Dr. Neufeld (back row, second from left as you are looking at photo) with members of his practice team. Dr. Neufeld’s organization, ODs on Finance, has shared results from an OD income survey.
Gauging your income level & making changes to do better.
By Aaron Neufeld, OD, FAAO
March 27, 2024
In December 2023, ODs on Finance – optometry’s largest personal and practice finance platform – decided to conduct an income and net worth survey of optometrists across the U.S.
The ultimate goal of the survey was to get the most accurate insights on income trends and financial behaviors. This data helps associate ODs better advocate for higher wages, and on the flip side, helps owners better gauge competitive wages for associates and whether they are in line with their peers’ overall take-home income.
Over 1,900 ODs around the country submitted their responses. Here are a few key takeaways:
- The average annual gross pay across modalities is $155,000
- The average net worth of ODs is $872,765
- A delta of $107,444 exists between the average pay of associate ODs and owner ODs
- 57 percent of ODs feel that they are fairly compensated
Download the Full Report HERE for FREE
Gross Pay Averages By Practice Modality
Let’s take a look at gross pay average in different modalities.
We can see that a significant separation exists between owners and associates. We can also see that a substantial jump occurs for owners that bring on 1-2 associates ($70,000 per year change vs. solo owners), and a 66 percent increase when that number jumps to three, or more, associates ($187,158 per year change).
Looking at net worth values, we see trends that follow income levels in a linear fashion.
The metrics prove that adding doctors to a practice directly correlates with creating higher take-home income, but how do owners go about doing this successfully, so their associates are able to increase the value of their practice while also being happy?
Other Articles to Explore
Tips for Maximizing Your Income
Here are four keys I learned through my journey as a practice owner and through my many discussions with practice owners netting $500,000+ in their practices.
- Time the Addition of an Associate Correctly – One of the biggest mistakes an owner can make is hiring when they don’t need to hire. This creates a liability that erodes cash flow on a biweekly basis. While many consultants may push to hire to grow, successful practices tend to see the opposite. Watch for trending growth and positive momentum, then pull the trigger on bringing in a helping hand.
- Find the Right Associate – While every optometrist might have a license, that doesn’t mean they are a right fit for a practice. Private practices differentiate themselves from corporate locations by filling unique niches. Niche doesn’t just mean specialty services, it also means the style of care, the attitude shown to patients and even the aesthetic exuded by the staff and doctors. Make sure your associate checks all the boxes, so they can emulate care in your image, and in tandem, create a comparable revenue per patient.
- Offer Proper Compensation – Remember that only 57 percent of the optometry workforce feels they are getting paid enough. Offering a competitive compensation package with benefits and a productive bonus allows your associate to feel valued and less likely to turn over. While offering higher pay may be daunting, especially if a practice is working with thin margins and subject to compensations from stagnant VCP reimbursement, remember that with a proper production bonus, incentivization can help maximize top dollar of associate production. If special emphasis is placed on expanding cash-pay services and higher margin material sales – this can be a quick way to not only afford an associate, but push them to bring instantaneous profitability to your practice.
- Understand Free Cash Flow – Free cash flow is one of the most vital components of business operations. If we’re using the human body as an analogy, I equate it to blood circulating through arteries and veins. It is important to track your free cash flow and ensure that you’re working on both sides of the equation (increasing your revenue while subsequently reducing capital expenditures and operating expenses) to maximize it at any given time. This in turn will help you adjust for bringing an associate on and handle possible early stage periods of lower production as both patient volume and associate comfort level ramp up.
From a global perspective, conducting optometry’s largest income survey gives me hope for our profession from a financial standpoint. Salaries are trending up and practice owners are reporting healthy numbers. However, our work as practitioners and business owners is never done. We can work together to produce higher value for our patients, and in turn, higher revenue for ourselves.
Aaron Neufeld, OD, FAAO, is the owner of Los Altos Optometric Group in Los Altos, Calif., and co-founder of ODs on Finance. To contact: aneufeldod@gmail.com
