Money for nothing
Take Dr. Frank Fuller for example. He grosses
$504,000 and is booked almost two weeks in advance on a routine basis. Dr. Fuller
sees an average of seven patients per day, five days a week, for full eye exams,
as well as a variety of medical visits and progress checks. At 48 weeks a year,
that equals 1,680 complete exams (7 exams x 5 days x 48 weeks = 1680 exams per year).
Even though the medical visits generate income that contributes to his total gross,
we still calculate his average revenue per patient as the total practice gross divided
by the number of complete exams. In Dr. Fuller's case this comes out to $504,000/1680=
$300 per patient.
Given his backlog, I would advise Dr.
Fuller see more exams each day. If he did ten exams per day instead of seven, the
results would be dramatic. His gross would jump from $504,000 to $720,000 (10 exams
x 5 days a week = 50 exams per week; 50 exams x $300 per exam = $15,000; $15,000
x 48 weeks a year = $720,000). Assuming his net is 31%, Dr. Fuller's net income
would grow from $156,240 to $223,200. That's an increase of over 40%, a huge gain
for seeing just three extra patients per day.
Accelerate your growth
Would the practice normally grow that much in
one year? No. There will be some empty spots while Dr. Fuller changes his schedule
to fit in ten patients per day. But, his practice growth would accelerate. The more
people you see and treat well, the more referrals you will get and the faster your
patient volume will grow. That's how $500,000 practices get to be $1,000,000 practices.
O.D.s who are grossing in the range
of $400,000 to $600,000 and struggling to grow usually have one of two excuses for
not seeing more patients. First, they question whether the demand is present. If
you are really booked more than a week in advance, you're not fully meeting the
already existing demand. In fact, it's likely you are losing patients because the
purchase of eye wear and an exam is often an emergency or impulse buy.
Delegation is the key
Another reason many O.D.s in the $500,000 range
think they can't grow: They feel like they are at full capacity. But if you want
to see more patients, all you have to do is improve your facilities and your staff.
I know O.D.s who routinely perform eight to ten quality exams before lunch every
day. You can too, with a pretest area, two fully-equipped exam rooms and a willingness
to delegate a significant level of patient care to well-trained assistants.
Practice success is circular. The more
patients you see, the more money you make. The more money you make, the more you
can invest in the kind of equipment and staff necessary to provide the highest quality
of care to your patients.
THE FOUNDER OF
KNOWYOURSTAFF.COM AND HAYES CONSULTING, DR.
HAYES IS A REGULAR CONTRIBUTOR TO OPTOMETRIC
MANAGEMENT MAGAZINE. REACH HIM AT JHAYES@HAYESCONSULTING.COM.
Optometric Management, Issue: September 2005