May 2009

 

CATARACT/ IOL

 

For good times and bad


by John B. Pinto

 

We have spent the past several months evaluating practice strategies and ethics. As we forge ahead in our goal to help ophthalmic surgeons move in a positive direction and rise above current challenges, we take a moment to pause on simple, yet commonly overlooked business strategies ... practical tools to maintain the strength of your business no matter what the economic climate. John Pinto, an ophthalmic practice management consultant, and President, J. Pinto & Associates, provides knowledge, advice, and support to many of this country’s foremost cataract and refractice surgeons. Here, he provides his ten timeless business commandments for practice success. I think John’s pearls provide simple tools for practice building which prove valuable to us all.

I. Howard Fine, M.D., Column Editor

 

Ten timeless business commandments for practice success

We all, even the hardest working among us, like things easy. For all our lofty ambitions, there’s something about the soaring human spirit that doesn’t want to work too hard … that loves a distilled list of step-wise dictums for improvement. Thus the best selling self-help books promise the reader that perfection is just a few enumerated steps away (always 10 or fewer steps, you may have noticed.)

“Three Steps to Permanent Fat Loss”

“Five Steps to Lasting Financial Freedom”

“Seven Steps to Finding Durable Love on the Internet”

There are the original Ten Commandments of course—which stretch the upper 10-point ceiling of convenient enumeration and memory. And then there are “Pinto’s Ten Commandments,” which, at the risk of being both too derivative and too profane, I developed many years ago in response to a time-poor client who asked for the Cliff Notes version of practice enhancement. It’s always been tough to build and keep a great practice. Indeed, half of all practices are below average in profits, in growth pace, and in control over operations. It’s so much tougher to be above average now, leaning into the headwinds of the “Great Recession.” So this is as good a time as any to haul out the tablets once again, with apologies to Moses, and be reminded of a few simple rules that can put you—and keep you—at the top of the pack.

Pinto’s Ten Commandments

Hire the best people you can afford. Treat them right.

Beyond your own brains, training and ambition, your support staff are your practice’s most valuable business asset. How well is this asset growing in value? Arrange things so that every new hire you make, as well as every staff termination, improves the average performance of your enterprise. And remember that keeping staff performance and morale high is more a matter of how well they are treated, than how well they are compensated.

Provide staff with one hour of education for every 79 hours of work.

This doesn’t sound like much time, and it’s not. Less than 1% of total payroll costs, by the time you factor in benefits costs. But very few practices actually hit this profit-enhancing standard. This has always been a mystery, given that every physician who signs a payroll check can be counted among the most educated people in human history. You know from personal experience the value and the pay-back of training. You’ve spent the largest single block of your life as a student. Apply this fundamental truth to creating a continuously smarter organization.

Keep tomorrow’s appointment book 100% full.

Do you have the kind of staff who let out a sigh of relief when the clinic schedule is light? Serving just one extra patient per day can increase annual profits by $35,000 or more. Try this little experiment … tell your entire staff that for one week you’re going to be running a “full capacity” test in the practice. The goal is to fill 100% of the available template, less the inevitable plus-or-minus 5% no-show rate. As a reward at the end of each day for hitting this goal, tell staff they’ll each receive a crisp, new $10 bill. (or, if you want to limit costs, just reward the reception staff who are directly responsible for keeping the template full.) If your experience with this test is in line with others, you and your staff will learn that it really is possible to look ahead in the template and backfill any holes.

Treat every patient as though they were your only customer.

I learned this from a mentor 30 years ago when I hung my consultant’s shingle. Still works in any line of business. Fake yourself out and try it during your next clinic session. Not only will your patients notice a difference, but so too will your staff, who will work to match your elevated customer service standards.

Ask every patient to refer a friend. Every time.

Although it may feel a bit weird, even profoundly uncomfortable for the first few days, following this pearl can boost your new patient volumes by 20% or more. And it will cost nothing but a few moments of your time. Deliver the following, simple words to each departing patient in the spirit of a public health message, while also handing them three of your cards: “Please tell your friends about the importance of regular eyecare.”

Ninety-nine percent of your patients will smile back at you. Ignore the 1% who snap back with something like, “Oh sure, doc. So I can wait twice as long to get in to see you next time.” This gets easier the longer you do it, and a lot more effective if you follow Commandment #4 and give them something to rave about.

Know your numbers. Cold.

To become a physician you mastered thousands of normative physiological benchmarks. In a way that is probably still very intellectually gratifying, you know how the human puzzle works and how it occasionally breaks down. You know the right diagnosis and the right treatment plan because you can measure health and sickness by the numbers. The same is true of running a business. Happily, the structure and function of your practice business can be mastered and monitored by knowing fewer than 100 normative benchmarks.

Think through business problems like a doctor—by knowing your numbers cold—and you’ll build a great practice.

Find a surgeon more competent than you, and copy what they do.

There is only one best cataract surgeon in the world. Only one best Lasik surgeon. One best retinologist. So the chances are extremely high that you have something more to learn. Find a clinical or surgical mentor and learn what they know. Then pass it on to someone down the ladder from you.

Sweat every detail. Even the ones that bore you.

Remember, we all like it easy. So this commandment is one of the toughies. Kind of like the “thou shall not covet” of the business world. Here’s a prominent example. If you own a mid-size or smaller practice—let’s say one with fewer than 5 fellow doctors—you need to be personally, technically conversant with your billing system and protocols. You should be able to audit a chart, post a charge, submit a clean claim, run reports, and interpret a host of patient accounts metrics. Owners of larger practices are generally off the hook with this particular commandment…you have a fleet of management executives, who in turn direct an armada of technical specialists to tend to the myriad details of the practice. (Think about that the next time you get to drive home early, leaving your administrator behind to solve the problem.)

Remember: Financial success is measured in profit per hour, not cases per month.

Chest-pounding about your high personal case volumes may be satisfying, until your more efficient local competitor drives circles around you and your high overhead practice in his Ferrari. As a general ophthalmologist working in today’s environment, your pre-tax income should be about $150 or higher per hour worked … in a practice with a 35+% profit margin … with the ability to comfortably see 40+ patient visits per day. If you’re not hitting these numbers, it’s time to learn how to before the next phase of health reform re-pegs the norms…and your income.

Live on less than 80% of your after-tax income. Invest the rest intelligently.

Even if your personal resources are relatively unbounded, you and your spouse should develop and live within a budget that allows for adequate savings rates.

Unfortunately, if you only start living by this commandment late in your career … or if you pursue foolish investment risks like your cousin’s new can’t-miss restaurant … or if you happened to be in your 50’s or 60’s when the Great Recession hit, you may have to learn how to live on less than 50% if you want a comfortable retirement. So it goes. Will these 10 “commandments” guarantee you a wildly profitable, enjoyable practice? Inner peace? The amazed admiration of all those around you? No. Especially not in these interesting times. For that, there’s the 11th commandment, adhered to by the happiest surgeons I know: Have fun. Let go a bit. Get into trouble a bit. Be content and just a little less than perfect when circumstances allow. Enjoy the moment-by-moment of your practice and your life, rather than dreading some unborn future. Be mindful of all that for which you can be grateful. Give freely of your miraculous skills to those in true need. And remember that your professional career is ultimately among the most secure on the planet. There is, and will always be, an unlimited and chronically underserved market demand for not going blind.

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