Are you profitable? If you own your own practice and do a fairly decent job at running it, chances you are. This is why lenders and PE love the optometric space: putting in a few efficiencies can enhance what is already starting to churn out a margin. The relatively low risk of failure is attractive, but if you are anything like me (and chances you are if you own a practice), status quo is not acceptable. As I like to tell my reps, just because my numbers are “really good” compared to industry averages, I will always strive for better, dynamic change and improvement.
In this vein of thought, I always marvel when clinic owners tell me that they provide a service, or accept a vision plan, in which they “break even” but that it’s “good for business.” Hmmmmm? I understand in the retail sector the concept of a “loss leader:” a product that drives you into the store (in which the retail business loses money on) in the hopes you are going to purchase other products that are more profitable in the same visit. However, in our profession, I would argue that any service or product should bring profit to you, and if it doesn’t, perhaps you should re-evaluate how you are managing said service or sale in order to make it profitable or drop it altogether. And, those services or products can still be “good for business” and drive more patients your way. Here are examples of a few of the services/products I’ve heard given example to:
Vision therapy. There is a lot of benevolence in this specialty, which I love and admire. I offer VT in my practice as a small subset of my overall service offerings and it’s truly rewarding. It’s this service I hear about most as being a “break even” service. Frequently, I find in these scenarios the doctor is the one doing all the vision evals and therapy. If that’s the case, then yes, you are likely breaking even. My suggestion here is to either a) charge more for the service that’s being delivered by the doctor or b) (and the preferred option in my mind) hire a therapist to free your time as a clinician. If this makes you nervous, consider how many more patients you can help if you are available to consult and advise.
Dry eye. I find here that it’s mainly because a doctor is dipping their proverbial clinical toes into the waters of dry eye management, but not taking the full plunge. No, if you are just selling a few products here and there, and not investing in more advanced treatments that can be done or offered in-house, you may not be doing more than “breaking even.” The additional factor to consider here is that if you truly move the needle in improving your dry eye patients’ outcomes, by having more profitable services, not only will you improve your bottom line, you will likely generate referrals from said patients.
Vision plans. I’m here to tell you that you don’t have to accept every vision plan out there. In my opinion, just because you can, doesn’t mean you should. Sure, there is the possibility that a lower-paying plan drives those patients into more profitable services in your office…. but at what cost? One of the key drivers that encouraged me to drop one of my major vision plans was the fact that both my staff, and thus patients, were extremely confused about the benefits and resulting financials. Although my staff were well-versed, trying to communicate benefits resulted in confused and frustrated patients questioning my clinic’s integrity. That’s where I drew the line. No outside party is going to control my reputation just because they promise volume along with a healthy dose of confusion. I calculated chair cost, added staff time spent educating/managing/submitting for the plan, figured out how many patients from other plans would be needed to make up for the loss of this plan’s patients (it wasn’t as many as I thought), and said good-bye. There was no break-even for me here. My clinic grew in profitability after dropping this plan and was less busy as a result.
In summary, the overall message when evaluating profitability is asking yourself two key questions: 1. Is this “break-even” service being offered at the highest efficiency, and could I create more margin by delegating or investing in improving this service? 2. What’s the opportunity cost, both literal and figurative, to your practice by managing this “break-even” service? Basically, evaluate where your energies could best be put or diverted to create more draw for your highly profitable services.
Gina M. Wesley OD, MS, FAAO owns and practices at Complete Eye Care in Medina, MN. Accolades include Minnesota's Young Optometrist of the Year in 2011 and the Early Professional Achievement Award from The Ohio State University College of Optometry in 2013. She is a member of the American Optometric Association, a fellow in the American Academy of Optometry and enjoys practicing, writing and lecturing in the industry. For questions or comments about this article, please contact email@example.com.