By Maria Sampalis, OD
Oct. 18, 2017
Caring for our patients is our first practice priority, but our second should be keeping our business healthy. I’ve learned that it’s easy to overlook simple ways to increase revenues. Here are key adjustments I’ve made over the years to add to my bottom line. I estimate that my practice netted about 30-35 percent of gross revenues after making all of the following improvements.
Know Your Chair Cost
Knowing your chair cost is critical for your business. If your chair cost is $60 a patient, and a managed care plan pays $40, then you lost money on that patient. Do the math: chair cost per patient = fixed cost / # of patients. Once you determine what your fees should be, then you can change what you charge.
Evaluating chair cost, and your insurance reimbursement levels, will help determine the price range your service fees and products should fall within. Take into consideration your patient demographic and your competitors within a 7-10 mile radius, including corporate locations and ophthalmology offices. For example, after evaluating chair costs, and the cost of my time, I increased fees for specialty contact lens fittings.
Potential Revenue Gain: $2,000-$5,000 annually
Do Not Give Discounts
You do not want to be that office that allows patients to think that you discount because then they will want it all the time, and come up with stories, and excuses, for you and your staff to give them a break on pricing.
Potential Revenue Gain: $2,000 annually (could be more depending on the discounts you’ve been offering)
The ROI on technology is incredible if you have enough patients. Don’t miss the opportunity to make your practice a provider of advanced medical eyecare. In addition to enhancing care, medical technology can make your office more efficient, allowing you to see more patients, and to diagnose and monitor eye conditions and diseases.
I added a retinal camera four years ago, and the investment has benefited both my patients, and my profitability. The camera cost around $20,000, with a payment of $450 per month, which I paid off in three-and-a-half years. The reimbursement for use of the camera is $90, so all I needed was five patients per month to pay the $450 monthly payment.
Potential Revenue Gain: 6-10 patients a month = $450/month; >10 patients/month = $900
Small Scheduling Adjustments to See More Patients
See more patients an hour, and make sure to add 2-4 hours a week of administrative time to evaluate your business.
I am in the office five days a week, but not for the same hours each day. When necessary, I come in late and leave later, or do just the reverse, and schedule patients earlier in the day, and leave earlier. As long as you make yourself available enough to accommodate the needs of your patient base, your practice won’t suffer from a schedule that allows the doctor to plan in advance to meet the needs of her obligations outside of work.
Potential Revenue Gain: About $20,000 annually
During both slow, and busy, times of the year, a cross-trained staff is helpful to efficiency and patient service. Combining job roles means maximizing your employees’ time. In slow times, it allows you to have fewer staff members in the office. If everyone knows how to do everything, then not everyone has to be in the office on a slow day. On a busy day, having a staff that knows how to do each other’s jobs means any staff member who is available can step in at any time for any other employee who has their hands full.
Potential Revenue Gain: Save one potential part-time staff salary of $15,000 annually.
Improve Insurance Processing & Billing
Delegate a single person to bill all insurances, and follow-up on payments and billing patients on outstanding bills. With EHR systems, it has never been easier to monitor and track payments.
It can be difficult collecting payment after services are rendered, and the effort and time to do so is tremendous. One solution is to verify all insurance coverage ahead of time, when the patient books their appointment, and to ask for payment at the time of the visit, or keeping a form of payment, like a credit card, on file.
Potential Revenue Gain: $5,000 annually on claims, but could be more depending on size of your practice.
Join Buying Groups & Ask Vendors for Discounts
Buying groups provide vendor discounts based on volume. This allows an independent to benefit from volume-based discounts by joining together with other independents who are purchasing the same products.
Don’t forget to talk to the contact lens reps, whose products you heavily use, to see if there is a reward program for practices that purchase at a certain level. Vendors often are open to discussing a reward for loyal customers. Don’t assume your volume of purchases is not enough to have that conversation.
Potential Revenue Gain: Depends on practice volume, but could save you at least $10,000 annually.
Evaluate Your Business Operation Costs
What are your credit card processing fees and contract? What is your overhead? Are you able to negotiate your phone bill or internet fees? You may be surprised at how much money is needlessly spent each month on services you could get for less by doing research online, or by asking peers for recommendations.
Potential Revenue Gain: $200 monthly; $2,400 annually.
Assess Money Spent on Office Rent
Negotiate your rent, find out what the average cost per square foot is in your area, and determine if you are within an acceptable range. If not, moving to another, maybe better office can lead to greater profits with an office that keeps patients more comfortable, and offers greater convenience, if the new office is in a more central location in your community. If your area is over-saturated, moving to a different location can also be helpful, providing needed services in a part of the area where there are fewer eyecare providers.
Investing in purchasing real estate is sometimes the best option to create a long-term investment. If you can afford it, you can pay the same, or not much more, in mortgage than you were paying in rent, with the money going to something you will eventually own, and be able to sell, or rent out, at a profit.
Potential Revenue Gain: $5,000 or more per year, depending on how unnecessarily expensive your space is, such as renting a space that is too large for your needs.
My marketing budget is 5-6 percent of gross, and it is constantly evaluated for effectiveness. Your most important form of marketing is patient recall. You can use an automated system that sends reminders to patients to make appointments, while also providing you with surveying capabilities.
It costs nothing to ask patients to post a review of your practice on Yelp or Google Reviews. You can supplement the organic marketing provided by online reviews with low-cost advertising on Google Ads, so your practice appears prominently whenever a person does a search for an eye doctor in your area. You also can purchase sponsored posts on Facebook for little cost.
Potential Revenue Gain: $3,000-$4,000 annually, or more.
Maria Sampalis OD, practices at Sampalis Eye Care in Warwick RI. She is also the founder of Corporate Optometry on Facebook. Dr. Sampalis is also founder of the new job site corporateoptometrycareers.com and www.corporateoptometry.com. She is available for practice management consulting. To contact: firstname.lastname@example.org