Psychology of the Transaction

Buying-Selling A Practice, Practice

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An often overlooked aspect when selling your practice are the psychological factors that come into play during the transaction process. In this discussion adapted from the Webinar Should I Stay or Should I Go, expert panelist Daryan Angle (VP IRIS The Visual Group) discusses the emotional journey of selling your practice.

The process of selling a practice is definitely an emotional experience with lots of ups and downs. When you get into the actual sales process you go through a range of emotions. There’s the stress of running your practice at the same time going through a sale process, and the questions that come up with regards to financial evaluation or diligence. They can be confusing, and you can get frustrated. You may think that things aren’t going to happen, and you can have low points.

It’s important to recognize that that’s going to happen no matter how stoic you are and how a logical thinker you might feel you are. We are all humans and we are driven by our emotional centers as a real way of making decisions and taking action.

What are the solutions? Have a trusted advisor, somebody who’s been there before who can fill in some of the more technical questions and be a buffer, walk you through certain things, and give you a better perspective on the whole process as it goes forward. It has to be someone you trust, it could be your CPA, or your broker, or someone else that knows the space.

You must set realistic expectations, and retain some flexibility. The sales process is not black and white, and things change based on information on the buyer’s side. It certainly can be helpful to be open with the buyer, so if you are feeling like something isn’t going right, or your point is not really being made, it is beneficial to be open with the buyer so that you can come to a resolution. Before you wind up being partners with your buyer, you want to make sure that you are able to air everything that gives you some apprehension. Part of the discussion during the sale can surround what the practice is going to look like post-transaction.

In addition, now that you are free of all the administration you used to have as an owner, you are going to have some free time in your life and you need to have a vision for where you are going to spend that time. That will make the post-transactional life more smooth and you may have less feelings of grief or loss due to the changes that have occurred.

Lastly, support the integration plan. Whenever there is a transition of ownership, the seller is goingto be a crucial part of that transfer of trust for the team, for the employees, and for the suppliers. As the seller, they are all going to look to the cues of the former owner as to whether they are going to accept the new owner and what they want to do. Being part of the integration plan in a meaningful way will not only help the transitional goal for the buyer, but it actually helps you emotionally because it allows you to go through a smooth transition as a cheerleader in the process.

 

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Job Interview: 7 Questions to Ask Practice Owners

Career Options, Human Resources, NextGenOD

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You’ve spotted a position at an up-and-coming practice that excites you. Before you go to the interview, there are key questions you may want to ask. Here are the top ones to pose during your interview with the practice owner.

Applying for a job in a practice is very much like dating. If, at the beginning of the first date, you suggest that two kids, a house in the country with a white picket fence, and a live-in suite for mom is what you are looking for … well, you just might scare off anyone who agrees to a date with you. When looking to be employed in a practice, you need to ease into finding out the answers you need to know. Conversations need to be logical, respectful and more about the owner-doctor and practice than they are about you.

The core question the owner-doctor is looking to answer is: how will you fit into the practice? If you start out with how much are you going to pay me, tell me about my benefits, how many days off do I get, will you pay for health insurance, dental insurance … all of this is about you. You are telling the owner you are more interested in you than you are in the practice. That’s a negative for an owner who is looking for someone who has the same passion about patient care and the practice as they do.

Here’s a better approach. Start the interview with the research you’ve done on the practice. Explain what you researched and how you’ve researched. This leads into the first question – Does my research accurately reflect your practice? This gives the owner the opportunity to talk about their practice. During this discussion one of the things you want to know is: how many full-time equivalent doctors are working in the practice clinic? This will be important later when you ask about practice gross revenue.

As you are talking about the practice be sure to ask: What are the most important needs you have right now – coverage on evenings or weekends, building the practice, bringing in a specialty? Where would you need me to fill in? You are beginning to explore the practice needs and how you will fit into the practice in a way that is helpful to the owner.

You are probably not the first employee-optometrist the owner has hired, so the owner knows that not all employee doctors are the same. There are productive doctors and there are non-productive doctors. Your task is to show the owner that you are a productive doctor interested in learning how to be even more productive.

