By Laurie L. Sorrenson, OD, FAAO
Generating income is only half the story when building a profitable practice. The other half is keeping a critical eye on how much money you spend. Here are eight ways that I keep costs down–and profits up–in my practice:
Participate in groups or alliances like Vision Source. Alliances or buying groups with high numbers of members can negotiate a lower cost of goods for frames and contact lenses–then pass along savings to participating practices.
Watch staff as a percentage of gross income. Your staff is your most valuable resource, but it also can be the most profit-draining. Make sure that each staff member is paid for by the practice’s income. Don’t cut into your profits just to keep people on.
Capture staff efficiencies. Measure how long it takes staff to do their jobs and move patients through the office. Making a staff adjustment in a key area like pre-testing may enable your entire staff to work smarter and faster. This, in turn, allows you to see more patients per day.
Pay associate doctors by percentage of income generated. Many consultants do not recommend this, but it has worked very well for me. Rather than pay each doctor a set amount, we pay them according to the money they generate for the practice. That way, if a doctor wants to work less hours than another doctor, their adjusted compensation is fair.
Process returns in timely manner. Don’t let returned inventory sit in a drawer. This is true for both contact lenses and spectacle lenses. Organize returns, with one drawer or area for contact lenses and another for spectacle lenses. Have a system in place for a specific staff member to check at the end of each day or week for needed returns. Make it their responsibility to process and send off each return to the manufacturer or distributor.
Watch total number of frames on your board. Anything on the board is money not in your pocket. Have a frame inventory management system (online or offline) to track which frames are on your board at all times and how much each frame is selling. Move frames that are not selling off the board before they drain your profits.
Use stock lenses for in-house edging. When edging in-house, order “stock” lenses to save a huge amount. Educate your opticians on when to order stock lenses.
Laminate all paper displayed in office. Coating oft-used checklists and other paper forms with plastic extends their life. Use dry-erase markers on laminated documents like patient questionnaires and explanations of procedures.
How do you save money and cut costs in your practice? What tricks have you learned over the years to avoid compromising your profitability?
Laurie L. Sorrenson, OD, FAAO, is president of Lakeline Vision Source in Austin, Texas. To contact her: sorrenson@att.net.
