I recently received an email from an optometrist who asked an excellent question. It is one that I deal with fairly often, so I thought I would cover it here. The doctor started by correctly acknowledging that some important decisions, such as when to bring in an associate or whether it is smart to drop a vision plan, depend on how far out the practice is booked with appointments. Her question was how to apply that logic for a practice that preappoints, since her practice is always booked fairly solid for months in advance.
Using patient demand
First, I want to congratulate this doctor on building what is obviously a very successful practice. Preappointing can be a very effective technique in practice building, but there must be many more good things going on to achieve that kind of patient demand. I agree that some measure of patient demand is helpful in making strategic management decisions. Hiring an associate doctor, deciding if you should join a vision plan (or drop one) and raising fees are three key areas that depend greatly on how much patient demand there is. If you hire an OD and he or she simply sees patients that the senior doctor would have seen, the senior doctor will see a drop in personal income. We need the new doctor to see additional patients and it is best if a good supply is already waiting. Another example: if you do not have strong patient demand, it is smart to accept even the lowest vision plans because some profit is better than nothing.
Read on for more on how to analyze patient demand.
It is interesting to note that recall methods are fairly evenly divided between the preappoint enthusiasts and the more traditional recall message. Both of these methods now rely heavily on email, rather than postal mail, but postal mail is still very reliable and still has a place as a back up to electronic and telephone.
We may want to use different recall methods for routine vision exams and medical eye care. It is extremely common to preappoint when the next exam is in six months or less and when there is a medical need. Some practices ask the patient what method of recall they would like to use, and offer preappointing, email reminder, telephone or post card via regular mail. I like that customer service aspect.
Preappointing is more effective than the reminder notice methods when the system is handled extremely well by the staff, but it is fairly easy to not handle all the communication aspects and the confirmations perfectly and then it does not work so well.
Overall, preappointing is highly regarded by most ODs, but consider these drawbacks:
Preappointing can lead to a higher no show rate.
There is more last minute rescheduling, which can lead to some appointment slots not being filled at all.
Preappointing can lead to lower revenue per patient because more exams are seen that result in no Rx change or no treatment.
It can be tough to know how far ahead you are truly booked, for management purposes.
When you bring on a new associate doctor, it can be more difficult to transfer patients to the new doctor because they already have an appointment with the senior doctor.
How to measure patient demand
If you are not preappointing, you can just scan the appointment schedule for the next couple weeks and see how many appointments are out there.
If you are preappointing and you seem to be booked solid, consider coding your appointments in some way to show which ones were scheduled a year ago as a preappoint and which ones were recently scheduled. Obviously, all new patients are not preappoints, but some established patients could have fallen out of the system and recently called to schedule an appointment. You can measure your no show and reschedule rate and apply that to the two groups – knowing the preappoint group is slightly less reliable than the active call-in group.
In addition to that, here are some more ways to gauge your patient demand.
I would look retroactively at the recent past to judge how busy you are. Start with how many patients were actually seen per day on average. In this day and age, I think each OD should see between 20 to 25 patients per eight hour day. If you are not seeing this number, is it because you don’t want to or because you don’t have enough to see?
In my analysis, the 20 to 25 number is a mixture of all kinds of exams – the majority is typically comprehensive, but it includes follow-ups and office visits also.
If you are seeing that number on a consistent basis, I’d say you have excellent patient demand and you could easily hire an associate OD or drop a low paying vision plan or raise your fees.
You can also use some measure of revenue production as a guide to how much demand you have. This varies based on your mode of practice and other factors, but it is quite realistic for one full time OD in private practice to produce $1 million in collected gross revenue. Many optometrists produce much more than that, but you can set your own goal.
Get familiar with the concept of full time equivalent (FTE) and know what your OD FTE is. If you have one optometrist in your practice and she sees patients 3.5 days per week or about 28 hours, you have about a .7 FTE. If we use the $1 million benchmark, this doctor should produce about $700,000. Use 40 hours per week as the full time standard.
Best wishes for continued success,
Neil B. Gailmard, OD, MBA, FAAO
Editor, Optometric Management Tip of the Week
Dr. Gailmard's new book, Practice Management in Optometry: A Blueprint for Success Based on the Optometric Management Tip of the Week, is now available on Amazon.