The questions to ask are: What and how much communication do you need from me in performance reporting? I want to track my performance in areas such as gross revenue, $/patient and capture rate to make sure I am delivering high-quality care on every patient visit. Are there any other areas that you’d like me to track? How often would you like me to report these to you?

The conversation needs to turn to staffing, so you know what support you will have, so ask these questions: Tell me about your staff – will there be scribes, pre-testers? Tell me about the average patient flow through the practice. How often will I be scheduled with patients throughout the day? Do you want the patient hand-off in the exam room or in the optical?

If you are interested in partnership, then this needs to be brought up in the interview. Are you looking for a partner in the practice? If so, what are you looking for in a future partner? What time frame are you considering?

At some point during the interview you need to ask about the gross revenue of the practice. The question is: What was the gross revenue of the practice over the last three years? You are looking for the trend of the practice. Is this a dying practice, a flat practice or a growing practice? The trend of the gross revenue can give you insight into the answer. It also gives you the answer on the maximum wage package the practice can give you.

Take .2 times the gross revenue collected. That’s the maximum money the practice has to buy all the optometrists who work in the practice including the owner-doctor. If you know the number of full-time-equivalent doctors in the practice, then you can calculate how much is available to buy your services. You also need to know that, in contrast to the maximum, the average for the country is .15 times the gross revenue to buy all the optometrists who work in the practice. How much you are offered tells you how much the owner values you.

If the owner wants you to work in the practice, they will make an offer to you. The offer will contain all the information that you want to know, such as how much are you going to pay me, tell me about my benefits, how many days off do I get, will you pay for health insurance and dental insurance. Don’t lead with questions about this information. Let it come at the appropriate time in the discussion.

Your goal is to walk out of the interview with great knowledge about the practice, which will help you answer the most important question you have for yourself, which is: Do I really want to work in this practice? You will also have communicated to the owner that you are not the type of employee-doctor who is just looking to do the least possible to get a paycheck.

Be thoughtful and insightful in your questions, and find the practice which is the best fit for you.

 

MARK WRIGHT, OD, FCOVD

Dr. Wright is the founding partner of a nine-partner, three-location full-scope optometric practice. As CEO of Pathways to Success, an internet-based practice management firm, he works with practices of all sizes. He is faculty coordinator for Ohio State’s leading practice management program.

CAROLE BURNS, OD, FCOVD

Dr. Burns is the senior partner of a nine-doctor full-scope optometric practice that she built with her husband, Dr. Wright. She is also the COO of a state-wide nursing care optometry practice. Dr. Burns lectures nationally on practice management and staffing issues. Dr. Burns authored the Specialty Practice section of the textbook, Business Aspects of Optometry.

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Discussion: Practice Valuation Methods

Building Wealth, Buying-Selling A Practice, Finance|Wealth, Practice, Resources

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There are several commonly used formulas for determining the value of a practice. Often the different approaches are averaged together and used as a starting point to begin negotiations. In this discussion adapted from the Webinar Should I Stay or Should I Go, expert panelists Al Ulsifer (CEO FYidoctors), Grant Larsen (CEO Eye Recommend), Daryan Angle (VP IRIS The Visual Group) and Paul Gray (Optometric Services Inc.) discuss three commonly used methods in more detail.

Al Ulsifer, FYidoctors: The most common valuation method that we were seeing years ago is taking one year’s net income, and that can be on a three-year average. There are other considerations as well. A buyer will be cognizant of a practice that decides to not take holidays for the year prior to the sale, for example. So it’s important to have some stability over a period of time. It could be 100% of, or sometimes up to a net of 120% if the practice is growing and showing promise, and then adding on the fair market value of your assets. Assets being equipment, furnishings, lease holds, supplies, inventory. Sometimes it’s a bit of a challenge to assess what is the fair market value of those assets.

We have equipment companies that can go and give an assessment of what the fair market value of optometric technology is. Some folks will look at the net book value of those assets on your financial statements because it is quite a process to truly get an external valuation, a fair market value assessment of all assets in the business.

