Benchmark Your Practice
Evaluating where your practice is
now could help you discover where you should be headed in the
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:
- hire and train employees
- pay rent and utilities
- promote himself with the
intention of increasing sales
- have a stated goal of making
The business behind the
However, there's something
important that separates an optometrist from a merchant on the
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:
- gross and net income
- key fees
- the number of patients seen
- amount of production relative
to staff and general overhead.
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."
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 email@example.com.
Optometric Management, Issue: February 2001