Article Date: 12/1/2004

practice management
The 7 Biggest Practice Management Regrets

You can't expect to advance in practice (or in life) if you don't occasionally make changes. Take these for example.
BY BOB LEVOY, O.D., Roslyn, N.Y.

Looking back, what's been the biggest regret in managing your practice? I've posed this and many other questions to countless practitioners as part of the market research I do for my seminars. I ask this question so we can all learn from the mistakes of others. Following are some of the most frequently mentioned regrets in managing a practice.

1. I wish I had raised my fees sooner

A high percentage of practitioners have expressed this regret and all agree that the complaints they got about higher fees weren't nearly as numerous as they had feared. Most patients take reasonable, periodic fee increases in stride. Many don't even notice. Even optometrists who've lost patients because of fee increases reported improved overall profitability.

Before delaying an overdue fee increase, do the math. If, for example, you raise your exam fees by 10%, then you can perform 9.09% fewer exams and generate the same net profit. (The calculation for the number of exams needed with a fee increase of 20%, for example, is: $120 x N [the number of exams] = $ (the same gross income as before the increase). Then subtract the same overhead (in both cases) and the net incomes will be equivalent. You can then express the reduction in the number of exams as a percentage of the original number.) If the fee increase is 20%, then you can perform 16.77% fewer exams without affecting profitability. If, in addition, the overhead drops (as it may if you see fewer patients), then an even greater drop in volume can still occur before your profitability drops.

Assume for the sake of simplicity that the fee for a comprehensive exam is $100 and you perform 2,400 yearly (change the numbers to comply with your practice). The gross revenue for that procedure is $100 x 2,400 = $240,000. If the fee is now increased by 20% to $120, then the number of exams needed to generate the same revenue as before would be $240,000/$120 or 2,000 (versus 2,400). This represents a drop in the number of exams by 400 or 16.77%.

Do you believe that 16% of patients would leave your practice if you raised your fees 20%? If not, then you'd be way ahead of the game by instituting the increase now rather than later. And that's the downside. The upside is that, if you raise your fees and don't experience a drop in patient visits, then your revenues go up. Raising your fees is a no-lose proposition.

2. I wish I'd moved sooner

In some cases, the practices had outgrown cramped quarters and needed additional exam rooms, a larger dispensary and perhaps an in-office lab. In other cases, the area experienced major changes such as a loss of industry or a declining economy. The handwriting was plainly on the wall but the practitioners ignored it. The reason most frequently given? Inertia.

Once practitioners made their moves, however, everyone with whom I've spoken agreed that that the new practice was bigger, better and less stressful than the previous practice -- and the time it took to get it there was much less than anticipated. Many were absolutely euphoric about their new offices as were their patients and staffs.

"I learned the hard way that higher rent in the right location is a good investment," says Robert A. Koetting O.D., F.A.A.O., of St. Louis, Mo. "When I moved into a high-rise office building in an upscale neighborhood, the practice boomed. I realized afterward that I should've done it sooner."

3. I should have bought new equipment sooner

Many practitioners postpone the purchase of new equipment on the premise that their older equipment is "adequate and does the job." However, new equipment accelerates practice growth.

"Patients repeatedly state that when practices use advanced technology in the delivery of care," says Eugene L. Antenucci, D.D.S., of Huntington, N.Y., "they perceive they are actually receiving better care. Patients' perceptions of enhanced quality of care create greater degrees of trust in the ability of the office to treat them in the manner they want to be treated. Whether we like it or not, patients tend to equate advanced technology with better care, perceiving that doctors and staff are more 'up-to-date' and are more concerned with the patient's comfort and well-being."

4. I should have redecorated/remodeled my office sooner

"I never realized how bad it was," one practitioner confided, "until we redecorated and everyone told us how nice it was and what a big improvement it was."

The question to ask yourself is, "What kind of image does my office convey and is it congruent with the level of expertise and professionalism I want to project?" The fact is, you don't have a choice about whether your office makes a statement. The only control you have is over what kind of statement it conveys.

As a quick tip, redecorate or move your office every seven years. Even if you don't notice the sameness, your patients will. And for the new optometrist, the longer your office environment conveys the feeling of a "struggling optometrist," the longer the struggle.

