Focusing on five key patient touch points improves care and revenue. Here’s how we used them to deliver outstanding care and build a $1 million practice.

Each year we focus on a BIG goal. Last year, our goal was $1 million in revenue–and in December we reached it. This year’s goal is to build on that achievement by meeting five key touch points with every patient visit.

Use Online Forms
We ask all patients on our web site and over the phone to go online and submit to us through our web site their patient forms. This allows us to make sure (before they come in) that their demographics and insurance information are correct. It also allows our technician to verify medications prior to talking to the patient. This has enabled us to identify diabetics and pre-verify their insurance for photos or any other testing that Dr. Thomas calls for.  This is a time-saver and the patient has no “surprise” charges at check-out, which creates good will and a great relationship between the patient and our practice.

One of our 2017 budget expansions is web site enhancements that will make it easier for patients to find the forms on our homepage, and then easier to fill out and submit to us.

Better forms means better information about patients, which means better patient care and revenue-generation opportunities. For example, being able to identify certain ocular conditions through medications on patient forms can result in additional testing. This, in turn, will have greater impact on per-patient revenue.

Discuss Daily Disposable Contact Lenses
We have challenged our technicians to discuss the option of wearing daily disposable contact lenses with each patient here for an exam who wears glasses. Educating a patient that they can wear contact lenses on an occasional basis will result in additional examination and fitting fees. And not only will this add to per-patient revenue, it will also benefit patients who have not thought about wearing contacts to a formal event such as a wedding or the big playoff football game! Enhancing lifestyle options is a win-win! Patients appreciate the lifestyle choice, it boosts per-patient revenue, as well as referrals to their peers!

Perfect Optical Hand-Off
The doctor’s EXAM is the most important touch point BUT the hand-off to the optical gallery staff is crucial. We are learning to advise the patient that “hasn’t had much change” that this is the year to add that desktop pair of glasses or that polarized sun pair! That partnering in communication with the doctor makes identification of patient needs more likely, which then results in more second-pair sales, and more sales of eyewear with AR and light adaptive lenses (Transitions or Sunsync).

First, the doctor walks the patient to the optical gallery and introduces the staff member who will be helping the patient: “Mrs. Jones, this is Dawn [one of our opticians]. She will be assisting you today.”

Second, he hands Dawn any demographic information (i.e. paperwork), and then goes over Mrs. Jones’ visual needs: “Mrs. Jones plays harp for her church, and needs a specific pair of glasses with a 36-inch correction to read music. She also needs a pair of every day glasses, as well as polarized sunglasses.” By that point, all three of Mrs. Jones’ prescriptions would already have been sent through our EHR, and would be ready for the optician to discuss.

Enhance Optical Service
We are filling the prescriptions from the doctor. But the patient has also now become the consumer/customer, and we have to respect that need just as much. It is our responsibility to not only feel the weight of delivering a medical device (or multiple medical devices), but to do so in a highly competitive consumer arena, delivering customer service that is second to none.

Our opticians are trained to serve both as style consultants, as well as experts on the the fit and making of the eyewear. We take time to continue the conversation started in the exam room by the doctor on the patient’s lifestyle, and the kinds of eyewear that will enhance their life. We also patiently advise them on matching eyewear to their personal style.

Our opticians add hand-written thank-you notes to each patient’s check-out bag that invite the patient to “Stay in Touch” – the flip side of the card asks them to “like” us on Facebook, and to follow us on Twitter and Instagram. This increases our reach through marketing, and keeps us top of mind, and easy to reach.

In addition, we are incentivizing opticians to provide improved service and to generate greater sales. We have created a monthly “Jingle Jar.” Every month we select a women’s line and a men’s line to have a small bonus on based on which optician generates the greatest sales. We have a $1,000 club.  When you have a patient who spends more than $1000 in the office, you get $20 in your jar

Enable Smoother Check Out
The patient experience has to be smooth as silk at this touch point. They say that you don’t have a second chance to make a first impression. I am here to tell you that when that patient came in, the first touch point was the first domino, then the tech was the second domino and so on…. If you have a negative experience at check-out, those dominos that you so carefully set up start crashing ! The last impression is what the patient carries out of the office as they go throughout the rest of their day.

We ensure the reception desk is always staffed, so that the patient is never left there waiting for an employee to return before they can leave the office. Our optical staff is cross-trained to assist front desk with check out, as well. Everywhere else in the office we have given our time and talents to the patient. This patient has selected our practice over 23 others that they could have chosen, and we truly feel honored.

This final touch point of check-out is when the patient “gives” to us. It must be a stellar experience that allows the patient to leave with the motivation to review us positively on our social media and refer us to friends and family.

  Stuart J. Thomas, OD, is the owner of Thomas Eye Center in Athens, Ga.Contact: StuTh2@vsp.com

 

 

   Ellen Byrum-Goad, LDO, is practice manager. To contact: Ellen.Goad@thomaseyecenter.com

 

 


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Website design standards? What the heck are those? Who determines them and how do they impact my practice website?

I don’t expect Optometrists to be expert web developers or coders, but there are some basic aspects of a website you need to consider when looking at your online presence. We are all consumers at heart and we all appreciate a good user experience when we travel around the web – our own practice websites should be no different.

