For many optometrists who own practices, hiring an associate OD should be one of the ultimate goals. This is the first step in achieving the CEO of your practice model. Adding an associate allows you to quickly increase practice revenue and net income while allowing you to spend less time on patient care and more time on practice management.
When to do it
It takes a lot of work to prepare a practice to successfully add an associate doctor, but it is so worth the effort. The main requirement is lots of patient demand, so you may need to reassess your goals and your marketing plan. In my view, it is the responsibility of the practice (and the owner) to provide a strong supply of patients for the associate right from the beginning. With this approach, the associate OD is fairly busy right away and generates a large increase in gross revenue without taking away any personal income from the practice owner. The factors to look for are: how far ahead is the senior doctor booked and how many patients does he/she currently see?
To consider bringing in a full time optometrist, I like to see a practice that already uses a system of high delegation to clinical technicians, sees at least 20 patients per day (all types of exams) and is booked ahead at least seven days solid. Greater patient demand than that is even better. Less demand than that may be sufficient for a part time associate. If the practice owner wants to reduce his/her clinical work days per week, that will increase patient demand for the associate, but it also reduces personal income for the owner somewhat because the owner will be paying the associate to see those patients. Regardless of that, if there is excess patient demand there will be plenty of new revenue to cover the new doctor’s compensation and create additional profit for the owner.
I don’t believe the old model where the new associate is expected to build his or her own patient following is a good approach. This method usually does not produce enough income for the new doctor to make a living. Increasing the patient demand can take longer than expected. If the established OD is not seeing enough patient demand, it is hard to imagine that the new OD will be able to attract a significant number of new patients.
How to increase patient demand
For most practices, patient demand is the limiting factor to being able to hire an associate. If that is true in your practice, it may be time to step back and reevaluate your marketing plan. What would it take to attract more patients in your community? If your goal is to attract far more patients than needed to just keep your schedule full, what can you do? What big changes can you make? Consider these points:
Vision plans. While many ODs believe the smartest way to build a practice is to avoid participation in vision plans; that philosophy may change if the goal is to bring in an associate. Vision plans can provide a fast increase in patient flow.
The medical model. Be sure you are actively providing medical eye care and billing Medicare and medical insurance plans.
Customer service. Making your practice convenient and easy to do business with can have a profound effect on patient demand through word of mouth referrals. Ask yourself the tough questions like how many evenings and Saturdays are you open?
A larger, nicer office. This requires a financial investment and some time, but moving to a better office is one of the most powerful marketing strategies I’ve seen. Make your optical better also.
Referral sources. Can you build a network of physicians or educators or business leaders who will recommend your practice to others?
I prefer to pay associate ODs a straight salary, which is contrary to how many practice owners want to do it. Many owners I speak with want to pay some kind of percentage of production. The biggest problem with paying a percentage is that no one really knows how much money that will be. In the early days after joining the practice, the production will be low and the income may be insufficient. A few years later, I would expect patient flow to be quite good and production will be very high, which means the compensation could be much higher than the going rate for an employed OD.
I believe a fair salary and benefit package is the best way to go. Raises are provided on a yearly basis, commensurate with performance. Employment benefits for full time doctors should be quite generous including health insurance, paid time off, paid holidays, continuing education expenses, AOA dues, retirement programs, malpractice insurance, etc. Part time doctors are typically paid on a per-day or per-hour basis and typically no benefits are provided.
What about incentives?
I don’t think associate optometrists need a financial incentive; they just need to practice excellent eye care. I control the production of the associate OD by controlling his or her patient schedule. If I can fill the doctors schedule (or nearly fill it), the financial production will be there. Tracking the gross revenue per exam is a good way to monitor production and if that metric is significantly below the owner’s performance, the reasons should be determined followed by discussions and mentoring. Ultimately, if a doctor’s production is sub-par, he or she may not be the right person for the job.
I’ll present Part 2 on this topic next week and I’ll cover topics such as finding the right doctor for the job, preparing your practice for the change and more.