"Profiting from a rebuild/redesign," explains consultant Gary Gerber, O.D., "is one of the absolutes of practice building. I've never had a client rebuild/redesign his office and not make money. Of course," he adds, "you have to do it the right way."

5. I wish I had dismissed "demanding and difficult" patients sooner.

As a speaker, I've asked countless audiences of optometrists and staff members whether anyone has ever regretted dismissing demanding, unreasonable patients whom there is no pleasing and whom always find something to gripe about. The only regret I've ever heard from practitioners who have "fired" such patients is, "I wish I'd done it sooner." And the staff members in the audience invariably concur.

Optometrists who have dismissed a patient under these circumstances tell me they get a variety of reactions. Some patients realize they've been out of line, apologize for their behavior and become model citizens. Others take the hint and leave.

Lawyers advise that you check with your malpractice insurer before taking any steps related to dismissing a patient. For example, you need to consider important issues regarding abandonment -- including those that exist within the confines of a managed care plan's provider panel. (For more on how to fire a patient, read Dr. Neil Gailmard's February 2004 Management Tip of the Week at optometric.com/om_mtotw.aspx.)

6. I wish I had fired an unsatisfactory employee sooner

A surprising number of successful practices report being impacted by individual employees who are out of step with everyone else but, for different reasons, remain on the payroll. The reasons vary, but include a sense of obligation to a long-time employee or kindness (because she needs the job) or because "I dread having to fire him."

If you're faced with such a dilemma, then the question to consider is, "To whom do you owe what?" What do you owe a long-term employee who has, for example, become difficult and overbearing -- not only to patients, but also to co-workers? What do you owe your patients, associates and other staff members who have to contend with such behavior? And what do you owe yourself in this situation?

If you have conducted periodic performance reviews, given fair warnings to those who need to change, documented such discussions and have seen no improvement, then it may be time to let them go.

After a recent seminar, an optometrist wrote me the following:

"When I returned to my office, I fired my bookkeeper of 13 years. It was without doubt the hardest, most painful thing I've ever done. It was also the best thing -- for my staff, my patients and myself. It was hard to recognize the negative impact she had on the practice until she left."

7. I wish I had spent more time with my family

Many optometrists continually put off spending time with their families, which results in much borrowing against the future. The assumption? There will always be a future. However, time quickly slips by.

You probably know at least one parent who laments the growing up and moving away of children for whom he never had time. I recall one optometrist who, in his acceptance speech for his state association's "Optometrist of the Year" plaque, regretted that he had devoted so much time to his profession that he never got to know his children.

An Illinois optometrist was torn between offering evening hours at his office and being at home with his family. After much deliberation, he displayed a hand-lettered sign in his reception area that read, " Starting January 1st, Daddy's office will close at 6:00 p.m." It was signed "Debbie and Billy." He lost few patients.

Carp diem!

At Cornell University, psychologists Thomas Gilovich and Victoria Husted Medvec asked nursing home residents, Cornell students, employees and professors emeritus to describe the biggest regrets of their lives. Using questionnaires, phone surveys and one-on-one interviews, they obtained 230 responses.

The results indicate that what those surveyed most regret are the things in life they failed to do, not the things they did -- by a margin of nearly 2 to 1. The most common listed regrets? Missed educational opportunities and failures to "seize the moment."

What if all possibilities were open to you? If money were no object, what's the first thing you would do? A Vancouver, British Columbia practitioner took a six-month leave of absence from his group practice. He traveled with his wife and two children to the South Pacific. It took some rearranging of priorities, but it resulted in a once-in-a-lifetime adventure. His assessment of the experience? "You don't just have a recharged battery. You have a whole new motor."

Mistakes are part of the learning curve. The trick is to learn from the mistakes of others and to avoid making the same mistakes in your practice.

Dr. Levoy is a seminar speaker on the topics of profitability and practice growth. His newest book, "201 Secrets of a High Performance Optometric Practice," is now in second printing by Butterworth-Heinemann. You can reach him at b.levoy@att.net.

 

 



Optometric Management, Issue: December 2004