December 2018

OPHTHALMOLOGY BUSINESS

Taking the temperature of a prospective practice


by Vanessa Caceres EyeWorld Contributing Writer

Assessing practice health is a crucial part of an ophthalmologist’s job search

If you’re an ophthalmologist searching for a new practice, you’ve probably given a lot of thought to where you want to relocate, as well as a few other job search factors. Yet you may need to devote more time to researching the health of the practice where you’ll potentially work.
Although some surgeons think of themselves as a one-man/one-woman show, they are part of a larger system that can positively or negatively affect their work quality, said Craig Piso, PhD, Piso and Associates, Larksville, Pennsylvania. Dr. Piso likens practice health to an aquarium; even if the fish are swimming around separately, the overall water quality has a ripple effect on every fish.
Practice health can have the same effect on surgeons and staff in a given practice.
However, practice health is usually not considered thoroughly enough by surgeon job candidates. There’s a tendency to make positive assumptions about how a practice is doing or to just have a general sense that the practice is “successful” without knowing any other details, Dr. Piso said.
“Most MD job candidates don’t ask about practice health indicators during the interview process,” said Hayley Boling, MBA, COE, chief executive officer, Boling Vision Center, Northern Indiana. “I think many MD job candidates don’t consider asking about these essential ‘vital signs’ for one reason: They don’t know what to ask.”
Ms. Boling agreed that assessing practice health should be part of the job search process. “Practice health indicators give you a picture of the practice from a non-emotional/objective perspective that allows a physician to draw better conclusions as to whether or not a practice has the appropriate foundation in place to pursue its strategic plan and goals for the future,” Ms. Boling said.
What practice health indicators are important to consider when deciding where to work?

8 ways to assess practice health

1. Look for a written strategic plan, including a mission and values statement. “Those that have it and work with it are more proactive,” Dr. Piso said. This kind of plan represents organizational core strength versus being successful but not known why the practice is doing well, he explained. It’s a positive sign if the practice has worked with well-respected consultants within ophthalmology to design their strategic plan, he added.
Dr. Piso thinks that having a mission and values statement is important enough that when you spend time at a practice, you should ask staff members you see in the lunchroom or in the hallway if they know the practice’s mission statement or the practice’s values.

2. Attend a board meeting if possible. You’ll get a true sense of the practice’s leadership dynamics by observing this, Dr. Piso said. If that’s not possible, ask about written board meeting minutes from the previous 6 months to find out if the organization takes action on ideas and plans versus letting things fall by the wayside. Ideally, leaders and staff move forward on plans in smaller groups outside of the board meeting and provide written plans on progress instead of trying to get the work done at the meeting itself.

3. Find out who’s really in charge. Attending a leadership meeting can give you a sense of this, Dr. Piso said. However, you can also ask an administrator, “Who’s really running the practice?” This may be a loaded question, but it’s a crucial one to get a sense of the power structure before you join a practice, he said. Ideally, the practice should have a culture of empowerment for everyone, including patients, Dr. Piso said.

4. Ask how or why the practice is successful. Leaders at a healthy practice will have a plan and work that plan; in turn, they can articulate what makes the practice successful and where they may be able to improve, Dr. Piso said.

5. Find out about work/life balance. Do surgeons and employees seem to be able to balance their workload with a home life, or are there long hours, late-night texts, and unpredictable on-call shifts? Make sure the real practice hours—not just the ones they say they have—are in line with what you want them to be, Dr. Piso advised.

6. Look for a Merit-Based Incentive Payment System (MIPS) score of 75 or above. “A practice’s MIPS score is indicative of its commitment to regulatory and compliance initiatives and staying up-to-date with physician payment methodologies,” Ms. Boling said. “It will demonstrate whether a practice is proactive or reactive in its approach to leadership and operations.”

7. Crunch the growth numbers. Two numbers to consider are practice revenue growth rate (3–5% or better is solid for a mature practice) and new versus existing patient rate. The new patient rate should be 15–30% of the practice total. “The existing patient rate should be relatively flat to ensure you’re not losing patients along the way,” Ms. Boling said. “A prospective physician should look to join a practice that has a need for their services as well as a strategy to attract new patients while retaining the existing patient base.”

8. Ask about AR. Accounts receivables (AR) provide insight into financial health. The AR out over 90 days should ideally be 18% or lower, but it should be 10% or lower in a practices with a lot of cash pay, such as those that offer LASIK, optical, or elective plastics, Ms. Boling said. Days sales outstanding—determined by AR divided by average daily billing—should be 25–40 days, but the lower the better.

The overall picture

If you are considering a practice and it doesn’t meet all of the healthy indicators outlined here, you don’t have to cross it off the list just yet.
For instance, if the practice gets a solid “B” grade for its health but it has other factors that are important to you—such as a great location—it still could be an ideal place to work for you, Dr. Piso said. “You’ll never check all the boxes,” he said. Other factors that could make a practice appealing to a surgeon beyond practice health include:
• availability of special technology
• having an ASC
• the ability to grow within a subspecialty
• salary and benefits
• how your family will fit within the geographic area
If a practice has one “sick” practice health indicator, it could be a good starting point for strategic conversations and operational inquiries, especially if you are considering future practice ownership, Ms. Boling said.
It’s a good sign if a practice knows that certain health indicators are not ideal and that they are working to fix it. “I’m a big believer that a practice should know their numbers, understand how they compare to similar practices in the industry, and be able to defend or explain why they are outside of normal limits with a strategy initiative or practice value,” Ms. Boling said.

Editors’ note: The sources have no related financial interests related to their comments.

Contact information

Boling: hboling@bolingvisioncenter.com
Piso: crag33@aol.com

Taking the temperature of a prospective practice Taking the temperature of a prospective practice
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