Practice Management

3 Strategies We Use to Overcome Independent Optometry’s 3 Toughest Challenges

Support staff members from Drs. Licausi’s and Zilnicki’s practice. Investing in the development of staff has enabled the practice to retain employees despite the challenge posed by the “Great Resignation.”

By Miki Lyn Zilnicki, OD, FCOVD,
and Jessica Licausi, OD, FAAO, FCOVD

March 2, 2022

Sustaining a profitable independent practice is an uphill battle. We found ways in our vision therapy-based office to overcome a few of the steepest challenges facing independent practices. Here is how we address these challenges to ensure great patient care and long-term growth and profitability.

Online Competition: A Niche That Does NOT Include Eyewear Sales
Online sales of glasses is a huge challenge to the profitability of most independent practitioners. Online access appeals to the customer through ease and often discounted pricing. With just one click a patient can trial frames on their face, compare different sites and purchase a pair of glasses, all from the comfort of their home.

The overhead of running an online platform is significantly less than the overhead of owning a practice and optical. This allows online vendors to often price materials much lower. Running an optical would cost us at least $100,000 annually, and would require time and effort learning a side of the business neither of us have direct experience with.

For that reason, we created a business model that allowed us to eliminate an optical while still selling contact lenses. We save ourselves the overhead expenses of  stocking frames, purchasing equipment to cut lenses and hiring opticians. We are losing out on potential profit by not selling frames and lenses, but we found that our savings in overhead offsets this drawback, and allows us to escape the negative impact of online retail.

For contact lenses, we priced ourselves to be comparable with online sites. We offer shipping directly to patients at no additional cost so that purchasing from us is no different than purchasing online in price or convenience. Our patients also know that our contact lens care goes beyond ordering contact lenses for them. We are available for troubleshooting, trialing new contact lenses/prescriptions and educating patients about new lens technology.

We used the space in our office, which was freed up by not having an optical, to create an additional vision therapy room. This use of office space generated a significant return on our investment. Two private-pay vision therapy programs paid off the expense of the build-out and equipment required, and has continued to generate profit since then.

Not having an optical requires additional patient education from both our staff and ourselves. Our office coordinator and additional support staff who answer our phones are trained to explain that while the practice does not run an optical, our providers “will determine your best spectacle prescription and provide you with a copy of your prescription at the end of the exam.”

Patients often ask us to recommend where they can buy glasses. We always give thoughtful recommendations of where to fill our prescriptions locally that will fit the needs of our patients best. As a vision therapy-based practice, our prescriptions are not always straightforward. They may contain either higher prescriptions or prism correction, and we want to ensure we are passing off our patients to opticians and labs we trust to fill these complicated prescriptions.

We cultivated relationships with nearby opticals. The opticians we work with are seasoned veterans who listen to their patients and can identify those who are struggling and need more than the basic refraction. We trained our staff on our preferred optical recommendations, so we know they are giving the same information to our patients. We may be losing out on profit from a glasses sale, but we are profiting at a higher rate on exams and potential vision therapy needs.

Every patient leaves our office confident in our guidance of where to go to fill their prescriptions and why seeking this care in-person locally will meet their spectacle needs. For practices with opticals, this education piece is crucial to competing with online sources. Your patients need to understand why the optical service you provide stands apart from others.

Look at your business model and decide if an optical makes sense. We recognize that foregoing an optical is not the answer for every private practice, though it was the solution that worked for us.

Insurance Reimbursement: Don’t Accept As Many Insurance Plans
Commercial insurance has steadily declined in reimbursements within healthcare, particularly for vision plans.

With decreased reimbursements, optometrists are challenged to maintain a steady income and generate an ROI for chair time.

Optometrists have several options to battle decreased reimbursements. One is to increase patient volume to make up for less money coming in per patient. We both worked in settings where this method was adopted and patients were booked every 10-15 minutes. This can lead to burnout and make it difficult to spend quality time with patients. Patient education is a HUGE part of how we practice and comprises the bulk of our exam time. Spending that time with patients helps you forge a doctor-patient bond that keeps patients coming back.

Our tactic to battle lowered insurance reimbursements was to accept few insurance plans. We currently only accept three medical insurances and one vision plan (we accept the medical plans in which vision therapy is a covered service).

Since we accept few insurances, many of our patients are private pay. This means we are losing out on patients who are deterred from seeing us because we do not accept their insurance. But accepting so few insurance plans means we are able to set our prices to reflect our professional time and effort instead of just accepting what the insurance company deems appropriate.

