February 2009

 

CATARACT/ IOL

 

Practice building across generations


by Richard L. Lindstrom, M.D.

 

Dick Lindstrom, M.D., is without question the most influential ophthalmologist in the world today. His range of expertise in cataract and refractive surgery, and practice building, is both unique and authoritative. This month’s column deals with a model for practice building that is not only an outline for how to deal with economic downturns and times of decreased surgical and medical volume, but also for how to create professional growth for the practitioners and value for the practice they serve. I think that Dick’s concepts may guide organized ophthalmology into models for development of better eye care for patients and greater stability growth for ophthalmic practices.

I. Howard Fine, MD, Column Editor

 

Close-up ... an ophthalmology-led integrated eye care delivery model

This year, my practice, Minnesota Eye Consultants, Minneapolis, celebrated its 20th birthday. The vision that I had initially was to try to develop an ophthalmic center that would be one of, if not the most dominant practices for anterior segment work in the 50 mile region surrounding the twin cities-an area encompassesing about 3.5 million people. While it started out with just me and six employees, the plan I had from the beginning was to make this a practice that would thrive for generations. I had observed some established practices that had preceded mine and seen that many of them had difficulty transitioning from one generation to the next once the founder reached retirement age. Instead, together with the help of consultant Bruce Maller, we developed what I have since termed an “ophthalmology led integrated eye care delivery model.” This can be many things, but in our case it has evolved into a practice that currently includes six surgeon ophthalmologists who also serve as partners, four medical ophthalmologists, 12 optometrists, 26 ophthalmic technicians, eight opticians, and a high quality certified ophthalmic administrator. We now have 12 offices, two ambulatory surgery centers, and eight optical shops.

Partner track

At 61, I am the oldest partner, but thanks to this model, we are primed to move seamlessly forward after I retire. With the exception of the first optometrist who I joined me who was in her 50s at the time, all of the doctors we have since added to the practice have been younger ones. We have added a new surgeon in partnership capacity every three years. Currently they range in age from their low 30s to their low 50s. As a result, when I retire in a few years, they’ll be right in their prime, with strong followings of their own.

These surgeons are already equal equity owners in the business. This was important to me because I felt that ownership in something results in a different level of commitment then simply working as an employee—it makes you highly motivated to build the practice. Each of the partners will also get a taste of managing the firm. After 15 years, I stepped aside as managing partner and brought in my next most senior managing partner to serve in the position. Every three years another partner will fill the spot.

We felt this was important because it turns out that it’s quite an educational experience to be managing partner of a big practice, so that gives one a lot of insight into the strengths, weaknesses, threats and opportunities inherent in such a practice.

Economical viable model

While the idea was to build a second generational sustainable practice it has turned out to be a very economically viable model. Our fulltime surgical ophthalmologists make two to four times what the current surveys suggest that an average ophthalmologist earns, our medical ophthalmologists make one times as much as those on average and lead stress-free no-call existence, and our optometrists make 1.5 to two times the going rate.

We have a lot of internal referrals so the business is very sustainable even in the current economic climate. We are also strong believers in using other optical professionals to help free up surgeons time. A recent American Academy of Ophthalmology survey showed that just 47% of practices had an optometrist in their group. We currently have 12, who help us with primary care. They also help us with our preoperative and postoperative procedures and allow us to spend more time on complicated cases and to spend more time performing surgery. So, we have much higher surgical volumes than typical individual ophthalmologists thanks to these and other care extenders such as technicians.

As an anterior segment practice, three of our surgical partners are cornea fellowship trained, two are trained in glaucoma, and one is an oculoplastic surgeon. LASIK has been an important part of our practice. But even though the volume for this has been down by 25% of late our gross and net revenues as a practice actually grew by 10% last year. During this period, cataract, glaucoma, medical surgical eye disease and even primary care eye exams have been strong. These segments have continued to grow as the population ages.

In the next few years as I move into fulltime retirement we hope to bring the practice up to eight surgeons. Both Bruce Maller and John Pinto, who I have consulted, believe that there is a size at which a practice sometimes becomes dysfunctional and loses their culture. They have suggested to me that sometimes if a practice grows beyond eight surgeons it may start to break up into small competing clicks. With eight surgeons we can probably serve our infrastructure and keep it pumping. From the start, my hope has been to build a sustainable practice, where as I got older I could step aside and have quality people behind me to continue the legacy. I wanted to be able to come back when I was 70 and see a high quality practice bringing lots of value to the community, which was also a good place for younger associates to work. While I am still a few years from retiring, I am proud to see that we have done this. This is definitely a robust model, not to mention it’s also a fun way to practice.

Contact information:

Lindstrom: 612-813-3633, rllindstrom@mneye.com

Practice building across generations Practice building across generations
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