Our company will use a combination of a couple of different methodologies in a formulaic approach to generate the valuation.

Grant Larsen, Eye Recommend: There are a number of details when you are looking at some of the tangible and intangible items that impact weighted average gross income and how you value.

First, it’s a weighted average, the last 12 months being the most important, usually at about 50%, the second last year being at about 30%, and your third last year being at about 20%. That’s the weighted average of it, and you are relating it to gross income. Once you’ve got that gross income weighted average then you are looking at a number of components that will impact, plus or minus.

Looking at how well your business is run from a net income standpoint, that is an indication of efficiencies and the value of your business. Looking at the reputation of your practitioner and how that matches up with you as a buyer is really critical.

We look at the community as a whole and at the geographic location. We also look at mix of patients—the demographics, and parking and transportation. Consumers’ convenience is becoming very important to them.

Fees, credit policies, a lot of these elements need managing, so they have a dramatic impact on the value of the business, and often times it is the perception of the buyer as to whether these are positive or negative.

The last one is competition, or could be a lack of competition. We think about rural and urban practices and there is no rhyme or reason why one is more valuable than another, especially in Canada. But competition can have a direct impact on whether it is more or less valuable.

Daryan Angle, IRIS: EBITDA is certainly the most accepted evaluation in the public market.

If you take all your revenue coming into your practice and you start to pay out your expenses, wages, cost of goods, the rent, all those things and you get down to the number before you pay your taxes, before you pay interest on any money you borrowed, or before your accountant decides to depreciate or deduct an amount based on assets you have in the practice that is depreciating.

This is an accounting process that, when you are taking a piece of equipment or leasehold, you amortize or you depreciated over time, you take the number before that, before the interest, before the tax, you have your EBITDA, and that is the number that the market uses as an indication of the profitability of your practice.

Your operating expenses isn’t the number you want to use because it’s fairly common for practice owners to use their practice in creative ways to reduce the taxes you pay. Salary, running expenses, personal expenses like cellphone, automobile uses, other type of expenses that you can put through the practice which are not directly related to the operations of the practice and the buyer will not have to pay once they acquire that business.

Those are all things that you want to pull out of that EBITDA number when you are looking at adjusting your business for sale, as well as non-recurring expenses. If you changed your carpet last year, you are not going to do that every year, so you want to remove that from your EBITDA calculation when you go to sell your practice because it’s not something the buyer is going to have to do every year, and they are going to reap the benefit of the profitability of not having to have that expense.

When you make these adjustments you get to an adjusted value or adjusted EBITDA value, and then you apply to that value a multiplier. The negotiations around that multiplier relates to different factors—is it too isolated to recruit associates, is it big precisely because there is no competition? There are so many factors involved but that’s going to affect the multiplier that you applied to the EBITDA as well as what you adjust to. You may get creative in terms of what you think is a non-recurring expense, but that becomes a point of negotiation between your advisers and you, and the potential buyer.

That is the simple version of the adjusted EBITDA evaluation, certainly the one we use at IRIS, and it’s one that follows a lot of the rigorous accounting principles that you need for a public markets and one that we are very familiar with.

Paul Gray (OSI): The price needs to be fair to both parties, in particular if they are going to continue the practice together. I think it’s worth pointing out as well that some of the sales difficulties disappear when the practice is sold to an associate who has the benefit of familiarity of having worked in the practice for one or three years in advance, and as you’ve worked them in the practice, and you worked them in the management structure, and the staff interaction and so forth, the trust develops both clinically and interpersonally.

It also allows the purchasing practitioner to have a real sense of what their dollars per patient or their real revenue per patient that they generate in the practice actually is and it makes the calculation about affordability much easier. The practice must be reasonably priced to ensure that the purchaser is going to receive enough net to fulfill their financial obligations, their lifestyle obligations, taxes on their net earnings, loan payment schedule, student loans and so forth.

