Finances

Add An Additional Exam Lane? Calculate If It’ll Pay Off

By Rajeev K. Raghu, OD,FAAO

Adding an additional exam lane allows you to see more patients per day and boost gross revenues. Before taking this step, project your growth and personnel capacity to see if the financial rewards exceed the investment.

We had one exam room for overfive years, when we first moved into our current office, andwe had asecond room withspace, so earlier thisyearwe refit it as an exam room.I was concerned that we were not booked enough in advance (one week) to justify the second room, but there were too many times that patients were waiting forouroneexam room to open up.We pride ourselves on having advancedinstrumentation, so adding the secondexam lanemeant addingtopnotch instrumentation to boot.

It cost $51,380 to finish our second examination room. We needed to see one more patient a day to pay for the exam room ($306/patient x 5 patients/week x 50 weeks/year = $76,500), andcurrently we are seeingtwo to three patients per day more ($306/patient x 4 patients/day x 5 days/week x 50 weeks/year) x 30% net – $51,380 cost = $40,420 profit). We see more patients over a shorter period of time. We haven’t had to add any new employees, and don’t expect to until we get to five to six more patients a day.

Hereare the calculations I used todeterminethat adding a second exam room would be worthwhile.

Calculate Cost and Project Revenues

Step one is to calculate yourrevenue-per-patient ($306 on average according to Alcon- and Essilor-sponsored Management & Business Academy statistics) andthen calculate thecost (per month)to renovate andpurchasenew instrumentation. Will you be able to keep upwith the payments on the instrumentation andrenovation costs? Our instrumentation costs for the second exam lane are $1,000 per month over five years. Then ask yourself how long will it take you to break even, and how long toturn a profit on your investment? The risk of adding a new exam room is not being able to fill it. Adding one patient a day increasesmy practice’srevenue by almost $72,000peryear.

To give you an idea ofhow much a new examroom can cost you,here is an itemized list of mycosts:

Cabinets$2,800
Stand$4,000
Chair$4,000
Slit Lamp$11,000
LCD Display$3,600
Phoropter$19,000
Memory Box$2,000
Cables$280
Stands/ Tables (CL Room)$2,000
Computer reconnection$1,000
Workstation$700
Wk support$1,000

Total$51,380

TwoKey Questions

If your financesenable you to handle the costs ofadding another exam lane, but youstill areundecided, ask the following two questions:Areyour patients waiting longer than 30 minutes in the reception area before beginning their appointments? Is your practice experiencing enough demand to add one more patient per day, and do you have the capacity to see one more patient per day without adding another doctor or technician?

ConsiderAdditional Staffing forAdded Exam Lane

We have not hired a new technician, but we believe that will be our next step to maximize our patient flow.We are not sure yet if thethree to fourmore patients warrants a new tech yet.We are trying to modify our schedule to adapt to the two exam rooms.

Related ROBArticles

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Three Scenarios of Net Cash Flow:Is Your PracticeFinancially Healthy?Is itSalable?

Rajeev K. Raghu, OD, FAAO, is the owner of The Eye Center at Jackson in Jackson, NJ. To contact him: drraghu@theeyecenteratjackson.com.

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