Diagnose Your Management Problem Before Treating It
April 29, 2015
Just as in providing good clinical eye care, you must diagnose your practice management disorders before you can treat them! Busy optometrists often just take a shotgun approach to practice management; when business seems down, they hold a trunk show or do some extra telephone recall. A better approach is to analyze the business and develop an action plan that goes beyond one or two events. Develop a complete strategy rather than some new tactics. After all, you wouldn’t treat a red eye without knowing the etiology.
Many practice management problems can be identified with business data, so that is a good place to start. Be sure you are familiar with the reports you can generate through your office management software system and from your accounting software (like QuickBooks). If you are not sure how to run reports, consult your user manual, or call customer service if needed, and go in and start producing reports. Once you get it, make notes about how to run and save these reports every month or every quarter. You could assign some of the reports to staff members and ask them to send them to you on a specific time schedule.
Here are a few basic metrics you should have:
Collected gross revenue per day and per month. Compare to the same time period of the previous year. Practice revenue should always grow.
Average total fees (revenue) per comprehensive exam.
Eyeglass Rx retention rate.
Multiple pairs of glasses sell rate.
Appointment fill rate (number of exams performed divided by number of appointment slots available).
Revenue per staff full time equivalent (FTE).
Revenue per OD FTE.
Cost of goods sold and other key expense categories.
It is helpful to also know the national norms for some of this data, which is available from various professional organizations and management consulting firms.
In addition to data, be sure to spend some time observing practice operations. Many things can’t be determined by data, such as customer service, staff morale, office culture, efficiency, traffic flow, marketing projects and more.
Not being busy enough is a frequent problem for optometrists. You generally know it if you have it, but be sure you have your appointment schedule template set for enough slots. The treatments for low patient demand are not usually easy or fast, but focus on customer service and the patient experience, vision plans, medical insurance plans and practice marketing.
The size of your office can limit your growth. If you have enough patients, but can’t see more per day because you don’t have enough exam rooms, not enough workstations at the front desk and not enough room in the optical to handle more people at once, you may need to expand your office space. Increasing your number of employees may not be possible if they don’t have space to work. You may not be able to do much about it until your lease ends, but recognize the problem and develop a plan for more space. You may be able to reallocate your existing usage of space. Perhaps there is an empty office in your existing complex you could move into or add on.
Efficiency and flow
You may have fairly good patient demand, but you feel like you are always running behind schedule and there is no way you can see more patients per day. Then it is time to look within and diagnose why you are taking too long with patients. In many cases, the first step in treating this problem is to hire another full time employee. You may actually need to delegate more, but the best way to learn to do that is to hire an extra staff member. When you actually have that person on the payroll, you will quickly figure out what you can have her do. You will delegate more if you have someone to delegate to.
As an OD, consider the things that you do fairly often that could and should be delegated. Do you do your own routine tonometry? Do you ever take your own entrance VAs? Do you ever do autorefraction or retinal photos or fields? Do you insert trial contact lenses on the patient yourself very often? Do you ever do lensometry on the patient's habitual Rx? If so, you need another technician.
Service and product mix
An excellent metric to look at is average collected gross revenue per comprehensive exam. Just take the total collected revenue for the month and divide by the number of comprehensive eye exams performed that month. This data point removes patient demand from the equation because it is revenue per patient. The national average for optometrist is about $307, but I know many ODs who do more than $500.
If this metric is low for you, consider adding more services and carrying a larger mix of high-end frame lines. That does not mean you won’t still carry affordable frames, but the mix could skew higher. You also may need to raise your fees. Yes, fees still matter even if you have a lot of vision plans because many services and products are not covered by insurance, or the exams are billed to medical insurance which pays better.
On the service side, invest in specialty instrumentation and offer more services, such as medical eye care, orthokeratology, low vision, nutrition counseling, vision therapy, sports vision and more. Be sure to offer a retinal screening and other optional testing to your vision plan patients.
How do you treat a problem such as staff members who can’t get along with each other and are basically unhappy? Read up on organizational culture and staff management. Think about the job from the employee’s point of view. What factors create good or poor levels of job satisfaction in your office environment? Studies show that employees want to be appreciated by their bosses and coworkers. They want respect and a feeling of self-worth. Can you give that to them? Do you have weekly staff meetings and many positive interactions every day? The culture comes from the leaders in an organization. Just show staff that you care and treat them as equals.