Here are the top 7 website design aspects you need to consider for 2017.

1. Mobile:

We’ve been saying it for years now but a mobile friendly design that works across all devices is still this years number one factor. Over 65% of traffic to Optometry websites comes from mobile devices and as of March 2015, Google began actively punishing non-responsive websites moving them lower in search rankings, and positively ranking websites that are mobile friendly. To test your website use Google’s mobile testing tool.

2. SEO (Search Engine Optimization):

This helps search engines know what your website is all about, which helps your all important search ranking. Things like keywords in content, images with titles and descriptions and your proper locality information (name, address and phone number) – all are important factors to keep in mind.

3. Content Management System:

CMS’s like WordPress, Drupal etc. are powerful content publishing tools that allow you to quickly update and add content to your website without being beholden to your web designer. At the very least you should be able to add practice news or write a blog post on relevant content on your own. Google looks to see how often a website is updated and this is the easiest way to do that. If you cannot easily add content to your own website I suggest you have a serious conversation with your website designer / host.

4. Secure:

Who has access to your website? Who is responsible for the security of your website? Is it being updated frequently? Is it being backed up? Websites are being hacked and taking down all the time, you should talk to your web host to see what safeguards are in place in case disaster strikes.

5. Fast:

In 2015 it was mobile responsiveness, in 2016 it was speed and in 2017 – well get to that in a second! Speed matters, Google rewards faster sites with higher search results. According to Kissmetrics, nearly half of web users expect a site to load in 2 seconds or less, and they tend to abandon a site that isn’t loaded within 3 seconds. GTmetrix has a great tool that will analyze your site. It provides you with a ton of data but one number you should pay attention to is how long the homepage takes to load, see screen shot below.

 

eye care website speed

6. https://

Before your eyes glaze over, 2017 is the year that Google wants the web to become more secure. Https:// provides the little green secure lock icon in the top left corner of your browser bar (in Google Chrome), see screenshot below. Google will once again reward those that make their site secure and punish those that don’t. Talk to your web host to see if they can convert your site to this new standard. A few years ago you had to pay an annual fee for this service but there are now free / opensource options available such as Let’s Encrypt 

 

https:// for eye care webites

7. A Clear Call To Action:

People visit your site for some pretty basic reasons such as your hours, phone number and location. Make sure these elements are easily found on each and every page of your site. Try and position a click to call or request appointment button in a prominent place. The site below has a “sticky” button that does not move as the user scrolls, making it easy to request a consultation. Click here to see it in action.

 

CTA button for eye care websites

 

In summary, user expectations and behavior  are constantly changing. As small business owners with a web presence it is our job to keep pace with that. It doesn’t mean that you need a new website each and every year, far from it. All of the above items can be added to your existing site quite easily. I encourage you to reach out to your web designer to discuss these items and look at those which can easily be added. Back in the day, the outside of your practice was super important in attracting new patients, but your website is your new storefront and it needs the same care and attention that the outside of your practice does.

Dr Jeff Goodhew Optometrist

 

Dr. Jeff Goodhew, OD is co-editor in chief for Canadian Eye Care Business Review, he is also part owner of Abbey Eye Care in Oakville, ON. He has special interest in web design and digital marketing.

 

 


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Bryan Rossi is the General Manager of Carl Zeiss Vision Canada since July 2017.

A 15+ year industry veteran in the United States.

Bryan shares what is exciting him in the eye care industry,

and what he likes to do to unwind.

 

Bryan Rossi

General Manager Carl Zeiss Vision Canada

BSBA Finance, Ohio State University 1996

 

How did you get into the Eye Care business?

I was moving up in my career but becoming complacent within the financial industry. I vividly remember looking at Monster.com, sorting through 250 jobs and found one that sounded very interesting at Sola (now ZEISS). I received a call a few weeks later and the process began. About three months later I was hired as the first Regional Manger selling directly to the ECP. The people that hired me are still with the company today. We all have advanced our careers and continue to work on projects together from time to time.

What is currently the most exciting thing in your field that’s helping practitioners and patients?

The advancement of the optical lens and coatings. Backside freeform delivers better optics for the patients and creates an ease of use for the ECPs. We can deliver exceptional vision across a wide range of materials, which was more difficult with traditional atoric surfacing. The coatings have become extremely durable over the entire life of the lens and now have Blue Light protection as an option. These advancements are delivering better visual acuity and contributing to the overall health of the eye.

What business books would you recommend ECPs read?

Two books that are staples in my library are Good to Great by James C. Collins and Blue Ocean Strategy by Renee Mauborgne and W. Chan Kim. Both books have some solid principles and concepts on creating a productive work environment and using out of the box thinking. The business case on Yellow Tail® in Blue Ocean Strategy is quite a read.

Favourite pastime/hobby?

I enjoy many things, but golf is probably my favourite these days. It allows you to be outside enjoying the weather and can really tell you a lot about your patience. I’m looking forward to playing some of the great courses here in Canada.

Favourite Food?

