Eyeworld

26 Ophthalmology Business • September 2017 clude determining the local insurer mix, the share of the population that is likely to seek care but lacks insur- ance, and whether new legislation will increase the uninsured rate. Additionally, practices should use metrics to analyze and bench- mark their service lines to market, according to Mr. Wybo. Practices should determine the demographics and age groups of their target market and calculate the number of cases per one thousand people that occur for a particular procedure and/or product to deter- mine a market estimate of total cases. Practices can find market figures by utilizing publicly available data from the Centers for Medicare & Medicaid Services, the U.S. Census Bureau, and other government sources or industry publications. Practices should compare their own financial figures to the market to determine market share for each service line. Advanced, integrated electronic health record systems are important to accurately track and gather this data, according to Mr. Wybo. Performing such an analysis annually will allow management to determine service line growth or decline. "After all the data is analyzed and summarized, the practice's stake- holders should determine a feasible yet challenging goal for market growth," Mr. Wybo said. "The prac- tice must either procure new custom- ers or improve revenues per existing customer." OB Reference 1. Vision Industry Overview. February 2015. Harris Williams & Co. www.harriswilliams.com/ sites/default/files/content/hwco_hcls_vision_ industry_updatev2.pdf Contact information Gurman: mgurman@abramslaw.com Wybo: SWybo@conwaymackenzie.com who may have previously received surgery at one practice and received rehab at another, due to convenience in location or price," Mr. Wybo said. Alternatively, increased compli- ance requirements and expenses as well as decreased payments for ser- vices may mean growing a practice is the best way to maintain profitability. "A key in this climate is access to patients," Mr. Gurman said. "The larger the practice, the harder for insurance companies to drop your practice and the less expensive it is to operate due to economies of scale." An aging U.S. population led Mr. Gurman to advocate acquisition, or the "tuck-in" model, as one of the best ways to grow a practice and increase market share. "I don't know if there is a specific size or goal that should lead to considering a transaction," Mr. Gurman said. "Any forward-think- ing physician who wants to ensure the continuation of the practice and avoid being bought out by a hospital system should be looking to join a larger group or merge with several smaller groups in their locale to cre- ate stability and potentially increase their income by reaching economies of scale." Other considerations An ophthalmology practice looking to grow its local market share should first start with a strategic planning process, according to Mr. Wybo. A practice should identify and analyze its target market and popu- lation demographics. A practice may want to determine the age composi- tion of its local market and whether that population is increasing. "An increasingly aging popula- tion in the U.S. is currently leading to overall increasing demand for medical and surgical eyecare due to a higher prevalence of chronic diseas- es," Mr. Wybo said. Other important analyses in- Steven Wybo, senior managing director, Conway MacKenzie, Detroit, said, "If a mature practice is looking to grow at a rate just above the indus- try growth rate, it may be more cost efficient to squeeze more revenue from current customers." Employing text messaging or other effective forms of communica- tion to remind patients of checkups or contact renewals could increase scheduled and attended appoint- ments. Implementing an advanced, efficient scheduling system is vital as well, according to Mr. Wybo. "A practice could also alter its strategy to be more surgically focused, and defer lower revenue services to optometrists in order to free up ophthalmologist practitioner capacity to schedule more high revenue/margin surgeries," Mr. Wybo said. A major concern in the oph- thalmology industry is that demand for services is forecasted to exceed the current supply of ophthalmolo- gists. This may seem troubling, but may offer a new growth vehicle for ophthalmology practices by collab- orating with optometrists through either formal partnerships, mergers, or acquisitions, Mr. Wybo noted. Optometrists are expected to grow in number by 2–3% annually to meet the rising demand for eyecare. 1 "Forming strategic partnerships has the potential to increase refer- rals, expand capacity, and add and/ or retain highly specialized yet scarce practitioners to your labor force," Mr. Wybo said. "Through integration, capac- ity constraints could be alleviated enough to allow ophthalmologists to increasingly focus on surgical proce- dures that generate more revenue per customer. By co-managing and being involved in the entire continuum of care from examination to post-surgi- cal rehabilitation, practices are more likely to retain or attract patients continued from page 25

• Blank Page
• Blank Page (1)