David I. Geffen, OD, FAAO
A practice that is co-owned by optometrists and ophthalmologists makes sense today–if the ownership arrangement benefits all co-owners.
SHOW WHAT YOU BRING. A partnership is more appealing to an MD, if you have an established practice and show what numbers you bring to the table.
CREATE A PRACTICE NICHE. A specialty like pre- and post-operative refractive and cataract care adds value to the practice.
DEFINE DIVISIONS OF CARE. Free up the MD for surgery while the OD covers most other care.
When co-managing patients, a common concern is that the patient won’t return to the OD’s practice after their referral. When the optometrist and eye surgeon are partners in the same practice, that concern is no longer an issue.
In a co-owned practice, MDs and ODs generate patients for each other without the worry that the patient will be lost once sent out of their care. Even better, new patients are generated for all doctors, as the OD sends patients to the MD in the practice for surgery and other treatments that fall outside the OD’s scope of practice, and the MD sends the patient to the OD for regular eyecare and pre- and post-operative care.
In my own practice, I have an ownership partnership with MDs, and it is a very rewarding experience. I have truly enjoyed working side by side with my partners, and the ability to go next door and grab one of them for an immediate consult is priceless. Here is how we’ve made the partnership work to the advantage of all owners.
Divide Duties and Compensation
My practice, Gordon-Weiss-Schanzlin Vision Institute, located in La Jolla, Calif., came together in 1994 when Michael Gordon, MD, called and asked if I was interested in moving in together at a new location. Perry Binder, MD, (who has since retired) heard about our move and discussed joining us. We formed an S corporation, with each of us owning shares, and we merged our three practices. We have since grown to include five MDs and two ODs including myself. We have 28 employees, of which five work exclusively for me, four work for all doctors, and the rest work for the surgical team. At present, I own the practice, along with three of the MDs.
In the division of duties, my responsibilities include most of the primary care in the practice, the contact lenses, running the optical and overseeing the co-management program.We are paid on a production formula.
In compensation, we are paid on a production formula. We use a monthly draw based on an average production, and we do a “tune up” each quarter. Our formula takes into account the revenue I produce directly, including contact lens and optical sales, and then a percent of total revenue.
Since merging my practice into the group, I am generating over three times the revenue than before. The power of the group is well above that of a solo practitioner.
Know What You Bring To Practice
I receive many calls from optometrists around the country asking how they can become a partner in the ophthalmology practice they are working in. I ask them what income they directly provide to the practice and what patients they bring to the practice. It is difficult to ask for a partnership if you have no patient base.
In our case, merging three developed practices provided an immediate and considerable patient base. I think for an employed OD, the better scenario is to ask for a shared profit formula based on the income the OD is generating. This will give the incentive for the OD to produce more revenue and not feel like just another employee in the practice. The potential is somewhat greater in an ophthalmology practice due to the higher amount of revenue generated. But there is greater opportunity for ownership in an OD practice.
Create a Practice Niche
Our practice is not a general ophthalmology practice. We are a refractive and cataract practice. With the emphasis on these types of surgeries, the ophthalmologists see the consults themselves with the help of ophthalmic technicians. Our associate OD works part-time with the MDs to help in their clinics to do trials of contacts and help with post-operative care. I do the primary care in our practice. Most of the general exams are seen by the optometric side. We do all the contacts and dispensing, as well as general medical care.
Divide Care Duties
The division of care needs to be discussed and fully understood before an OD begins to work in the practice. Hopefully their is a mutual trust and respect for what each doctor can do, and the OD is allowed to practice to the full extent of the law. I hear too many stories where the OD spends all day doing refractions, and the MD comes in to do the health check. This is a waste of resources. The ODs should be doing most of the primary care and generating surgery cases for the MD to keep the MD in the operating room most of the time. In many practices, the MD will train the OD to do procedures beyond the normal scope that an OD would do in private practice. They may assist in surgery or perform minor procedures.
In my situation, in which I am a full partner, there is no problem in assuring a patient is sent back to my care. First, the surgeons I work with want to perform surgery and not get bogged down doing pre- and post-operative care. We also co-manage with many ODs in the community and do everything possible to make sure the patient gets back to their eye doctor. The same holds for my patients having surgery.
We try to have one doctor in the office at all times. It is not necessarily an OD or an MD. We always have an MD for back-up call if a surgical emergency arises, but the OD’s also take turns being on call.
Make It Legal: Sign Document on Pay Structure
If you are an employed OD, you need to protect yourself with an employee agreement. It’s the norm. This agreement will spell out the details of things like pay, bonuses, vacation, sick time and hours. If you are an ODs in a partnership, make sure you have a partnership agreement. Most business attorneys can help you create one.
Meeting the Goals of Health Care Reform
This OD/MD co-ownership model fits in perfectly with the goals of health care reform. The merging of practices creates great savings on overhead and improves efficiencies. We can share most of the administrative staff as well as cross training with techs. The flow of patients from one side of the office to the other is a great convenience to our patients. We can often have a consult with one another while the patient is still in the office. Finally, the ability to have other doctors to ask about an interesting case or ask for an opinion is invaluable.
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