By Peter J. Cass, OD
Jan. 24, 2018
It’s important to constantly think of ways you can improve for patients, and for your practice’s financial well-being. We have a single-location practice with one full-time OD and one part-time associate OD. The following are service improvements in the patient service we provide–and the corresponding growth and profitability that has resulted from these changes.
A Better Office Location
Cost: $30,000 to purchase land and $600,000 to build a building. It took a year to plan and five months to build.
Payoff: We experienced $483,000 growth in annual gross in the two years following the move. We have continued to grow each year since (averaging around 18 percent per year for the past seven years). That represents a 76 percent increase in growth in the new location versus the old.
How: The process included many steps: selecting land, working with a designer, applying for a loan, selecting a builder, and overseeing the construction. It required a lot of planning and discussion with experts: banker, accountant, real estate agent, designer and builder. I pushed forward and took it one step at a time.
Advice: Carefully project your new monthly expenses and make sure that you can afford increased loan payments. Set aside cash to carry you through the transfer period. Build the office as large as you can afford, as a new office with plenty of exam and retail space spurs growth. Our next move will be to expand our hours.
Cost: I had to hire an additional employee and train the employee to do many of the basic tests that I was doing. It took three months of careful training to get her up to speed and fully implement this delegation.
Payoff: I was able to increase my patient load from about 28 patients per day to about 45 patients per day. This added about $300,000 in gross revenue, and it was much cheaper than hiring a full-time associate.
How: I had to review the exam process and analyze which tests and procedures I was doing that I could hand off to an employee. I spent time carefully training the employee to do those procedures, following up with her and making sure she was gathering good data and documenting correctly.
Advice: Patients don’t like a long exam, and patients don’t expect the doctor to do everything. Having your staff do many of the routine data gathering will greatly speed up your exam flow and dramatically free up your time. This is a huge benefit in a practice that is at capacity, but even in a practice that is not at capacity, the free time can be used for practice building or simply for more time off.
Hiring a Part-Time OD-Associate
Cost: Hiring an OD-associate at around $100,000 per year is a serious investment for a practice . Our part-time associate costs us $75,000 annually.
Payoff: The associate has increased gross revenue by about $500,000 (at 2.5 days per week). The net is typically higher on the additional revenue generated by an associate, as fixed costs will generally not increase. The difference between the net on the additional revenue and the associate’s salary is additional profit for the owner.
How: Careful selection of a doctor that fits the practice is key. The staff should be involved in the hiring process, as they will be more helpful in filling schedule if they like the doctor. I used a statewide message board to find candidates, and had them work a few days in the office to see if they were a good fit.
Advice: It is hard to make the leap to five full days of patients for a new doctor, so I found an associate who was looking for part-time work, and it has worked well for us. I plan add another part-time associate as I expand our hours.