I’m a little bit of a foodie and try to experience the local cuisine when I travel. I must admit, I haven’t had poutine yet. Every time I ask about it, people tell me it’s late-night food. I’m sure I’ll try it soon.

 


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DECIDE ON NUMBER OF SCRIBES & DUTIES

We currently have four scribes, each employed full time. We are constantly training staff to become scribes. All scribes begin in our office as pre-testers, and learn most of all by also working at the front desk. We found quickly that each job in our office (outside of optician) feeds on the others, and can become monotonous if that is the only thing you do. For that reason, we like to rotate our support staff between the roles of front desk receptionist, pre-tester and scribe. Those who excel at scribing, however, end up concentrating mostly on that task.

DETERMINE PAY SCALE

Our scribes are paid based on their ability to grasp each job role in our office. We begin with scribes hired to pre-test, and as their skill set increases, their pay increases. The highest pay for a scribe is when they can perform in all areas, including: checking in and out patients, pre-testing and scribing for the doctor. We also have them involved in other technician skills such as retinal photos, visual fields, genetic testing and other imaging.

Miamisburg Vision Care
Miamisburg, Ohio

Locations: 1

Doctors: 3

Support Staff: 16

Annual Exams: 6,000

Annual Revenues: $2.2 million

HIRE EMPLOYEES WITH POTENTIAL TO LEARN SCRIBING

We have long believed in hiring based on personality, and then training the skillset needed for each job role in the office, included that of scribe. It is impossible to train someone to become more friendly or to have abetter work ethic. It is much easier to train someone how to check visual acuities or record a medication list into an EHR.

IDENTIFY EMPLOYEES WHO WOULD MAKE GOOD SCRIBES

Scribes need few skills starting off, and the knowledge comes as they get more experienced. The primary characteristic of a good scribe is multitasking ability. This is why we prime employees for the job by having them work at the front desk before they train to become a scribe. If they are able to answer the phone and schedule a patient while checking another patient in, as well as dispense a contact lens order to someone else, they can handle the duties of chair-side scribe.

Another skill that is needed is the ability to be flexible and change pace. Often during the course of the day, the “typical exam” becomes anything but typical. The course of each encounter with patients varies, and the scribes need to understand what test is being done, and incorporate the data as the exam unfolds. The last skill, and most critical, is being very detail-oriented. Notes for patient encounters function in many ways, but primarily they are medical-legal documents and need to record the information as it happened. The notes also will be used to shape future encounters with patients, and to guide the care we give them. Capturing the small details ensures we have great continuity with our patient encounters, and that we address all the issues for each visit; not just at that one visit, but as a continuum.

IMPROVE EXAM EFFICIENCY

We initially looked at EHRs as a burden to efficiency since we were not used to working entirely online, so before we even added an EHR to our office, we added scribes. We trained a few staff members on the anatomy of the eye and common findings, and how to input that data into the EHR. The typical exam is about 15-20 minutes, and this has never really changed since adding scribes. Without scribes, the doctor is either making lots of exam notes after a patient leaves, or there is time added during the visit to note all the details needed for the EHR to be complete.

The scribe puts in over 95 percent of the information needed in patient’s EHR chart. On occasion, I may clarify something in the record or add to the information they put in. However, most of the time, the information inputted by the scribe is accurate and complete. The only things I need to do within a chart include: authorizing a glasses or contact lens Rx (and I like this as a double-check on accuracy), signing the records and writing letters–all of which I do on the fly with a touchscreen laptop that I carry from room to room. The scribe works on a desktop workstation in each room to input all the information, and I finalize most patient encounters before leaving the room with a few key strokes and button clicks.

IMPROVE DOCTOR-PATIENT INTERACTIONS

The key moment in my decision to add scribes to the exam room occurred when my daughter was seen in the Cleveland Clinic by a neurologist in 2009. This was my first experience with EHRs, and the entire time we were with the doctor he was facing his computer screen typing notes. He seemed very efficient, but rarely looked at us or our daughter. This, of course, was through no fault of his own, but the reality of charting on a computer. I considered a laptop and facing the patient, or taking notes and adding later, but the reality was that the volume of information that needs to be captured by the EHR is too big to not have a scribe’s help.

I am able to face the patient, perform needed tests, and frankly, examine the patient–not my computer screen. The interaction with patients even improved with scribes, as I so rarely even look away from them during the examination. My scribe gives me information from previous visits, so I don’t need to turn away to look at the chart. I don’t look at a screen more than a few seconds during the course of an exam–all my attention is on my patient.

ENSURE ALL SCRIBES WORK WITH ALL DOCTORS

Good rapport develops when the same doctor and scribe work together, but we have been bitten by only having one scribe work with one doctor when a scribe left the practice or was out sick or on vacation. We try to have the same scribe with the same doctor all day, but switch them to different doctors during the week to ensure all scribes have a good understanding of the workflow for each doctor, as well as differing terminology. We consider this cross-training. If a scribe can only work with one doctor, they do not add enough flexibility to our practice.

