Eyeworld

OPHTHALMOLOGY BUSINESS 92 November 2016 by John B. Pinto and Corinne Wohl, MHSA, COE Seven critical numbers more often a matter of revenue enhancement than cost contain- ment. In a solo practice, seeing just three extra patients per clinic day can boost annual collections by $100,000 or more. You would have to terminate more than two lay staff to achieve the same profit result, which would then likely harm the practice due to under- staffing. 3. Average collections per patient visit. This is also called the "av- erage ticket," which varies widely from setting to setting and across the subspecialties. Simply divide total annual collections (net of drug collections if you have a retinal practice) by annual patient visits (including postop visits). This measurement can be taken for the overall practice or for each individual provider. In a general/ I magine we erased from ophthal- mology textbooks and training programs just a few critical numbers. Let's say, refractive error, intraocular pressure, and cup-to-disk ratio. Poof—gone. This isn't much information compared to the thousands of fac- toids you had to master to become a physician, right? Way less than 1% of what you've learned. And yet, the absence of just these three metrics would send you back 99%, to the ranks of a 19th century ophthalmol- ogist. These three numbers are so cen- tral to the profession that we could stop you as you exited Room 3 on any clinic day, and you'd be able to rattle off these three numbers on the last patient seen. The same is true in the business of ophthalmology, where there is just one "patient," the practice, To the point: Simple practice tune-ups for complex times itself. Competent managers and owners commit to memory the norms for numerous key perfor- mance indicators, and know by rote what the values are for their practice at any one time. Here are seven metrics that are as critical to evaluating the econom- ic health of your practice as IOP is to evaluating eye health. As a practice owner or administrator, how many of these do you know off the top of your head without looking at reports? 1. Practice growth rate. Although the U.S. population is only growing at about 1% per year, the demand for ophthalmic services is growing at about 4% per year. This is because the population of seniors is growing at three times the pace of the overall popula- tion, and seniors (happily for us in eyecare) need a lot more of our services compared to younger patients. Growth rate, in revenue terms, is simple to calculate. A practice collecting $1 million per year that grows in 12 months by $50,000 is growing at a 5% pace. A practice growing faster than 4% per year is likely gaining market share. Not only should you know your current growth rate, but you should have an agreed growth rate target. 2. Patient visits per doctor per month. This is simply the total average monthly visits (including postop patients) for each provider in your practice. Typical figures are 500+ in a hard-working general ophthalmologist's office, 400+ in most subspecialty settings. This benchmark is vital because in a fixed-cost business like ophthal- mology, profit enhancement is

• Blank Page
• Blank Page (1)