February 2018

OPHTHALMOLOGY BUSINESS

To the point: Simple practice tune-ups for complex times
Similar challenges for ophthalmologists around the world


by Corinne Wohl, MHSA, COE, and John B. Pinto

“Sometimes the hurdles aren’t really hurdles at all. They are welcome
challenges, tests.”
—Paul Walker

“I learned two basic lessons on Everest. First, just because something has worked in the past does not mean it will work today. Second, different challenges require different mindsets.”
—Lewis Gordon Pugh

Despite reimbursement differences, ophthalmologists from around the world have similar challenges. While presenting a practice management master class at the XXXV Congress of the ESCRS in Lisbon, Portugal, many of the same questions and concerns we hear in the U.S. arose from the audience.
Here are common challenges that ophthalmology practices face.

1. Human resources management
Hiring smart, firing promptly, and how to effectively manage the practice so your employees are retained and productive definitely tops this list. The use of formal documentation as both guidance and a risk management tool is crucial and includes:
a. An employee handbook that is regularly updated and approved by legal counsel.
b. Operations manuals that are up to date and detailed enough to be used as a training manual when onboarding new employees, as well as a resource for all departmental employees.
c. Written communication, in general, to keep employees informed and oriented to the practice goals.
d. Management team meeting minutes that specifically reflect the directions and instructions provided to mid-level managers. (You might be surprised at how many different interpretations there are from a meeting you held. Without review and set deadlines, your management meeting can be deceptively unproductive.)

2. Strategic planning
Strategic planning is prominently missing from most practices. Fewer than 10% of the ophthalmic practices in the U.S. we first come across have a formal, written strategic plan. Yet it makes perfect sense
that a written plan functions as a clear guide and can help communicate the mission and goals of the practice.
What can you do to push past the barriers and inertia that prevent many from writing the plan?
a. Rather than imagining a 25-page, meticulously detailed written plan, focus on the nuts and bolts of planning. You can accomplish this in two to five written pages.
b. Overlook the fear of commitment or of not hitting your targets. This document is a guide, not a test.
c. Every practice has more opportunities than it can undertake; a written plan will allow you to sieve through this list and pursue the priorities.
d. Base your goals and assumptions on what you know right now. Plan to review your strategic plan annually and revise as needed.
e. The administrator and owners are best prepared to write the first draft. Once the main goals are agreed on, share the draft document with your management team. They can assist you with writing the specific tactics that will emanate from your overall strategy.

3. Benchmarks and key performance indicators
Tracking your practice’s key performance indicators provides an early heads-up for trends that may be more difficult to notice promptly if you are limited to reviewing traditional financial statements and dry columns of figures.
a. It’s important to primarily use external peer-practice benchmarks; these are analogous to the clinical benchmarks you use to assess patient health. You probably don’t diverge much from your colleagues in what you consider to be healthy IOP.
b. In addition, you should be benchmarking internally (i.e., against your own statistics, month over month) for traits unique to your practice, such as the productivity of a nurse practitioner you use as an extender.
c. By limiting yourself to gross profit and loss statements you will only see what has changed; there will be little indication of why things changed. For example, if revenue is rising and patient visits are rising, you might assume that all is well in the customer service area. But if you were tracking and benchmarking both new and established patients, rather than total patient visits, you could uncover that your new patient ratio has risen, while your established patient visits have fallen—and that could indicate the practice has gaps in the recall process.

4. With growth, more formality is obligatory
a. Written communication, rather than just oral communication
• Departmental policy and procedure manuals
• Employee handbooks
• Meeting agendas and minutes
b. Formal (and more) meetings
• Administrator and managing partner: weekly
• Management committee: weekly or bi-weekly
• One-to-one meetings with administrator and each department manager: weekly
• All hands staff meetings: monthly or quarterly or even annually depending on practice size
• Board/financial meetings: monthly in most settings
• Department meetings, held by each manager: monthly or bi-monthly

5. Excess costs and insufficient revenue
Profit margins have been falling over the past 20 years. Stagnation and even decline in third-party reimbursement, compounded by slowly rising labor, capital equipment, and general expenses are “scissoring” the average practice no matter where you do business. Even in the most technically vanguard practices, the adoption of direct patient payments for premium services is barely keeping up with pressures in other areas.

6. Management qualifications lag behind rising business, regulatory complexities
Not all office managers and administrators are up to the task. The primary cause is having not been educated or trained properly for the current day practice management challenges. It’s easy to overlook that the pace of your practice success has outgrown your manager.
It is common to meet an office manager that was hired 10 years ago when the practice had one doctor and five employees. The doctor handled the practice finances and the office manager was an all-around utility player, the glue that held the practice together. Ten years later, this practice has expanded to four doctors, 24 employees, and two locations. The office manager, working hard and laboring 50 hours per week, has become responsible for areas where she has received little formal training.
There are ways to correct this imbalance and retain the management team members that you think have the ability to continue to contribute to the practice’s success. In many cases, these managers and administrators are long-term, hard-working, dedicated employees and will be worth investing in the resources it takes to bring them up to speed.
a. Revise all management position descriptions, so owners and managers are clear about the performance expectations in the current environment.
b. Identify weak or missing skills that are needed to achieve higher performance in each position.
c. Create a development plan for each critical staff member, with a syllabus of skills to be tuned up.
d. Don’t just create a dry list of job skills, write down specific, measurable goals and deadlines.
e. Provide the resources needed by your administrator and managers. These may include: educational meetings, reading materials, professional coaching and guidance (your attorney to help the administrator appreciate HR law, your accountant to train senior staff on how to read financial statements, your general practice consultant to formally coach executive performance).

About the authors


Ms. Wohl is president of C. Wohl & Associates Inc., a practice management consulting firm. She earned her Masters of Health Services Administration degree at George Washington University and has more than 30 years of hospital and physician practice management expertise. She can be contacted at czwohl@gmail.com or 609-410-2932.  


Mr. Pinto
is president of J. Pinto & Associates Inc., an ophthalmic practice management consulting firm with offices in San Diego. His latest ASCRS•ASOA book, Simple: The Inner Game of Ophthalmic Practice Success, is available at www.asoa.org. He can be contacted at pintoinc@aol.com or 619-223-2233.

Similar challenges for ophthalmologists around the world Similar challenges for ophthalmologists around the world
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