RELATED ROB ARTICLES

Scribes in the Exam Room: Patient Experience & Efficiency Enhancer

Getting on Track with the Medical Model: Patient Intake Process

Medical Eyecare: Expect the Unexpected

DR. DAVE ANDERSON, OD

Partner Miamisburg Vision Care, Miamisburg, Ohio

Dave Anderson, OD, is a partner withMiamisburg Vision Care in Miamisburg, Ohio. To contact: doca@burgvision.com


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Ahmos Henry is the President of Hoya Vision Care Canada.

Ahmos moved from the pharmaceutical industry to eye care over 13 years ago.

He shares with us what got him interested in eye care and what changes

he sees coming in the near future.

 

Ahmos Henry

President Hoya Vision Care Canada

EMBA Saint Mary’s University, 2008

B.V.Sc., Veterinary Medicine, Cairo University, 1987

 

How did you get into the eye care business?

My career in the eye care industry started by sheer coincidence! After many years in the pharmaceutical field, I happened by chance to meet a friend at an eyewear trade show (MIDO Eyewear Expo) that his company was participating in. I was completely fascinated by the unique combination of science and fashion. Innovation and fun radiated throughout the entire show and I immediately knew that I wanted to work in the vision care field. When the opportunity came, I pursued it passionately until I got in. It has been over 15 years and I have never regretted my decision, nor do I want to join any other industry! I love what I do, enjoy working with my team, and embrace the many relationships formed with Eye Care Professionals (ECPs) over the years.

What changes to eye care do you see coming down the pipe?

I see differentiation to be more important for independent ECPs as they fight for a more ethical and professional patient eye care experience. I praise the Optometrists and Opticians’ associations in Ontario as they stand for providing patients with proper education and dispensing. An example of this is when they took legal action against online vision care product providers and were rewarded by settling their grievance.

What is something you plan on implementing in your business this year?

Hoya has already launched some exciting “first to market”, innovative products and services this year and are currently planning to launch more over the next few months. Some of these include, a national offer for independent ECPs who are looking to differentiate themselves in the market. These products include the Sensity Dark and Sensity Shine photochromic lenses, as well as the revolutionary redesign of Hoya’s most popular LifeStyle progressive lenses.

What is something you have done in your business to set you apart?

We have done numerous things to set Hoya Canada apart. We pay special attention to our team and through the implementation of our “Core Leadership Values” we focus on “integrity,” “innovation”, “treating each other with dignity and respect”, and being “passionate about winning”. Reading about them is one thing but if you come to visit our facilities you will see a difference in how we communicate. It is refreshing to see a manufacturing facility run with these values as the cornerstone of operations.

What was the last gift you gave someone?

Ironically, I came across an excellent Spanish red wine by the name of Hoya. I just gave it to a friend of mine and she was happily surprised!

Tell me something few people know about you?

Very few people know that I received my Executive MBA at St. Mary’s University in Halifax with a focus on the optical industry. I was totally fascinated with all its aspects from manufacturing, sales and marketing, and even human resources! The pinnacle of this experience was my graduation thesis which was a comprehensive business plan for a full-service optical laboratory in Canada.

Describe your perfect day.

Believe it or not, every day I go to work is a perfect day! I am alive, well, happy and healthy. Furthermore, I go to work knowing that Hoya helps thousands of people see better and live better. Because of what we do, thousands of people EVERYDAY avoid an accident, excel at school, enjoy their lives and loved ones, do better at work, and the list goes on!

 


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Optometry Giving Sight is the only global fundraising initiative that specifically targets the prevention of blindness and impaired vision due to refractive error. Our aim is to help the more than 600 million people who are blind or vision impaired simply because they do not have access to an eye exam and a pair of glasses. Optometry Giving Sight funds the solution by supporting programs that deliver vision care, train local eye care professionals and develop infrastructure.

We fund sustainable development projects which support the goals of VISION 2020: The Right to Sight. So far, more than US$10 million in funding from donors and sponsors had been disbursed to 97 projects in 39 countries throughout Africa, Asia and Latin America.

Established in 2003, Optometry Giving Sight is a joint initiative of the World Council of Optometry, the Brien Holden Vision Institute and the International Agency for the Prevention of Blindness. Optometry Giving Sight is currently raising funds in Canada, Australia, USA, Ireland, the United Kingdom, Italy, Norway and Singapore.

Optometrists are eliminating refractive error blindness and vision impairment – simply the need for an eye exam.

Raising funds…

  • By inviting regular monthly or annual donations;
  • By inviting optometrists and their practices to participate in one of our appeals, such as the World Sight Day Challenge or other fund raising activities;
  • By inviting optometrists to “Tick Yes to OGS” on their annual association dues renewal invoice;
  • Through optometry industry corporate sponsorships and donations by their employees;
  • Through patients making donations;
  • Through general donations at givingsight.org.

Funding programs…

We distribute funds to partners who implement projects that ensure sustainable, lasting results in three ways:

  • Train – local eye care professionals and;
  • Establish – vision centres for sustainability to;
  • Deliver – eye care and low cost glasses.

