As a practice grows there should be a transition from the doctor doing most everything himself (herself) to a point where he does only high level tasks and most other tasks are delegated or hired out. I think both phases are necessary if the goal is to grow a small practice into a large one.
This is typically a gradual process as the staff is increased and more duties are delegated, but many doctors seem to get stuck performing certain tasks. The process becomes the norm and they can never move beyond it. These sticking points cause the practice to stop growing and it develops a great dependency on the doctor.
Let's look at some typical tasks that can become sticking points in the transition from one practice phase to another.
The necessity phase
I call the early phase of practice development the necessity phase. In smaller practices (started from scratch or purchased) it would be wasteful to have a large staff. It would make no sense to rent or own a large office facility. Advanced automated instrumentation is an expensive luxury. In my view, keeping expenses in line with the small patient volume is the right approach.
In the necessity phase, it makes sense for the doctor to:
- Perform most exam procedures without much assistance.
- Conduct any special testing, like visual fields.
- Do some eyeglass and contact lens dispensing in the very early periods.
Additionally, there are many behind the scenes activities that doctors do in this phase, such as:
- Place orders for glasses and contact lenses.
- Verification of glasses and contact orders when returned from the lab.
- Bookkeeping, bank deposits, accounts receivable and accounts payable.
- Insurance billing and reconciliation.
- Staff recruitment and training.
- Managing staff, tracking paid time off, keeping employee records.
- Office and equipment maintenance.
- Computer networking and hardware and software installation.
- Answering the phone when no staff is available.
I admire doctors who simply work hard and do what it takes in this phase. Some of the jobs may be a little tough on one's ego, but these doctors have character and they don't worry about it. They are not too good to do the menial tasks.
The goal is to move past the necessity phase as soon as possible or to at least present the appearance of being past it.
The high level phase
Most optometric practices never reach the high level phase, but we all know what it entails. It is a practice that delegates all of the tasks listed in the necessity phase above. The high level phase offers great efficiency and profitability, so it is certainly a good goal to work toward. The doctor's time is so valuable in this phase that it makes good economic sense to have him or her only perform high level tasks. The tasks are both clinical and managerial, but they are always at a high level.
- Ocular health exams and judgments
- Determination of assessment and treatment plan
- Patient communication and education about the plan
- Practice leadership
- Executive decisions about practice operations
- Supervision of finances
- Practice investments
The high level phase is really a more pleasurable way to work because the doctor does not perform many tasks that could be a bit boring. This phase is definitely more profitable because multiple people are working at their highest level of production.
Many phases in between
Obviously, there are many small phases that occur between the necessity and the high level phase. The in-between phases are dangerous because it is easy to get stuck in them.
- Doctors become accustomed to doing the task and once it becomes routine, they don't think about it anymore.
- Some jobs may seem like they are too personal or too difficult for anyone else to do.
- It may seem too risky to hire more people or trust more people to do these jobs.
I think it's important to push through these tendencies and challenge our thinking. With a little creativity and some experimentation, it is quite possible to delegate more tasks than you might think.
Why some practices go bankrupt
Some practices try to grow too quickly and start out with the goal of entering the high level phase right away, or close to it. The problem is that the small volume of patients is not enough to support the higher level of expenses. Some of these practices are started with a great amount of funding with the hope that the business will be prepared, but the high debt service factored in with the expenses of a large office and many employees are too much to handle.
I think it is best to be well funded but still keep expenses down in the beginning. I also recommend the doctor have another source of income from another job. If the practice grows quickly, it can move into the high level phases, but it is impossible to go the other way.
Practice inertia refers to the tendency for a practice to continue doing what it has done in the past. The larger the practice and the older the practice, the more inertia there is and it can be very hard to overcome. In many ways, practice inertia is your enemy because it is a force that blocks change and progress. Eventually, all firms stagnate and decline if they don't change in positive ways. Innovate or die!
I wrote last week about the importance of the entrepreneurial spirit and having a clear, detailed vision of what the practice will look like when it becomes successful. Many practice owners begin without that vision. They think they will just adapt and figure it out as they go along. The problem with that approach is that it is the vision which often drives you to move to the next phase.
Push yourself to move to the next phase in your practice before you have to. Act as you mean to go. You want to build a system that does not depend on the doctor.