 

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High Tech Hiring: Why Predictive Analytics Is The Key to Successful Recruiting

Human Resources, Practice, Resources, Talent Acquisition, Technology

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2018 is proving to be a challenging year for hiring managers. Relatively low unemployment rates, a shortage of skilled workers, and a highly competitive marketplace are adding increasing pressure to practices already struggling to attract and retain top talent.

According to a recent survey, some 45% of companies are unable to fill vacant positions. If your business is one of them, we’ve got good news.

A number of new HR tech tools have harnessed the power of artificial intelligence, machine learning and predictive analytics to help take the guesswork out of hiring.

These technologies may well be the key to successful recruiting for your practice, no matter how big or small it is.

What is predictive analytics?

Predictive analytics takes large amounts of data gathered through data mining, modelling, AI, machine learning and statistics.

The information is analyzed to make accurate predictions about future behaviour or events.

In HR, past trends, patterns and relationships can be identified and used to assess which factors and characteristics are most likely to contribute to a candidate’s success or failure in a specific role.

How can predictive analytics help you hire better?

There’s a reason major enterprises such as Google and Hewlett-Packard employ predictive analytics tools throughout the entire spectrum of the talent management process.

How you hire is just as important as who you hire. From acquisition, retention, and development of new staff, all the way through to exit surveys and the process of hiring replacements, using predictive analytics can improve hiring processes in a number of ways:

1. Streamline success

Predictive analytics HR tools help cut through the clutter, identifying the factors critical to success and predicting which job seekers are most likely to succeed – both in your specific position and your unique office culture.

Reducing the time spent sorting resumes, ranking applicants and interviewing unsuitable candidates streamlines the hiring process, saving time, money and resources.

When the hiring process is not only faster, but more efficient and effective, everyone benefits.

2. Knowledge is power

Better decision making is based on having better knowledge.

Predictive analytics can help you gather crucial data regarding employee performance and productivity, turnover rates, engagement and job satisfaction.

Patterns and trends help identify which factors had a negative impact on your employee lifecycle in the past, and can predict which changes in your hiring processes will have a positive effect in the future.

3. Quality, not quantity

Many employers rely on certain job sites and recruiting tools because they consistently deliver a high number of candidates. But quantity is not an effective measure of the quality of candidates referred.

Why waste your time and resources sorting through a huge stack of resumes from job seekers who aren’t likely to succeed in the role?

Use the power of predictive analytics to determine which sources are the most effective at delivering the candidates you need.

Certain platforms, such as Eyeployment.com go a step further by pre-screening applicants, ranking them based on likely fit with your position and office culture, and even predicting which interview questions will offer hiring managers the most insight.

 

JAN G. VAN DER HOOP

Jan is the co-founder and president of Fit First Technologies, a company that applies its predictive analytics to the task of matching people to roles. Those algorithms drive platforms such as TalentSorter, FitFirstJobs and Eyeployment.com, which are relied upon by organizations to screen high volumes of candidates for “fit” in their open positions.

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The HR Challenge

Human Resources, Managing Others

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The challenge of HR is one of the most difficult aspects of owning a business. We often hear about the frustration of staff turnover from our clients.

Our work as consultants is tied directly to the integrity and sustainability of the team and over the years, we have seen some winning combinations.

Leadership is always the foundational piece. Not only will the direction of the practice come from the owner, but it is also key that the owner and their employees have a good working relationship built on respect and open communication. In general, how staff speaks to each other, to the doctor and to patients, will ultimately be a reflection of how the doctor communicates with staff.

We struck a cord recently when speaking on this topic at the OAO conference in Toronto:

Imagine that the doctor is getting ready to leave for the day. A staff member comes back and let’s the doctor know that an emergency has just walked through the door. The doctor’s reaction will be noted by the staff member, either subconsciously or consciously. If the doctor responded with frustration at being delayed, there is a high probability that the next time that a patient walks late or as an emergency, the staff member will exhibit some mild irritation. Conversely, if instead the doctor responds with concern and a willingness to help, the staff will more likely also exhibit that behaviour towards patients.