OPTOMETRY GIVING SIGHT

For More Information about OGS in Canada please contact Corrine Waldon as follows: B110 – 4 Parkdale Cresent NW, Calgary, Alberta T2N 3T8, Canada Tel: 1-800-585-8265 ext 4 Tel: +1 403-670-2619 Fax: +1-888-425-7296


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One of my favorite expressions is “measure twice and cut once!” These words of wisdom have been a mainstay of the construction industry for years. If you double-check your measurements, it is less likely that errors will occur and the business will be more profitable.
This business philosophy can also apply to an optometry practice. It is important to measure the financial key metrics of a practice in order to maximize the NET income and ensure an efficiently run business.
Here are the Hayes Center for Practice Excellence’s 7 Key Financial Metrics and how my practice has benefited from measuring and monitoring these financial benchmarks.
How do you measure the 7 Key Metrics?
The use of a computer financial software program has made the reporting of financial metrics much easier. We use QuickBooks by Intuit for all of our bill paying and deposits. At the end of each reporting period, my business manager generates a profit and loss statement with “percentages of gross income” selected in the reporting criteria section. Some initial work is required to set up the categories in QuickBooks based on deposits and payments to vendors and suppliers during the reporting period.

IDENTIFY KEY METRICS

 

ET SPENDING GOALS

Cost of Goods Sold COGS (26 percent-32 percent) – The Cost of Goods sold category is always the highest single expense in a traditional optometry practice. The following items should always be included in your Cost of Goods:
• Lab bills, blanks, uncut lens blanks
• Frames and cases
• Fair allocation for lab floor space
• Lab equipment, edger, surfacing equipment, dye unit
• Pro rata share of optician’s salary (excluding labor as a COGS is a common mistake)
Staff Expenses (18 percent-24 percent) – The second largest expense for traditional practices is what it costs to employ and support your staff. Staff expenses does not include the salaries paid to employed ODs; that goes under Doctors’ Net Income. Staff expenses also does not include wages for lab employees who cut, edge or surface lenses. Those wages go under the Cost of Goods category. Staff Expenses includes the following:
• Salaries
• Payroll taxes
• Uniforms
• Insurance
• Continuing education and other training
Occupancy Costs (5 percent-8 percent) – If you own your building, treat yourself as the landlord and your practice as the tenant who rents from you. Be sure the practice pays you fair market rent even if the building is paid off. Otherwise, you will be personally subsidizing the overhead of your practice in our profitability model.
While rent and interest are tax deductible, principal payments are not. The total you are spending to occupy your office is what counts, not how much you write off. The following are all considered occupancy costs:
• Rent
• Property taxes
• Utilities
• Maintenance
• Janitorial
• Insurance (property)
Examination Equipment (3 percent-5 percent) – Your examination equipment includes not only the equipment, but also the expenses associated with the equipment such as:
• Leases
• Interest on Loans
• Depreciation
• Service Contracts
• Maintenance
Marketing and Promotion (1 percent-2 percent) – Marketing expenses are highly discretionary. Interestingly, low-netting practices tend to spend more on marketing than high-netting practices. However, this does not mean that low-budget advertising is the way to go. The effectiveness of low-budget advertising is questionable. Things you should include in marketing and promotion are:
• TV, radio, and newspaper advertising
• Direct mail advertising
• Yellow Pages listings (However, this cost is often lumped in with the phone bill.)
• Web site
• Recall Services
• Web Review Site fees (Yelp, etc.)
General Office Overhead (6 percent-9 percent) – This category will include all other expenses you have for running your practice. It should include things such as the following:
• Front office equipment
• Phone
• Postage
• Legal fees
• Accounting fees
• Dues
• Subscriptions
• Insurance
• Office Supplies
Doctor’s Compensation (30 percent+) – The last item on the Hayes Seven Key Expenses is doctor’s compensation. Hopefully, this will be your largest percent of gross. This compensation would include:
• Salaries for the owner and any employed ODs
• Heath Insurance and Other Benefits
• Corporate Profits
• Pension and Profit Sharing
• Personal automobiles
• Cell Phone

SET PERFORMANCE GOALS

What made you change the way you look at your practice finances?
One of my job responsibilities at Southern College of Optometry is Director of the Hayes Center for Practice Excellence. I teach current and future optometrists the business side of practice. This provided me with the opportunity to enter into a Master of Business Administration program at a local university. My practice was struggling with its profitability and I was also looking for answers. The completion of the MBA degree taught me how to better manage the business side of my own practice. I can now share this knowledge and my experiences with students and fellow practitioners.
What are some of the variables that can affect the key metric percentages?
The first variable to look at is your fee structure. If fees currently charged for professional services, as well as materials, are too low, then the resultant key metric percentages will be significantly affected. This may signal the need to raise fees to compensate for increasing costs and expenses. Our practice had gotten complacent over a 3-4 year period and did not raise fees. This resulted in a steady decline in our NET income. We initiated a review of our current fee schedule and raised our professional service fees over a two-year period. Ophthalmic material fees were also adjusted where needed.
The other variable to examine is expenses. As mentioned in the breakdown of the Hayes 7 Key expenses, Costs of Goods sold and staff expenses are the two biggest expense categories. I personally feel that a staff that is efficient and productive should be well compensated, so I don’t have a problem with staff expenses being on the high side of the 18-24 percent range. Our staff expenses are 24 percent and they are very dedicated and hard working! Assuming the practitioner is doing a good job managing their operating expenses such as occupancy costs and equipment expenses, COGS is the category that deserves the most attention and can have the greatest impact on your bottom line.
What about Managed Care?
There is no doubt the increase in the number of managed care vision plans has affected the profitability of many optometry practices. Lower reimbursements can translate into lower collected gross receipts and lower NET income for the doctor. There are ways to battle this giant! Increased use of staff delegation and improvement in patient flow through the office can result in improved efficiency, and thus, more patients can be seen during the work day. But other changes may be needed to maximize the practice NET income. Better optical material purchasing decisions along with policies controlling other office expenses need to be in place. We scrutinize all purchases in the office and compare prices before a decision is made. We also use a manageable amount of good debt when purchasing major equipment and make lease hold improvements. By measuring the key financial expenses regularly and running your practice like a business, managed care can be beneficial to many optometry practices.

