Practice Management
April 2023
by John Pinto and Corinne Wohl, MHSA, COE
“It was better back then” sums up the chief concern we hear from many surgeons today. A realistic assessment of the future of eyecare is more braided and perhaps more hopeful. Here are rejoinders to the all too common—and certainly reasonable—concerns.
1. Bigger is not always better or easier. The general trend today in ambulatory healthcare is consolidation—smaller practices merging into larger ones, larger practices acquiring the stragglers, PE firms building empires, and health systems getting back into practice acquisitions at a pace not seen since the 1990s. Even when a practice slowly, organically grows and adds providers, staff, and office locations, operational complexity generally increases logarithmically. Though larger practices can sometimes play a tougher game toe to toe with payers, regulators, and local market forces, these gains can be outweighed by complexity. A practice with four times as many doctors needs eight times as much leadership, eight times better management, and eight times more communication to stay organized, harmonious, and productive. If you are in a smaller private practice today, you don’t necessarily need to grow to survive and thrive.
2. Lower fees could once be fixed by “one big idea.” In the past 40 years, the largest economic revolutions in ophthalmology have been the development of private ambulatory surgery centers, the addition of optical dispensing, the bloom in medical retinal care, premium IOLs, and the employment of larger numbers of non-partner doctors as sources of passive income. This low-hanging fruit has now been plucked by most contemporary practices and has allowed surgeon owners to preserve and even advance their incomes (both outright, and when expressed as a percent of their personal collections). On the road ahead, it will take a larger number of much smaller tactics to stay ahead of the emerging profit squeeze. Mitigation of the anticipated cuts ahead will require a practice to execute numerous small tactics all at once to have the same profit-preserving impact of any one of the last few goliath eyecare business revolutions. Examples of these include:
- Unaccustomed levels of frugality in hiring, technology upgrades, and facility development.
- Sharing resources with former market competitors and collaborating more closely to secure managed care contract access.
- Pushing the envelope to optimize surgical volumes and testing utilization.
3. Technology turnover velocity. A bit over a generation ago, how one did cataract surgery, with or without phaco, was a prominent technology quandary. Making the go/no-go decision with electronic health records was a headline grabber 15 years ago. An ongoing debate is the role of the Light Adjustable Lens (RxSight) and in-office cataract surgery. These decisions are all confusing and all expensive. But the same simple rule of thumb that guided surgeons in the transition from extracapsular surgery to phaco can guide you today: “What’s the crowd doing?” The transition to a preponderance of phaco took less than 5 years because it was a very good idea. Many contemporary transitions are taking a lot longer. Decide whether you’re the kind of surgeon who will adopt a new technology when the first 15% have made the shift, the last 15%, or somewhere in between.
4. Keeping up with the regulatory and procedural churn. If Starbucks had to run their coffee shops like your eye clinic, the customer would sign five forms before they could privately whisper their order to the java technician. Then it would take the barista an extra 15 minutes to get authorization. Forty years ago, a fairly complete patient record (on a 3”x 5” card) said: “Left eye doing better.” Twenty years ago, SOAP was sufficient on a full sheet of paper. In the future, the nexus of EHR and progressively narrower payer care pathway algorithms may constrain today’s youngest surgeons to an environment where a lot of medical decision making will result from artificial intelligence. Lay staff will be similarly directed by machines in their support of the doctor. Rather than fight this trend, embrace it, and harness technology that will hopefully be emerging from the most vanguard software providers to help you make and record faster clinical decisions, see more patients, and stay CMS-safe.
5. Provider harmony will take more work. Control equals happiness, and the private group practice of the future will almost certainly involve less control. From past study and observation, we know that surgeon happiness and collegial relations within a group setting correlates most closely with a surgeon’s ability to earn an income that is higher than his or her lifestyle costs. Under best case scenarios, even the best mitigation efforts to respond to projected cuts and operating cost-creep will result in the typical partner in the typical practice receiving a cut in income. Three mitigation strategies are essential in the coming era:
- Surgeon owners need to know that they—and their managers—are doing everything reasonably possible to preserve profitability.
- Surgeon owners need to double down on communication, especially frequent board level sessions to explore each doctor’s feelings about their present and projected earnings.
- To the extent feasible, owner and non-owner providers need to plan ahead and get real about their retirement calculations before the most difficult revenue adjustments arrive.
6. From a “weak leader” to a “strong leader” model. In today’s environment, where decisions are tougher and come at you faster, a formal managing partner should be selected and empowered. This leader’s role is not to take over for the board but to help ensure that the board’s will and policies are being translated into action by the management team.
7. The shift from “any plan or even no plan works” to “we had better choose the right business plan.” Some practices still go “bare” when it comes to writing a formal strategic business plan. They skip from one business opportunity to the next without the basic underpinning of a strategic context for their tactical decisions. The smartest practices today are taking the time to discuss and formalize their long-term goals.
We are in the middle stages of a profound phase shift in the business and profession of eyecare. The future environment will oblige more teamwork and less rugged individualism, more planning and less shoot from the hip, more leadership and less freestyle management.
About the authors
John Pinto
President
J. Pinto & Associates
San Diego, California
Corinne Wohl, MHSA, COE
President
C. Wohl & Associates
San Diego, California
Contact
Pinto: pintoinc@aol.com, 619-223-2233
Wohl: czwohl@gmail.com, 609-410-2932