We provide patients with CMS forms to submit for reimbursement through out-of-network benefits when we do not accept their plan. We often find the patient gets reimbursed at a higher rate than we would get paid as a participating provider.

Dropping insurance plans can be time consuming. The first step is contacting the insurance company to change your contract. Once you are removed from the plan, the next step is to train your staff on the changes and notify patients that you no longer accept their insurance. From there, you have to assess your private-pay fees and ensure all staff are educated on them so they can present fees properly to patients.

We  trained two staff members to monitor insurance reimbursement rates and incoming payments. Our first is our medical biller and second is our office manager, who assists in entering insurance payments. They notify us if recurring procedures are coming back as non-covered and when reimbursements are decreasing. The two of us then sit down and make a financial decision of whether it is cost-effective to continue accepting a particular plan.

By deciding to not participate in every insurance plan, we are able to provide a different level of care to our patients. We may see fewer patients in a day, but the quality of exams, including how we listen to our patients and conduct the examination and treatment, is greater. We can be thorough and address the needs of the patient with ample education, which results in high patient satisfaction. Patients sometime tell us our care was the best experience they ever had with an eyecare professional.

The average reimbursement for a vision plan exam is around $40 (if not less). Our new private-pay patient exam fee is $150. The same doctor would have to see FOUR patients in the same amount of time as our ONE patient to make the same profit. Is it doable? Yes, but as mentioned above, the doctor can get burned out by rushing and racing around and the quality of care can suffer. Accepting few insurance plans is a no-brainer approach to running a private practice.

Staff Retention: Invest in Developing Your Employees
Keeping staff is always a challenge, but the pandemic made it an even harder. Every industry is struggling to maintain and find employees. There are also many huge incentives from bigger businesses in salary/benefits to gain employees. In our area of Long Island, N.Y., Target is starting off employees at $17 per hour. Small, private optometric offices must figure out how to stay competitive and keep quality staff members.

You can be the best doctor in the world, but without an efficient staff to support you, your practice will not run successfully and be profitable. Having a reliable and efficient front-desk team makes all the difference in patient experience from the second they call the office to the moment they leave. It is critical to invest time and energy into retaining staff.

We make it clear to our staff what is expected of them, and aim to create a pleasant work environment that feels more like family than business. Investing in staff encourages them to invest in us and the office. How do we do this? The small stuff: treating the staff to coffee/lunches occasionally, celebrating life milestones (birthdays, anniversaries, etc.) and accomplishments. The large stuff: staying competitive with raises (that are within our means), bonuses, providing annual vacation time and offering a 401K match for full-time employees after their first year with us.

The “small stuff” adds up to a few hundred dollars over the course of the year, BUT to the staff it means so much! They feel valued when they walk into work and find their favorite cup of coffee or a gift card to their favorite restaurant, and when we recognize milestones in their personal lives.

The “big stuff” is more costly. We recently gave all our staff members a raise totaling $2.75 per hour more between the three full-time staff members. That adds up to a payroll that is $6,000 more per year not including the additional taxes on this increase. For our retirement package, we offer up to a 3 percent match for our 401K program. This is about $400/payroll (bi-monthly), which adds up to close to $10,000 as a yearly expense.

What these numbers related to our expenses don’t reflect is the time eliminated in having to find new staff and train them. Interviewing and training new hires is time consuming and decreases the profitability of the office.

We conduct annual reviews (more frequently if needed) that give us the space and time to discuss our expectations, our employees’ goals moving forward and changes to benefits. We emphasize to employees the importance of making the best use of down time, figuring out better systems and creating an office that runs efficiently to ensure that how we are compensating them is in line with their performance.

Patients can tell when an employee enjoys their job and isn’t just showing up because they have to. Investing in staff is by far the best thing that you can do for your practice! Treating your employees like family, and cultivating your relationship with them, goes a long way in building loyalty and retaining your employees long-term.

Miki Lyn Zilnicki, OD, FCOVD, and Jessica
Licausi, OD, FAAO,
FCOVD, are co-owners of Twin Forks Optometry and Vision Therapy in Riverhead, NY.

To contact Dr. Zilnicki: DrZilnicki@twinforksoptometry.com.

To contact Dr. Licausi: DrLicausi@twinforksoptometry.com

 

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