How did measuring your practice improve the bottom line?
After setting up our QuickBooks accounts and measuring the expense categories, we found our COGs percentages were significantly out of line with the Hayes Key Metric suggested goals. We made a change in our office manager and frame buyer and empowered a new trusted employee to correct the COGS problem. By doing this, our office reduced the COGS percentage in a short period of time. Our new office manager/buyer was given a budget and began the task of reorganizing the frame inventory and examining the ophthalmic lens and contact lens expenses. She eliminated some of the frame companies that had poor customer policies and this allowed us to increase our bargaining buying power. Our new office manager also attended education courses on frame board management and merchandising. Negotiations with ophthalmic lens suppliers also helped with margins. Contact lens purchases were more closely monitored and product returns expedited in a timely manner. In other words, the entire practice mentality changed and resulted in a significant increase in the net income.
How was your new office manger compensated?
Part of the new office managers/buyers salary compensation package was a merit-based bonus based on the improvement in the NET income. As a result she received a sizeable bonus, but more importantly, the doctor’s NET income was significantly improved.
Improve YOUR Practice’ s Profitability
I would make a couple of suggestions to my colleagues. Enroll in a business course at a local college or university. This additional course may provide a fresh new way to look at the financial health of your practice.
Another helpful change I made in my practice was joining an optometry peer group. It allows for the sharing of practice ideas and additional practice management education. I would strongly recommend a practitioner join one of these groups.
But the most important suggestion I can make is measure and measure again! Take the time to set up a financial software program and begin to measure the Hayes 7 Key Financial Metrics. You may discover an expense category that needs addressing or maybe that fees need to be increased. You won’t know this unless you take the time to measure the metrics and evaluate them!
If you measure these key metrics, you may be surprised to find out how successful or problematic your practice may be. Even if your efforts increase the practice NET income by 1 percent, the profitability of an average $600,000 practice will increase by $6,000….and no one would be upset about that!

Related Review of Optometry Articles

Advice for New and Experienced ODs: Understand Essential Business Concepts
Getting There: Planning a Successful Optometric Career
Practice By the Numbers: Track Your Key Expenses

GERALD A. EISENSTATT, OD, MBA,

GERALD A. EISENSTATT, is director, Hayes Center for Practice Excellence, at the Southern College of Optometry. Dr. Eisenstattalso is the owner of his own independent practice, Memphis Family Vision in Memphis, Tenn. To contact him: geisenst@sco.edu


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This final article of our three-part series on important benchmarks ODs need to monitor, looks at chair cost and expense ratios. All six benchmarks discussed in this series were pulled from a VisionWeb discussion of eight metrics optometric consultants Gary Gerber, OD, and Steve Sunder, of VisionWeb, deemed as important metrics to be tracked on a regular basis.

When we break down these benchmarks, we look at data drawn from the Management & Business Academy (MBA),a research program sponsored by Essilor. Over seven years, MBA gathered performance data from more than 1,800 optometric practices across the US. It has published the most comprehensive compilation of benchmarks currently available. You can visit mba-ce.com to access the MBA metrics research.

In total, the benchmarks covered in this series have included:
• Gross Revenue per Patient
• Gross Revenue per Staff Hour
• Optical Capture Rate
• Inventory Turnover Ratio
• Chair Cost
• Expense Ratios
If you want to monitor these benchmarks, plus two bonus benchmarks, in your own practice, you can download VisionWeb’s e-book HERE.

Chair cost is an important metric for independent ODs, providing one basis to establish professional fees and make judgments about which managed care plans to accept. There are a couple different ways to look at chair cost. You can determine chair cost from the total number of annual visits, or total number of annual exams.
Formula 1: Fixed Costs / Complete Annual Exams = Chair Cost per Exam
MBA Example: $260,876* / 2,156 = $121 per Exam
Formula 2: Fixed Costs / Complete Annual Patient Visits = Chair Cost per Visit
MBA Example: $260,876 / 2,598 = $100 per Patient Visit

The first thing you need to do in order to determine your chair cost is to calculate your fixed costs. You can calculate your fixed costs by subtracting your operating expenses, your doctor payroll, and your net, from your gross income. From there, you will divide your fixed costs by the number of complete annual exams, or annual patient visits, to get your chair cost.
MBA norms calculate a chair cost of $100 per patient visit. The most important thing here is making sure that your chair cost is lower than your insurance reimbursement.
*Fixed costs were determined by this formula: Gross revenue minus OD compensation minus Net minus COG.
MBA norms calculate a chair cost of $100 per patient visit. The most important thing here is making sure that your chair cost is lower than your insurance reimbursement.