We encourage the offices that we work with to also share financials, as much as they are comfortable with, with their staff. It is vital that staff members understand that the practice is fundamentally a business and that there are some key performance metrics that need to be tracked and managed. Sharing this information is also quite useful and effective in Change Management. As changes are made in the office, it is important that staff see the results of their efforts.

While there is no magic wand—people will leave to pursue personal goals or move with spouses—paying attention to how you manage your staff and understand what motivates them will increase the likelihood of a happy and productive team.

 

CHRISTINA FERRARI

is the co-founder and managing partner of Simple Innovative Management Ideas (SIMI) Inc. and expert Practice Management contributor for Optik magazine. She can be reached at info@simiinc.com

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How to Avoid Hiring a Toxic Employee

Human Resources, Talent Acquisition

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No practice ever sets out to hire the wrong employee, but it still happens for a variety of reasons.

Unclear expectations, personality clashes, poor cultural fit, and a lack of suitable skills or training can lead to low staff satisfaction and high turnover. But what happens when a bad hire turns out to be truly toxic?

Toxic behaviour poisons the atmosphere, affecting everyone on the team.

Research reveals:

Having just one toxic staff member on a team of 20 makes the 19 “good” employees 54% more likely to seek employment elsewhere.

Prevent Problems Before They Start
By the time you identify toxic behaviour in an employee it’s too late; the damage to your team and your practice may already be done.

Prevent problems before they start by screening for red flag issues during the interview process.

Watch for these critical behaviours from candidates; each is a strong indicator of toxic personality traits:

  • Over-confidence and cockiness
  • Exaggerating skills and accomplishments
  • Rude or disrespectful behaviour towards those not involved in the interview: the parking lot attendant, receptionist, your office assistant, etc.
  • Arriving late for the interview
  • Badmouthing past employers and co-workers
  • Blaming others for poor results and difficult work situations rather than taking responsibility

Ask the Right Interview Questions
Asking the right interview questions is key to identifying potential problems. Don’t just settle for the first answer, which may have been prepared in advance.

Encourage candidates to give two or three different examples when answering each of the questions below:

  1. Describe three times when you had to deal with stress or conflict at work. What did you do?
  2. When have you failed at a task? Describe how you handled two or three different circumstances and what you learned from the experience.
  3. What kind of people do you find it most difficult to work with? Tell me about three different experiences in which you had to handle difficult people at your job.
  4. What three words would your former manager use to describe you?
  5. What three words would your former subordinates use to describe you?
  6. Describe three situations in which you showed exceptional leadership skills

Do Your Due Diligence
The best way to avoid hiring a toxic employee is to do your due diligence.

Check credentials and qualifications carefully and follow up with multiple references – both personal and professional.

As well, turn to your own network of sources who should know the candidate: former coworkers, past clients, or those in the same social circle as your potential hire.

As with the interview process, asking the right reference questions provides key insight into possible personality conflicts or areas where the applicant’s values don’t align with those of your practice:

  1. How well did he/she collaborate with others?
  2. How did subordinates feel about reporting to him/her?
  3. Did the candidate’s behavior ever reflect negatively on your organization?
  4. Would you re-hire him/her if the opportunity arose?

Screen for Fit First
There’s no way around it; hiring a toxic employee is a costly mistake.

The best way to avoid it is to attract the right candidates and screen for “fit” at every stage of the hiring process.

That’s why we created Eyeployment.com, a unique platform which uses cutting-edge behavioural science to help practices like yours take the guesswork out of hiring.

We identify the traits most critical for success in your position – and most likely to indicate potential problems – and pre-screen applicants for you. You’ll receive a detailed analysis for each candidate, ranking them in order of likely fit with your mission, values and specific position description.

We even provide a customized interview guide that tells you exactly what to ask each applicant to ensure they are the right fit for your role.

 

JAN G. VAN DER HOOP

Jan is the co-founder and president of Fit First Technologies, a company that applies its predictive analytics to the task of matching people to roles. Those algorithms drive platforms such as TalentSorter, FitFirstJobs and Eyeployment.com, which are relied upon by organizations to screen high volumes of candidates for “fit” in their open positions.

