Article Date: 2/1/2001

BUSINESS ADVISOR
Benchmark Your Practice

Evaluating where your practice is now could help you discover where you should be headed in the future.
By Jerry Hayes, O.D.

Some O.D.s are offended when I say this in lectures: There's not much separating an optometric practice from a small business. The bottom line is that each owner needs to do the following:

 

The business behind the success

However, there's something important that separates an optometrist from a merchant on the street.

As licensed health professionals, we're always expected to act in the best interest of patients' welfare, regardless of how that affects our pocketbooks. And it's my experience that most optometrists are pretty good at upholding that public trust.

The most successful O.D.s quickly figure out that they must either hire someone to run the business side of their practices for them, or set aside a certain amount of time themselves to learn and manage this side. Unfortunately, the majority of optometrists don't take either step, and their practices consequently suffer.

Probably the most neglected area, and possibly the most important next to patient care, is the financial side of your practice. While the typical chief executive officer of a business eats, sleeps and breathes the numbers of his business, many optometrists aren't on top of even the basic numbers of their practice.

How do you stack up?

To help you address this problem, Optometric Management is sponsoring a new benchmarking service for independent O.D.s called the Hayes Practice Index (HPI). The goal of the HPI is twofold. We want to provide you with the financial tools you need to monitor the key financial barometers of your practice and show you how your practice compares to other similar-size practices in these areas.

You have many financial factors to consider in your practice, so we've tried to distill the "must-know" numbers to a manageable amount. Stay on top of these, and you should be in great financial shape.

The types of things we'll collect data on include:

We'll compile this information and present it to you in written form with tables and graphs on a quarterly basis. While the financial data for your practice will remain confidential, each report will include an apples-to-apples comparison of your practice to the average of all the other practices in your gross income size group.

Why go to the trouble? I'm willing to bet that your practice does pretty well. At least well enough that you have money at the end of every month to pay all your bills and have a reasonable amount left over for yourself. What else do you need to know? Fellow consultant Jerry Legerton, O.D., M.B.A., sums it up quite well. He says, "Measurement is the beginning point for positive change."

Positive change

Optometry is a profession. The main reason we're here is to serve the visual welfare of our patients. My practice wasn't a lot of fun when I was struggling to pay my bills each month, but the better I became at monitoring the performance of my practice, the better I did financially. And the closer I came to financial success and security, the more I enjoyed my practice and the better job I did serving those patients. Optometry may not be a business, but as every practice owner knows, it sure has a business side to it.

For more information on the HPI, see the "What's New" . 

Dr. Hayes is director of the Center for Practice Excellence. You can direct practice finance questions to him by fax at (904) 273-1224, or by e-mail at askjerry@e-dr.com.



Optometric Management, Issue: February 2001