METRIC #2: EXPENSE RATIOS

Monitoring expense ratios helps ECPs develop annual budgets and evaluate opportunities to raise net income by reducing expenses. The MBA has published expense ratios for the major expense categories that all independent ODs face.
The Formula: (Expense / Revenue) x 100 percent = Expense Rate to Revenue
MBA Example: (Cost-of-Goods): ($191,323 / $659,736) x $100 = 29% of Revenue

Typical expense ratios vary by practice size. In general, larger practices have somewhat lower ratios for cost-of-goods, occupancy, and general overhead expenses, but somewhat higher staffing ratios. The result is that larger practices, on average, enjoy net income ratios 10-15 percent above the median for all practices.

THOMAS F. STEINER

Thomas F. Steiner, Director of Market Research for ROB, has spent more than 25 years helping eyecare practices succeed, including pioneering the introduction of color contact lenses into optometry. To contact him: tnlsteiner@comcast.net


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One of the most important management tasks in any eyecare practice is routinely tracking practice performance. Keeping a close eye on key metrics can reveal the successes, failures and opportunities. As CEO of your practice, you need to be on top of the financial health of your practice, and take corrective action to improve the areas of your business that may be falling behind compared to others. This is where key metric monitoring comes in.
VisionWeb produced an e-book, authored by Gary Gerber, OD, of the Power Practice;and Steve Sunder of VisionWeb, that includes eight key metrics deemed the most helpful in measuring the performance of independent optical practices. Their eBook, 8 Benchmarks ODs Need to Monitor in Their Practice, comes with a downloadable excel sheet that does all of the math for you! The eBook can be downloaded HERE.

METRIC 1: REVENUE PER PATIENT

Revenue per patient is calculated in a few different ways, depending on if you want to determine revenue per comprehensive exam patient, or revenue per all patients (including medical eyecare treatment patients). Let’s take a look at both formulas below:
The Formula: Gross Annual Revenue / # of Annual Exams Performed = Revenue/Patient
*MBA Example: $659,736 / 2,156** = $306
OR
The Formula: Gross Annual Revenue / # Total Patient Visits = Revenue/Patient
MBA Example: $659,736 / 2,598*** = $254

The national performance of ODs on this metric is very slowly increasing, through inflation and the gradual increase in dispensing of new technology products. On top of that, there is considerable variation in gross revenue per exam across practices. The most productive 10 percentof practices see revenue per exam nearly two thirds higher than the median (see table below).

*MBA example numbers are based off MBA norms. MBA has not directly measured gross revenue per medical eyecare visit, but available data suggests that the average revenue per medical eyecare visit is roughly comparable to that from an eye exam visit.
**Assumes 1.1 complete exams per hour for ODs working 1,960 hours annually (49 weeks at 40 hours per week).
***Assumes 2,156 complete exams and 442 medical eye care visits (17 percent of total visits).

Shown above in the chart are MBA (US data) norms: The median is $306, but the goal to aim for is the higher amount achieved by the75th percentile of all OD practices in the database. The highest percentile achieves an even higher revenue figure.

Improving Your Gross Revenue per Exam

If your practice is falling below the median, there are opportunities to increase revenue per exam with little or no cash outlay through office practice changes. Many variables can impact gross revenue per exam, but ODs should focus on the following to help increase revenue per exam:
• Average eyewear sale/dispensing ratios for premium lenses and frames
• Eyewear capture rate
• Professional fees
• Eyewear retail pricing
• Multiple eyewear purchase ratio

METRIC 2: REVENUE PER STAFF HOUR

Monitoring revenue per staff hour will help you evaluate the efficiency of patient management by your staff, and can signal if your office is over- or under-staffed. The median staff hours and revenue in this calculation can vary depending on the time period you want to measure. Here we look at annual hours and revenue, but you could also measure this on a monthly basis.
The Formula: Gross Revenue / Annual Median Staff Hours = Median Revenue/Staff Hour
MBA Example: $659,736 / 7,949**** = $83

****Equivalent to four full-time staff members.

Revenue per staff hour is weakly correlated with practice size, and the norm for this benchmark hasn’t changed in over seven years of measurement! Sixty percent of practices have a revenue per staff hour ratio between $70 – $100. If you’re getting a revenue per staff hour over $100 you should review your workflow and determine if staff additions would improve patient service. On the other hand, if your practice is suffering from a low performance on this benchmark, it could be from:

• Over-staffing
• Low revenue per complete exam
• Active patient base too small to support staff
• Staff hours to OD hours ratio of five or more – indicative of an inefficient patient service process

