Prescribing Lenses: Are You Conservative or Aggressive?
October 4, 2017
There are many situations in practice management where it is helpful to know if an optometrist is conservative or aggressive when it comes to prescribing glasses or contacts. We really don’t have any absolute definitions of those qualities, but there is some data we can draw upon that gives us some insight.
An aggressiveness scale
We can consider the prescribing philosophy of optometrists as if it is on a scale of proactivity, with aggressive prescribing on one end and conservative prescribing on the other. At the center of the scale we have a balanced or average prescribing rate. Of course, this prescribing philosophy scale is relative. I have not seen any absolute data that would establish a national norm on this point. There are many factors that would create variability from one practice to the next, such as patient population differences, the local economy and the business model of the practice. But there is a financial metric that is easy to measure and correlates well to the prescribing rate, which I’ll present below.
Examples of aggressive and conservative prescribing
I don’t mean to cast a perception of good or bad at either end of the prescribing spectrum. I view the prescribing habits of a doctor as a matter of professional judgment and it is up to each one to decide what is appropriate. Having said that, here are some examples of aggressive prescribing:
• A doctor who prescribes sunglasses and computer glasses at the same time as the first pair of glasses.
• A doctor who might prescribe new glasses even if the change in refraction is only .25 diopter.
• A doctor who considers the occupational and lifestyle needs of the patient when prescribing.
• A doctor who recommends new eyeglasses in order to utilize the latest lens technology.
Examples of conservative prescribing:
• A doctor who does not change the lens Rx very easily; prefers to see a power change of at least .75 diopter in order to recommend new glasses.
• A doctor who lets the patient decide if new glasses are needed.
• A doctor who frequently tells patients their old glasses are good enough or if new lenses are needed, that the old frame is good enough.
• A doctor who does not perform a subjective refraction if entrance acuity with correction is 20/25 or better.
A metric that correlates to aggressiveness
When I analyze the financial production of an optometrist, whether it is that of an associate OD, a consulting client, or my own, I like to look at revenue per comprehensive exam (RPCE). This metric is especially valuable because it removes the factor of patient demand, which may be beyond the doctor’s ability to control. A doctor could have low financial production because he or she does not have enough patients (yet), but if the RPCE is strong, you only have to get the doctor busier.
Low patient demand can be due to a number of factors, such as:
• A new doctor joining a practice
• A practice that was recently opened cold
• A practice that is in a highly competitive area
• A practice that is in a rural location with small population
Revenue per comprehensive exam goes by several different names: gross per exam, revenue per patient, total sales per patient, etc. It is not a literal accounting of fees generated during an exam; it is an average of all items sold divided by all exams. Here is how you measure it:
• Pick a time period. Longer is better, like a quarter or a year.
• Add up all collected gross revenue from all sources produced by each doctor for that time period. This includes glasses, contacts, medical eye care, plano sunglasses, nutritional supplements, Optomaps and everything else!
• Determine how many comprehensive exams each doctor did in that same time period.
• Divide revenue by number of exams and you get the RPCE for each doctor.
• Obviously, the more products and services sold, the greater the RPCE.
• The national average RPCE is about $307 according to the Management and Business Academy.
Relating RPCE to aggressive prescribing
If we control for patient population variables, we can correlate prescribing aggressiveness with this financial data point. I don’t really know how often an OD should prescribe (and recommend) that a patient get new glasses, but I do know the median revenue per comprehensive exam. I know this stat on a national basis and I also can easily determine it in any given practice.
Here is a hypothetical situation for a practice:
• The senior doctor/owner of a practice has consistently produced revenue per comprehensive exam of about $490 over the past several years. It is surprising that this stat does not vary more than a few dollars in any given time period.
• An associate OD has been with the practice for two years and has RPCE of $270 for the last quarter and this has also been consistent.
• The types of cases the new doctor sees is pretty similar to the senior doctor. The new doctor does not see more Medicaid patients or a larger percentage of older patients.
• The associate is not as busy as the senior doc. The older doctor sees twice the number of exams per week as the younger one.
Given that the patient demographics are similar, I would conclude that the associate is too conservative in his or her prescribing philosophy. The number of patients seen per week is irrelevant because the financial analysis is on a per exam basis. Of course, it would be fair to say that the senior doctor could be too aggressive, but that is based on the eye of the beholder. Since the practice has been established on the prescribing philosophy of the senior doctor, that sets the standard.
In any case, we can agree that the associate is more conservative in prescribing than the practice owner. This can be the basis for an important discussion. The associate will learn what his boss expects. The senior doctor could serve as a mentor to the associate about patient communication. Or the two doctors may learn that they are not really very compatible and it may be best to go separate ways.