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Both USA and Canadian Retail Markets Consolidate

Differentiation | Business Strategy, Practice

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The Top 7 retailers with the largest US footprint, defied by the number of store locations, grew nearly 5% in revenue in 2017, while the number of store locations remained flt (down 0.1%).

Optik compared each country’s largest retailers and found that the level of store concentration in Canada has drawn closer to that of the USA due to the aggressive acquisitions by New Look Vision Group and FYidoctors in particular.

While Private Equity investment has been a significant driver in US market consolidation, the same phenomenon has not impacted the Canadian market so far. In Canada, direct foreign investment from France, UK and Hong Kong, has spawned new foreign entrants including Optical Center, Ollie Quinn and Mujosh, while new entrants from the USA, including Oliver Peoples (Luxottica), Warby Parker and Illesteva are pursuing the upscale fashion-forward opportunity in major Canadian urban markets.

Mass Merchants
Walmart and Costco alone account for 25% of the Top 7 sales and 32% of the dispensing doors. In Canada they collectively account for less than 25% of dispensing doors. While no grocery retailers made the USA Top 50 list, Canadian grocery giant Loblaw ranks fourth in national footprint.

The Top Canadian Retailer Report is coming soon! Optik plans a comprehensive Top Canadian Retailer Report later in 2018, including dispensing doors and revenue. Retailers are invited to download the survey and self-report sales in order to contribute to the Optik Top Canadian Retailer Report.

References/Références :
1 Vision Monday Top 50 Report May 2018
2 US doors are based upon Vision Monday Top 50 report. Total USA dispensing door estimates Jobson Medical Information LLC
3 Canadian estimates by VuePoint IDS Inc based upon publicly available data as of March 2018
4 New Look Vision Group Annual Report 2017
5 May not include all listed retail brands
6 Self-reported by group

 

MARK B. MATTHEWS

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Creating the Experience Consumers Expect

Practice, The Patient Journey

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Optometry has an advantage over many health care providers. Not only can optometrists diagnose issues, they are in the position to also provide the best solutions to meet the needs of their patients.

And one of the greatest needs of today’s patients is convenience. Online retailers have uncovered the patients’ desire to be presented with the option to have glasses delivered directly to the patient’s home. It is simply about convenience. While for some, convenience may fall into the “want” category, there are far more who value convenience as a need. Consider the situation for single parents, parents who both work, students who are going away for school, and so on. For them, having their glasses delivered right to their door is an invaluable time saver. If the glasses need adjustment, they can pop in when they have time.

Consumers are also seeking more transparency in the cost of eyeglasses. Many still seek a branded product but it is much harder to compete when they are readily available to shop in big boxes and online. Assuming that your service makes up for any price discrepancy is a mistake that will continue to erode your optical sales. Instead, create a pricing strategy and signage that easily allows patients to understand their options, including value priced and multi-pair savings.

With the introduction of the Smart Phone, there are few people who don’t manage much of their lives through these devices.  From booking appointments to receiving and sending texts about products and appointment times, the average consumer now expects this convenience. When selecting a restaurant, consumers Google to see what their choices are and often choose the restaurant that allows them to make a reservation online. It is just more convenient and saves time. Receiving a text that an appointment is coming up or that glasses are ready is far less intrusive than answering a call or listening to a voicemail. Patients prefer this experience. It can be a differentiator – a reason to switch offices and try something new.

As we help optometrists plan for and open new clinics, we spend a lot of time discussing what the experience will be like in their office. We keep our clients focused and coming back to the patient’s experience when they interact with the office. With so many choices, it is imperative that optometric practices seek to stay current and offer the experience that patients are drawn to; convenience, clearly articulated choice and use of technology to make interactions with the office more streamlined and efficient.

 

KELLY HRYCUSKO

is the co-founder and managing partner of Simple Innovative Management Ideas (SIMI) Inc. and expert Practice Management contributor for Optik magazine. She can be reached at info@simiinc.com.

