view from the top
Gravity, Death and Taxes
There are some things in life you can't
change. So focus on those you can.
Gary Gerber, O.D.
I continually hear loud moaning and complaining
from O.D.s across the country and their grumblings know no consistent geographic
region or demographic description. North or South, young or old -- I constantly
hear, "There are too many doctors." "Patients don't take any
responsibility any more." "Managed care, the Internet . . . ."
And on it goes.
Like death, taxes and gravity, other natural
constants are at work in our practices. For example, I continually see the work
of Vilfredo Pareto (the Italian economist whose work spawned the 80-20
Principle) in every optometry office I visit. I often wonder if the negativity I
see isn't self inflicted -- at least partially -- because of a lack awareness of
Pareto's 80-20 rule.
Here are some common 80-20 examples and how they
affect your practices.
The root of referrals
Eighty percent of your referrals come from 20% of
your patient base, yet our consultants still continually see doctors in denial
trying feverishly to enhance their base of referrals. It's uncanny and downright
spooky that time and again we've seen this 80-20 rule occur in every practice in
which we've worked. You can't beat it, so don't try. Instead of pouring your
marketing dollars down the drain, pick another battle that you have a chance of
Who's not paying their bills?
Eighty percent of your accounts receivables come
from 20% of your patients. This is another one of my favorite "laws"
that's fun to watch practitioners attempt to defy. The truth is, most of your
patients and their insurance companies do pay their bills. If they didn't, then
you'd be out of business.
Yet many of us still set severe collection
guidelines that affect our entire practice based on the 20% who owe us money. If
you're not consciously aware of this, you can't be faulted for taking a jaded
posture of, "My patients are deadbeats who don't pay their bills! No wonder
I hate being an O.D.!"
Targeting the gripers
While our consulting company hasn't (yet) been
able to conclusively quantify that 80% of patient complaints and headaches come
from 20% of patients, I think you'd readily agree that it's certainly true. And
as above, not recognizing that we're powerless to change this, we can easily
fall prey to feelings of frustration from these chronic complainers.
Described by another economist as "the vital
few and the trivial many," we can use Pareto's Principle as a
straightforward learning tool. Too many of us are guilty of not seeing the
"vital few" and instead focusing on the "trivial many."
Besieged with constantly changing governmental and insurance industry
regulations, we fall into a defensive posture to protect our practices and our
livelihoods. And we do it by setting up policies based on the actions of the
trivial many that undoubtedly affect the vital few.
Who are these vital few? As true as are the other
80-20 rules, so too is it a constant of optometric business life that 80% of our
practice's net comes from 20% of our patients.
When I've presented that last comment in
lectures, I hear most doctors say, "Maybe in your clients' practices, but
not in mine!" "Oh no, Gary. In this case, Pareto was wrong! Eighty
percent of my net comes from 80% of my patients! And that's why I have
instituted the various guidelines and procedures in my office!"
Don't sweat the small stuff
Pull some charts and do some investigating of
your own. What goes up must come down (gravity). Death and taxes are just as
certain. And Pareto was right. Use his concepts to help you glide through your
day and focus your energy where it's most productive: On the vital few.
Dr. Gerber is the president of the Power
Practice, a company specializing in making optometrists more profitable.
Learn more at www.powerpractice.com
or call Dr. Gerber at (800) 867-9303.
Optometric Management, Issue: November 2004