Consider the benefits of sharing a practice with an ophthalmologist.
BY DARYL DEMONBREUN, Lebanon, Tenn.
Merge optometrists and ophthalmologists into a joint equity practice where there is equal ownership and governance?
Many of our associates said it couldn't be done -- too many obstacles existed. But there were too many opportunities to cast the concept aside.
Now, six years later and far, far wiser, we're beginning to realize our achievement. As peers and colleagues face difficult decisions about the future, we wanted to share our experience so that doctors can make an educated decision about mergers.
Merging optometry and ophthalmology practices creates obstacles that could appear far too difficult to overcome. Cultural differences, practice patterns, retail ventures, employee loyalties, etc., create a maze that those considering the merger must explore carefully.
The best advice
What counsel can we share? The following is not meant to be all-inclusive, but rather to provide a framework for your consideration.
First, get the best advisors you can. It's not enough to engage the services of a qualified attorney or CPA. You need someone who's been there and done that. Consultants are available for a purpose. Don't assume that you can deal with everything in the process without outside counsel.
Secondly, realize that the process is almost as important as the outcome. Invest time to deal with each significant issue. Too many of us want things done right away. We find it difficult to wait. But such a venture takes time, and it's an investment worth making. Ignore an issue and it will likely emerge later.
Lastly, don't view a merger as the answer to every issue or problem in your practice. There's no magic bullet. Such a venture will likely raise issues that you may have ignored. This type of venture provides a platform where the combined experience and wisdom of the merging parties can deal with those practice issues.
The best of both worlds
Our achievements, listed here, represent hours of blood, sweat and tears:
- The ability to employ more qualified and experienced business personnel and advisors
- Immediate consultation from associates
- More sophisticated high-tech equipment/a more complete practice management system
- New, modern 12,000 square foot facility with an adjacent ASC
- Creation of a high-end, upscale optical dispensary
- Greater leverage with third-party payers and suppliers
- Competitive advantage through increased community recognition
- The ability to obtain other tertiary providers of specialized services on site, which keeps patient at our facility
- The ability to expand to satellite locations for greater exposure
- Creation of a one-stop shopping mindset among patients
- Increased efficiency in billing and collections
- Better financial performances and reporting.
Twice the challenge
We don't want to mislead you. You have to overcome disadvantages and obstacles. For example:
- A loss of independence
- Increased costs. Economies of scale -- including increased insurance costs for buy-sell agreements, overhead protection, etc. -- ultimately come later. You must retain staff in a more complicated environment, so pension and profit-sharing costs have risen as a benefit enticement.
- Decreased net compensation in the short term
- Loss of employees who couldn't blend into the new cultural environment
- The ongoing issue of fair and equitable income distribution. We've faced multiple issues in reaching a plan that addresses fairly most of the concerns of the partners.
- A cultural paradigm shift
- The knowledge that my vote is now only one in five. My fellow partners can outvote me.
- The time to make decisions or address issues increases as it now involves partners.
- Management questions. Who's getting the bulk of the attention -- the major revenue producer or an equal share among all involved?
We realized that this was far more complicated than we expected, but we've seen a commitment to excellence that would likely have been challenging to maintain in our independent practices. We haven't resolved all of our issues, but we're confident we can successfully resolve whatever may arise.
As fellow colleagues who've been through this, we stand ready and willing to help you determine if this is right for you. No one can make that decision for you, but we're proof that it's possible. The Eye Center stands as a tribute to our determination and willingness to buck the norm. If it's for you, the outcome is worth the journey.
With more than 20 years of consulting and administratvie experience, Mr.
Demonbreun, practice administrator for The Eye Center, has helped small and independent groups merge into single practices. Contact him at (615) 453-4906 or at
Optometric Management, Issue: June 2004