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Step-by-Step: How One Practice Re-Branded Itself

Differentiation | Business Strategy, Marketing, Practice

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My practice is constantly looking for ways to enhance our patients’ experience and care, and our profitability. In 2014, we re-branded our services and business by closing two old offices, and opening one new, better office.

A brand is a promise you make to your patients. In our case, we wanted that promise to be that every patient leave our office happier than when they walked in. Happy because of our service, happy because of the care, and thrilled they chose us for their complete eye health care services. We embarked on a total re-brand. We changed everything, from location, office interior design, to staff.

Survey Patients
We started the re-branding process by surveying current and prospective patients. That process involved finding and surveying at least 50 patients who had returned two times within three years, and had referred someone to the office. In addition, I identified and surveyed 50 people I knew from my personal life, whom I thought I would enjoy having as patients, on what they would like to experience in an eyecare office.

We then surveyed all these people–both those who were already our patients and those we hoped would become patients–on virtually every aspect of the office including name, location, logo, colors and office flow. We wanted to learn what made patients happy, even happier, because they had visited our office.

Refresh Your Image
The survey data we gathered was invaluable for our design company, Eye Designs, LLC. My wife, who manages our practice, and has strong interior design abilities, spent weeks with Eye Designs choosing new carpeting, flooring, optical displays and wall colors. Meanwhile, I secured a new location, and worked on our logo, advertising and marketing strategies.

Start Anew
In 2014, our previous practice, which consisted of two locations, closed, and within months, we opened one new, re-branded office: New Era Eye Care. The costs of our re-branding were significant, with an investment upwards to $95,000, which did not include potential patients lost because of the changes. But the reward has been incredible. First, our practice metrics tell us our new patient base is increasing by more that 10 percent each year. Second, the patient base we had prior to the re-branding has stuck with the practice well beyond our projections.

We did a zip code analysis, and set a goal of 60 percent retention of patients for the zip codes that most of our previous practice came from. With our targeted patient communication and promotion, that number was exceeded, giving stability to our growth. New patients now account for around 20 percent of our annual visits.

Update Your Diagnostic Technology
In addition to re-branding our image and patient experience, we updated our diagnostic and business technology.

First, after exhaustive research and assessment, we purchased a newer electronic health records system. This effort led us to working with FoxFire Systems Group and their integrated EHR. This allowed us to more effectively, and easily, gather data to provide refined care and better marketing. For example, we could more easily spot the patients who would be good candidates for further testing, or products, so we could then be sure to educate patients about the new testing available to monitor their condition during their office visit, or we could send an e-blast to them advertising contact lenses or glasses that might appeal to them.

Our technology investments also made us more efficient. For example, our purchase of the Marco TRS-5100 Digital Refractor allowed us to see more patients per day, and to improve the quality of the patient experience. Not only is time saved per patient encounter, but the exactness of the refraction is apparent as judged by a patient satisfaction survey about their vision with their new spectacle prescription. Patients also continuously express pleasant surprise at the automation and time saved with this advanced phoropter and EHR integration.

The awe expressed by patients after experiencing the Marco TRS-5100 Digital Refractor provides a value that cannot be quantified. Further, the precision of the final refraction allows for truly excellent vision, a great reduction in remakes and, most importantly, happy patients. From the data upload to final refraction is 3-5 minutes, allowing for more than two patients more per day, which, in turn, generates an increase in revenue of $696. Our optical sales have increased each year at least 15 percent on average.

Click the image above to see the training materials Dr. O’Donnell provides to his staff.

Find New Staff Members & New Training
The third and most important improvement came with our investment in staff. Nothing can be more rewarding than leading an organization that has happy and well-trained staff. We’ve found that happiness comes from increased knowledge of eye health care, which yields more confidence in each staff member’s work, and an understanding of the practice’s long-term goals. Such well-prepared staff members are able to create the kind of patient experience that results in friends and family referrals.

We developed a systematic, step-by-step training process that each new hire is required to successfully complete before working with patients. The return on investment for that is having a team of staff members who can partner with us to serve patients on a level that well exceeds patient expectations.