Related ROB Articles

Top Metric to Track: Eyewear Rxes per 100 Complete Exams

Top Metric to Track: Complete Exams per OD Hour

Top Metric to Track: Gross Revenue per Complete Exam

THOMAS F. STEINER

Thomas F. Steiner, Director of Market Research for ROB, has spent more than 25 years helping eyecare practices succeed, including pioneering the introduction of color contact lenses into optometry. To contact him: tnlsteiner@comcast.net


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There are two important metrics that ODs should be monitoring in thedispensary: Optical Capture Rate and Inventory Turnover Rate. We’ve pulled these metrics from a recently published discussion, by VisionWeb, of eight metrics that optometric consultants Gary Gerber, OD, and Steve Sunder, of the VisionWeb team, consider the most useful diagnostic tools for independent ODs. Their e-book, 8 Benchmarks ODs Need to Monitor in Their Practice, comes with a downloadable Excel sheet that does all of the math for you! The e-book can be downloaded HERE.
In order to present the data for these metrics, we have drawn numbers from the Management & Business Academy (MBA) – a research program sponsored by Essilor. Over seven years, MBA gathered performance data from more than 1,800 US optometric practices. It has published the most comprehensive compilation of benchmarks currently available. You can visit mba-ce.com to access the MBA metrics research.
While the first article in this series discussed two key revenue metrics every practice should be keeping track of, this article will present two key metrics ODs should be monitoring in their dispensary.

OPTICAL CAPTURE RATE

Showrooming has become a big problem for many eyecare practices. Patients are coming in and trying on frames in your dispensary, only to go home and make their frame purchase online. Evaluating this metric can help you determine if your practice is falling victim to showrooming.
You can look at this formula two different ways. Adding the results of these two formulas should give you 100 percent of your patients given a prescription. Let’s take a look:
Formula 1: Number of Patients who Filled their Prescription in your office / Number of Patients given a Prescription = Optical Capture Rate.
MBA Example: 44 Filled Prescriptions / 68 Prescriptions Given = 65% Capture Rate

OR
Formula 2: Number of People who didn’t Fill their Prescription / Number of Patients given a Prescription = Walkout Rate
MBA Example: 24 Unfilled Prescriptions / 68 Prescriptions Given = 35% Walkout Rate

Industry data, based on consumer surveys, indicates that independent ECPs perform 68 percent of all exams given, but sell only 44 percent of frame units. That’s how we got to the numbers used in the MBA example above. Close to one in three patients of typical independent ODs take their eyeglass prescription to be filled somewhere else, and this walkout rate represents a large loss of revenue for ECPs.
The MBA surveys also indicated that many ODs grossly underestimate the true walkout ratio of frame purchases by their patients. And relatively few ODs are taking the time to track their capture rate. While it’s uncertain for sure that all patients who don’t purchase frames from you are purchasing from another vendor, you can gain a reasonable estimate by tracking the number of frames dispensed and the number of Rxes given.
Survey data shows that patients take their eyewear Rx elsewhere, usually to a chain provider, for perceived reasons including:
• Lower price
• Better selection
• Better assistance from greater expertise of chain opticians
• More attractive merchandising of frames
• Greater focus of chain retailer on selling eyewear
If you’re unhappy with your practice’s capture rate, these are the areas you should be focusing on in your dispensary.

METRIC #2: INVENTORY TURNOVER RATE

Measuring inventory turnover rate in your dispensary is a simple metric to monitor, as most practices have easy access to the variables: number of frame sales in units and number of frames in inventory over the same period.
The Formula: Annual Frame Unit Sales / Number of Frames in Inventory Annually = Inventory Turnover Rate
*MBA Example: 1,603 / 890 = 1.8 Inventory Turnover Rate

Inventory turnover is highly correlated with practice size, so a single benchmark for all practices can be hard to determine. The median practice, measured by MBA, has an annual inventory turnover rate of 1.8, while practices grossing over $3 million had an annual turnover of three or more.

Larger practices have a higher turnover because a majority operate single locations and are able to offer patients more choices without increasing the number in inventory proportional to their volume differential, over smaller practices.
Keep in mind, a high frame turnover is not always a desirable goal. Frame turnover can be kept high if you have limited options available, which might be the case for higher-end dispensaries. But, having lower inventory can lower your eyewear capture rate. Typical ECPs carry 5-10 percent fewer frame options than they should to optimize patient selection.

Action Points to Fine-Tune Frames Inventory

Assuming your practice offers sufficient selection, a higher turnover can be achieved by:
• Regularly monitoring turnover of each frame and frame brand, and eliminating the number of frames with no unit sales in 12 months and slow-moving brands.

• Eliminating duplicative product lines.

• Limiting the amount of frames in storage and not on display to less than 5 percent of total inventory.

 

Related Review of OptometryArticles

Key Benchmarks to Track for Practice Profitability

Key Revenue Metrics for Independent ODs: Revenue Per Patient & Revenue Per Staff Hour

Top Metric to Track: Eyewear Rxes per 100 Complete Exams

THOMAS F. STEINER

Thomas F. Steiner, Director of Market Research for ROB, has spent more than 25 years helping eyecare practices succeed, including pioneering the introduction of color contact lenses into optometry. To contact him: tnlsteiner@comcast.net


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