consultants
What Consultants Can Do for You
If you've reached a crossroad in the management of your practice, then it's time to consider . . .
BY MICHAEL LEAR-OLIMPI, Contributing Editor

Bethany and Jonathan Fishbein, both O.D.s, decided they wanted their own practice, but were concerned that they lacked some required business knowledge. After examining the options, they hired a consultant.

"We could have figured things out on our own, but it was important to have someone who knew what he was doing to keep us from making mistakes," says Dr. Bethany Fishbein of Somerset Eye Care in Somerset, N.J.

For many, the rationale for developing a relationship with a consultant is a simple one. "We are not experts in practice management," says Richard Kimmich, O.D., who has practiced for 23 years and is currently owner of the Five Points Eye Care Center in Athens, Ga. "We are more concerned with providing a quality service for our patients than we are in being good businessmen."

Time for help

Today, optometrists need both patient care and business skills. When business issues become overwhelming, it may be time to seek outside help. "Typically, a doctor brings in a consultant when he has problems in a specific area that he hasn't been able to resolve himself," explains Marilee Blackwell, M.B.A., a senior consultant with Hayes Consulting in Ponte Vedra, Fla. "For example, if a doctor regularly nets 35% or less, then he should consider hiring a consultant. "

"We've found that most practitioners are ready for a consulting program at a very specific time," says Thomas L. Bowen, vice president with Williams Consulting Group, Lincoln, Neb. "Typically, that time is when they've evolved the practice to such a level that it has literally outgrown the business within which it lives." Mr. Bowen says that a consultant can take the practice to the next level -- that is, "significant growth in revenues and profits and a better quality of life owning, operating and working in the practice."

Select the right consultant

Doctors typically find consultants at conferences, through journal ads and articles and by referrals. Optometrists should not be shy when contacting experts. They should ask for information specific to their problem. And they should always ask for references.

"Prospective clients need to check references," advises Gary Gerber, O.D., president of The Power Practice in Hawthorne, N.J. "Find out actual results post-consultant. Call a lot of references and make an informed decision. If your consultant pressures you to sign, then run."

From the beginning, both the consultant and the optometrist should agree on suspected needs and expected results. Says Richard S. Kattouf, O.D., president of Optometric Services (for O.D.s) and The Management Masters (for M.D.s) in Warren, Ohio, "Clients can expect the results that we project for them when we analyze their consulting needs. We send the client a detailed report spelling out the plan for the consulting program."

Popular services

Consulting services vary widely in their offerings, but the more popular services include the following:

• Identifying and correcting cash-flow problems
• Implementing business plans that lead to greater profit
• Partnership and associate agreements
• Creating compensation plans
• Appraising practices
• Streamlining workflow
• Managing overhead
• Boosting staff efficiency and morale
• Billing and coding.

Consultants report that a one-solution-fits-all approach doesn't work in optometry. For example, a new practice might require a market analysis, while a doctor in a well-established practice might want guidance on cutting his overhead.

"That's our strength," says Jerry Hayes, O.D., director of Hayes Consulting. "Revenues don't tell the whole story. We focus on a doctor's overhead and cash flow, staff, cost of goods, occupancy costs, marketing, equipment, general office expenses and practices."

Consultants might also address intangibles such as staff morale and organization skills.

At Five Points Eye Care, Dr. Kimmich sought help from Optometric Services to correct staff problems, increase net revenue and possibly sell a practice. The experience was rewarding, says Dr. Kimmich.

"No part of our practice was untouched," he says. "We changed our methods of receiving payments, the patient flow, the scheduling, the billing, the optical dispensary and the wording we used. We also changed our vision therapy billing and recognized the enormous potential of orthokeratology."

The results? Patient-flow efficiency improved, procedure fees equalized, the optical department prescribed multiple prescriptions confidently and efficiently and "the beginning of orthokeratology brought an exciting aspect to Five Points Eye Care Center," Dr. Kimmich says.

The information you'll need

Before a consultant can offer solutions, he needs access to information -- everything from financial data from the past several years to purchasing records and recall systems. The consultant will also need freedom, such as to garner employees' attitudes in interviews.

The information gathering isn't always limited to in-office systems, as the Fishbeins discovered when they hired The Power Practice. "Gary (Dr. Gerber) was specific with information he wanted from us," Dr. Bethany Fishbein states. "When we were deciding on a location for our office, he said, 'Okay, go out and get me the demographic information from your area.' And we did. He helped set up spreadsheets to track our progress. We e-mail them back and forth every month so he can continually monitor our progress."

Just as O.D.s gather information to choose consultants, consultants also select doctors. "We qualify the client in terms of whether there's an issue that we can address successfully," Dr. Hayes explains. "We're careful only to take clients who we can make happy. We offer a guarantee on our services that the client will realize a 300% return on investment in the first year of the plan."

The consultation

The process of consulting takes various forms from face-to-face meetings to phone calls to e-mails. Bowen said Williams' consultants work with a combination of on-site visits and training sessions at the firm's headquarters. During a typical two- to three-day practice visit, Williams' experts interview staff and consult with practice owners on ownership and other management topics not suited for group discussion.

A consulting project -- including follow up -- might last from two months to a couple of years, though most consultants have a plan in place within six months, often sooner.

Brian Oswald, O.D., of Absolute Vision Care, with locations in Mokena and Crestwood, Ill., says his practice worked with Hayes Consulting for a total of nine months, yet the consultant identified savings within the first three months.

The consultant addressed a number of areas including employee hours, productivity, expenses, frame inventory and raising fees.

The result? "We saved about $80,000 last year from the increase in profitability because of Hayes," says Dr. Oswald.

Demystifying costs

Fee structures vary among consultants. Some charge each client a standard fee, while others charge based on a menu of services. Optometrists can expect to pay more for on-site visits that for phone or e-mail consultations.

Dr. Hayes says he charges $3,500 for a process that includes profitability analysis; a 50-page, custom-written report; practice analysis; a budget; and a business plan.

"Our fees are no secret," Dr. Gerber says. "Our yearly plan is currently $432 each month for 60 months, or $22,000 if the doctors pay up front."

Dr. Kattouf's fee structure includes a $500 retainer once consulting dates are set. On-site consultations with support don't exceed $18,000 and could be less, depending on time spent. A plan for consulting that examines segments of a practice could cost as little as $3,000, he says.

Start-up consultations can range up to $11,500 and can be segmented for as low as $3,000. Appraisals begin at $1,250 (the same as for negotiating buy-sell agreements) and vary depending on practice size and time required to complete a project. Merger consulting is based on estimated project time. In addition, the client pays expenses.

The payback

Although the fees appeared high at first, Dr. Bethany Fishbein says, "in retrospect, we'd pay double."

Dr. Kattouf says that clients reap a ten-fold minimum return on their investment, and sometimes much more.

Dr. Oswald casts his results in black-and-white terms, asking, "How can one not spend $3,500 for a return of $80,000 ­ not only last year, but year after year?" 

Michael Lear-Olimpi is a Philadelphia journalist who specializes in healthcare and business topics.