinarians 	fro~ working 	fer 	lay 	employers 	since 	all 	employers
exercise 	control 	over 	the 	work-related 	activities 	of 	their
employees. 	The 	Boare 	may· be 	a!::>le 	to 	accom?lish 	its 	express
p:;rpc.s 	of 	?rohibiting 	only 	those 	controls 	that 	corn?romise 	the
professional 	judgment 	of 	veterinarians 	by 	recommending 	a 	narrower
rule 	that 	wo~ld 	restrict 	veterinarians 	from 	working 	for 	non-
veterinarians 	where 	the 	nen-veterinarian 	seeks 	to 	co~?romise the
veterinarian's 	professional 	judg~ent 	in 	ways 	that 	might 	lower 	the
q~ality 0: 	care 	rendered 	by 	the 	veterinarian.
C~~onents of 	co~~ercial practice 	often 	argue 	that 	lay
em?loyers 	will 	co~?ro~ise the 	quality 	of 	care 	in 	an 	effort 	to
increase 	?rcfits. 	However, 	it 	is 	also 	possi!::>le 	that 	they 	will
atte~?: 	to 	ensure 	high 	q:;ality 	in 	an 	e:for~ 	to 	esta!::>lish 	a 	good
reputation, 	the:e!::>y 	increasing 	Fatronage 	ana 	profits 	in 	t~e 	Ions
r:;;). 	o~: 	st~cy 	resar::~; t~e 	s~ality of 	cosmetic 	contact 	lens
- 	16 	-

, "
!i~~inss 	by 	o?~omet:ists,6 cis=ussed 	more 	fully 	in 	our 	previous
co~~ents 	(Se?te~ber 1984 	corr~ents, 	at 	p. 	6), 	tends 	to 	support 	t~e
l~~~e: 	ar9ume~~ since 	it 	sho~s 	that 	the 	quality 	of 	co~~ercial
op~oroetrists' ccs~e~i= con~a~t 	lens 	fit~inss are 	at 	least 	as 	good
as 	those 	of 	nonco~~e:cial optoroe~rists and 	ophthalmologists.
We 	applaud 	the 	Board's 	positive 	response 	to 	our 	previous
concerns. 	we 	urge 	the 	Board 	to 	review 	these 	additional 	cOm~ents
and 	consider 	whether 	a 	narro~er 	rule 	might 	not 	better 	accomplish
its 	stated 	goal 	0: 	not 	intruding 	on 	business 	relationships 	so
long 	as 	veterir.~ry medicine 	is 	practiced 	safely 	and 	~ell.
6 	Bureaus 	of 	Consu~~r Protection 	and 	Economics, 	Federal 	Trade
Co~~ission, A COffip2rative 	Analysis 	0: 	Cosmetic 	CO~t2ct Lens
F~::ing 	~y 	O?h.:~a:~olog~sts, C?~ome:rists, and 	O?~i:ians 	('1963)
- 	17 	-

In 	our 	previous 	co~~en~s7 ~e 	discussed 	t~ree 	statutory
provisions 	t~a~ 	may 	ha:~ 	cons~mers. 	~e 	noteo 	that 	Virginia 	Code
Section 	54-317(3), 	~hi:~ 	bans 	adver~ising claims 	of 	superiority
by 	physicians, 	~ou1c 	appear 	to 	prohi~it at 	least 	some
nonceceptive 	advertising 	(August 	1984 	comments, 	at 	p. 	2). 	~e
also 	discussed 	in 	detail 	t~o 	provisions 	of 	the 	Virginia 	Coce,
Section 	54-278.1, 	prohi~iting physicians 	from 	leasing 	from
commercial 	establish~ents, and 	Section 	54-317, 	~hic~ 	may 	be
interpreted 	to 	prohibit 	trade 	name 	usage 	(Ausust 	1984 	corr~ents,
at 	p? 	4-7). 	Both 	of ,these 	provisions 	may 	har~ 	consumers 	by
hindering 	competition 	from 	hi9~-volu~e, lo~er-priced practices.
In 	Board 	noted 	that 	our 	reco~~en=ations relating
to 	advertising 	~ill 	be 	taken 	under 	advisement. 	We 	appreciate
this 	consideration 	of 	our 	comments. 	Eo~ever, 	the 	30ard 	did 	not
7
:ecc~~end 	any 	stat~tory revisions 	an~ 	~e 	~cul= 	urge 	the 	30a:d 	to
reconsider 	cur 	previous 	comments 	regarding 	these 	provisions.
Letter 	to 	Richard 	Morr 	son, 	De?art~ent of 	Eealth 	Regulat~ry
coares 	from 	Carol 	T. 	C:a~ orc, 	Direc~or, 	3ureau 	of 	Consumer
Protection 	(August 	21, 	1954) 	(hereina::er 	so~etimes referred 	:0
2S 	the 	"hugust 	1964 	corr~ents.")
8 Board 	0: 	Medicine, 	Su~~ary of 	Regula:ions, 	p. 	6.
- 	18 	-