5_05 Fix this_2
fix this practice
Is Bigger Better?
these points before you decide to open a satellite office.
S. KATTOUF, O.D., D.O.S.
been in practice for ten years and knowing the geographic area very well, I am contemplating
opening one or more satellite offices. What's your opinion?
T. K. Woodard
Expanding the number of locations can be a plus or a minus. The potential benefits
a satellite office can offer:
Open up new markets and
possibly expand patient base.
Expand certain areas of service.
For example, if the new satellite is in a more affluent area, it's very feasible
to add specialties such as developmental vision and orthoptics. Patients in these
wealthy markets are often motivated to invest in their child's ability to learn.
This type of addition to your practices will significantly raise net income and
offer great clinical services to the entire community.
The possibility of improving
your purchasing power with suppliers. More offices mean more inventory is necessary.
Suppliers may be willing to strike more attractive terms with the increased business.
The possibility for associate
doctors to earn additional income.
Increase the number of medical
cases in your organization, which increases your gross/net.
Additional doctors on staff
make it easier to share emergency call hours and extend office hours.
The other side
Where there are positives, there are potential
Absent ownership can be a problem.
The associate doctor must take on a role as resident manager. Give him/her the authority
to keep staff "in bounds" or adhering to standard operating procedures. The associate
must also be financially compensated for these management duties.
Each location increases operating
cost (overhead). In a managed care environment, the owner, consultant, and accountant
must study the feasibility of paying rent, the associate doctor, additional staff
and the cost of inventory, and compare it with potential profit.
The productivity of staff with
no owner present can be a problem. Employees will embezzle time, money and products,
even with an owner present. The problem is multiplied by owner absence. There are
numerous proven check and balance procedures to eliminate the embezzlement issue.
Creating a schedule for each
location is a problem. Have a central scheduler or assign this to the associate
doctor at his/her location.
Continuity of standard operating
procedures. Many times these satellites make their own rules. These behavioral patterns
go against the standard operating procedures spelled out by the owner.
Many times the locations become
competitive or jealous of one another. Rather than working as an organization, they
become separate entities. Only the owner and consultant can prevent this.
Dr. R. E. Owens called my company as an owner
of four independent locations. Dr. Owens and his wife are both O.D.s. Prior to my
consultation, they both had an identical patient interaction of thirty-six hours
The organization was an administrative
nightmare. I assigned Dr. Owens the "owner/manager" and cut his patient interaction
hours to eight. I taught him to administrate and visit all locations, with some
visits announced and some unannounced. I empowered the associate doctors to be branch
managers and gave them additional income for their management tasks. I motivated
the staff with a commission if the office reached set financial targets. Structure,
organization and consequences to negative behavior were the order of the day. The
organization now operates as a unit, not as individual spokes of a wheel. The result
is reduced stress and greater profit for the ownership.
Is bigger better? It depends on all
of the above factors. If done with proper advice and careful consideration, expanding
locations can be very profitable and satisfying. Adding offices without proper plans
and controls is a disaster.
Optometric Management, Issue: November 2005