We spend $1,000-$1,500 annually on staff training, not including continuing education and the expenses associated with sponsoring employees to attend conferences. It does include recruiting, paying potential new staff members a stipend while they’re in training, paying the trainer, and further continuing education when they become a member of the team.  This new-hire program is well documented, and remains as a reference manual for all staff members.  The new-hire program covers in a sequential format all basic office procedures, from how to answer the phone, to complex things like pretesting, optical/contact lens ordering and patient check out.

Provide Ongoing Staff Education
We hold monthly meetings, which include office education about new products, services and goals for improvement. One policy and procedure is reviewed at each meeting with open discussion for any confusion, or simply to review. A weekly a review is held with individual staff members to discuss potential problems, or issues that have already arisen.

The return on investment for our willingness to continually train staff is incalculable. Having staff members, who can easily answer any patient question, and feel comfortable providing correct answers, creates fast, efficient, friendly patient service. Further, staff turnover is now limited, and those who left noted in their exit interviews that they liked the training prior to starting their jobs with us. We gauge all staff performance on statistical analysis, and our numbers show that staff performance improves as they become better trained, with, for example, greater sales resulting from opticians who have been fully trained.

Re-Branding is a Constant Process
Nothing in our industry and society stays the same, so you either continually grow as a business, or decline. Our investment in an updated office design, new technology, staff recruitment and training, gives us the best chance of achieving continuing improvement of the patient experience, business growth and profitability.

 

BRIAN O’DONNELL, OD

owns New Era Eye Care in Shavertown, Penn. To contact: bod@neweraeye.com.

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Delegating Metrics to Staff

Finance|Wealth, Human Resources, Managing Others, Practice Metrics & Benchmarks, Resources

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Most optometrists that we speak to agree strongly that Metrics are essential for managing their businesses well. However, they all have the same challenge when it comes to implementation—time.  Managing a practice in between patients is difficult, if not impossible.

While moving to an automated system to generate Key Performance Metrics can save hours of time each month, it is also crucial to have these metrics reviewed and a plan developed based on the results.

As we have written in past articles, it is essential that the practice owner be involved in this process. However, it can also be effective to bring in an office manager or other trusted employee to help with the management and implementation of goals.

One of the metrics that we follow in SIMI Analytics is the mix of patients. For instance, of all the patients seen, what percentage are children, adults and seniors for each owner and each associate? We also follow how many new patients are seen by each OD. As time goes on, the older the practice, the older the patient base. It is essential that ALL ODs have a growing practice, not only the newer associates.

These are relatively easy metrics for staff to have control over and track the types of patients seen and the appointment codes booked. Many software systems allow the practice to colour code specific appointment times. Using this, the staff can create a colour grid to help them achieve their goal of an ideal mix.

Once they have filled, for example, the new patient spot for one doctor that day, they may choose to schedule the next new patient with another doctor to spread out the new patients. Once the doctor has established what their “perfect day” looks like, the team can colour coordinate the schedule to make that the goal. Of course, there will be exceptions, and a filled schedule is preferred to gaps in the day. On a monthly basis, the staff can review the metrics for that month to see how closely they came to achieving the ideal on an average day.

Another metric that staff can have a lot of control over is diagnostic capture rate. While it is the doctor’s recommendation that often influences the patient’s decision to proceed with additional testing, the staff can ensure that someone is always available to conduct the testing. Again, the staff can see the accumulative results on a monthly basis. Whether tied to a bonus system or simply used for intrinsic motivational purposes, staff owning the results can have a large impact on the performance of a practice.

There are a number of metrics that can be tracked in the optical to encourage staff ownership of the results. Progressives sales, sunglass sales and second pairs are all metrics that should be tracked, and preferably by the staff. When individuals track results, there is more likely to be a desire to have an impact on them.

 

CHRISTINA FERRARI

is the co-founder and managing partner of Simple Innovative Management Ideas (SIMI) Inc. and expert Practice Management contributor for Optik magazine. She can be reached at info@simiinc.com

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