OM Tip - 5 Ways to Increase Profitability

A recent OM Tip of the Week on "Five Ways to Increase Profitability" got me thinking of a variety of things relating to Practice Profit.  We all work hard to make certain that while patient care is top notch, that the practices operate at maximum efficiency to return the greatest amount of profit for the time spent in the office. 

Something that occurred to me a while back and that I have witnessed many times since is that just providing great professional services guarantees you happy patients and an average income, if that great professional service is not coupled with great office management.  Getting the professional component of the practice right is perhaps the most pleasant and easiest component of practice.  But, its only half of the job.  Managing all other aspects of the practice is where the rubber meets the road in practice profitability. 

From Neil Gailmard's article linked above I have these comments on his recommendations:

1. See more patients per day.

As Gailmard says, and I have heard:  "This concept is often not received well by ECPs or staff members. Basically, the objection is that it sounds like more work and stress,........"  But, it IS true.  In running over practice statistics from many, many practices we find that the average practice sees about 10 full exams per day.  This always surprises the OD's who believe they see many more patients than an average of 10.  Most offices certainly have more slots than 10 -- usually at least 16 and often offices are booked in advance.  So, what happens to the 6 or so that may be booked but fail to show up?  Good question that you should be asking your front desk -- which has absolute control over how many patients you DO see.  From DVC's new office Goal Setting Form:

• Front Desk controls patient flow and thus exam count. The number of exams that you see is largely dependent on: proper phone quoting of exam fees, reminder calls, acceptance of work-in exams, pre-appoint, proper recall for exiting patients, working lapsed recalls,  and calling no shows. Convenient office hours (late PM and Saturdays) contribute greatly to increased exam counts. 
• Keep in mind that an empty exam chair generates zero dollars for the practice. Keep that chair full and watch your exam counts carefully. There is no more important statistic in your office.  
• We figure that an average practice increases practice income by about $25,000 NET for each additional patient seen per day.  Want a raise? See one more patient per day.  If you are at the practice average of 10 adding one more should not be a stretch but it does take your management to achieve. 
  

2. Sell more things to each patient.

Are you taking full advantage of your ability to anticipate patient needs and fill them?  This ranges from professional services to contact lens and optical services. 

• The main "drivers" of professional services are: OCT scans, Visual Fields, Routine Photos, Medical Photos, Gonioscopy Refractions as a % of routine exams. Watch your coding and documentation. Often 99213 or 92012 is justified with your documentation but many OD's undercode. Make certain that you charge for what you do and don't be afraid of and adverse audit with higher level exam codes if you have proper documentation.
• For anticipating patient needs  we have added Lifestyle questions to the Patient History in Examwriter. If you are not using a template that has these questions please see your PC to get them added. If you are using paper charts make sure that you include Lifestlyle questions in pre-test.  Lifestyle questions help you to identify not only patient intentions, but help to uncover opportunities for sales of goods and services that go well beyond the Chief Complaint. Selling in the chair (not a dirty word!) with phrases like "even a small change can make a big difference." are powerful motivators to patients. Set goals for optical conversion. A patient who does not make it to optical is not one who will purchase glasses -- at least not from your office!  Check the main "drivers" of Optical Sales for each of your Frame Stylists. Who's weak? Who's strong? What needs to change?
• Are your patients still wearing the same contact lens type that they were wearing 5 years ago?  Newer and better materials and wearing schedules are available and believe it or not most patients really like to be wearing the best technology that is available.  Change is good!

3. Raise your fees.

For the most part if you are following the DVC fee schedule our fees are fair and probably do not need to be raised.  However, if you prone to giving away office visits, not charging for refractions or other ancillary tests keep in mind that you denigrate the value of your services when you give professional care away for free.  This is especially crazy when you discount to an insurance company by undercharging.  Finally, you raise fees by properly billing the correct exam code rather than undercharging by using a code that is less than what you can charge given your documentation.  Make certain that your staff understands and can defend your fees. DO NOT discuss fees in the exam lane -- instead let your staff handle fee quotes.  A patient compliant about a fee usually means either a misunderstanding of the fee, a poor explanation by staff, or that they don't think that you are worth what you think you are.  That's a legitimate complaint but should not have you changing fees on the fly. Stick to you guns but make sure everyone in your office understands and can defend your fee structure.

4. Avoid costly errors

Train your staff properly in all areas of practice and your errors will be reduced to a manageable level.  Review your charts daily to make certain that not only that you have documented properly but that the charges have been properly added at checkout.  Reduce patient A/R by making certain that co-pays and deductibles are properly collected at checkout. Also make certain that a proper recall has been entered.  See Gailmard's comments for other ways to decrease errors. 

5. Reduce your expenses. 

In general you should keep a watch over office expense but no one is going to maximize practice profit by "saving their way to it".  You CAN save thousands of dollars in unnecessary practice expense by keeping a watch over your expense reports on a monthly basis -- and you should watch this.  However, by paying attention to items 1-4, above is where you will find the compensation you desire by working daily in your practice.

Comments Welcome.