(As printed in Eyecare Business, November 2016)
I call it The Tale of Two Practices. One practice is experiencing a decline in patients, while another a few blocks away doesn’t have an empty slot for months. One practice is turning one third of its staff over every year, while another keeps its staff for decades. One practice has a toxic work culture, and another has a staff on fire.
Another example is two doctors in the same practice (as in, inside exactly the same walls, same staff, same products, same managed care plans) have a revenue-per-patient that’s $200 different (I see this one a lot). One $2 million practice is netting 36%, and one’s netting 10%. One practice for sale sits on the market for years and settles for selling the records, while another is sold in a month and brings a premium. So what’s the point? Simple. You control all of these outcomes.
Not Obamacare. Not third parties. Not the economy. Not the competition or the Internet. It is YOU that controls these outcomes. Here’s how.
DON’T BELIEVE THE HYPE
As we work with practices day in and day out, it’s plain enough to see the vast differences in outcomes from one practice to another. More so today, I think, than ever in my nearly 30 years working with practice owners.
As we kick off this new column about Surviving in a Managed Care World, it is of the utmost importance that we keep this in mind. Having lectured coast-to-coast these past few months, I conclude that many colleagues have been duped.
They are convinced in earnest that they’ve lost control of these and related practice outcomes. This trickery, I’m certain, is becoming a self-fulfilling prophecy for many colleagues, and this, in itself, is the greatest contributor to some private practices making the endangered species list.
That’s not to say our managed care world doesn’t pose challenges. Dwindling revenue-per-patient, increased regulation, compliance concerns, Meaningful use fears (and fear mongering), the see-saw regarding government health programs (are they here to stay, will they be repealed?), etc., etc., etc. Every practice owner is experiencing these challenges; but there are amazing differences in how they are being met, and in the results practices are experiencing.
Controlling Your Own Outcome
Again, the simple fact is we DO control our outcomes. We always have, and we still do (provided we choose to). Here are a few evidences of that from conversations of late:
- A New Mexico practice is celebrating 25 years, and seeing 20% growth (that’s better growth than many practices only open five years!)
- A Wisconsin practice did over $2 million again last year and still takes no vision plans (in the heart of managed care country). It’s true.
- A Montana practice is breaking ground on its third addition of thousands of square feet, after 25 straight record years, despite Costco’s best efforts down the street.
- A practice in Missouri is seeing its staff ON FIRE after implementing a new profit-sharing plan, experiencing its best doctor day production in a decades-long history.
- A practice in New York will be selling for a premium shortly, after putting together a string of its best three years of profit in a row.
- A practice in California had gross billings of nearly $3 million on one doctor before adding its first associate.
- A practice in Indiana signed up enough companies on its own vision benefits plan that it dumped all of its least-liked third party plans.
- A practice in Florida has returned to record production after several consecutive years of practice recession.
- A practice in Oregon has tripled its medical optometry revenues in the last few years.
- A practice owner in Colorado recently proclaimed, “Owning my practice is fun again,” after tackling a number of employee issues and reducing her work week.
There is, of course, the doom-and-gloom crowd that believes private practice is on borrowed time. But this is not my experience at all—I’m talking to our colleagues, every day, and yes, there are plenty of challenges. But we can choose to control the outcomes.
And, as far as third-party plans, the more things look the same (managed care), the greater the opportunities for the creative to be different. Even in this managed care world, we can and will implement initiatives to control growth, revenue-per-patient, patient retention, new patients, staff productivity, inventory turnover, no shows, profitability and yes, life balance in practice ownership.
Executive Vice President
Email Tom Bowen