By Riley Uglum, OD (co-author of The E-Myth Optometrist)
We’ve discussed in previous articles about how entrepreneurial ODs need to leverage systems like a CEO does. A thriving business depends on many different types of systems, but none are more important than those that drive revenue – and even more importantly – PROFITS. A private optometry practice is no different. Savvy ODs know that profits are what allow them to:
- Hire AND RETAIN skilled staff by paying competitive wages and bonuses
- Provide training and CE for doctors and staff
- Invest in new technology that increases quality of care, provides good ROI and allows maximum delegation
- Market their business for increased growth and brand awareness (internally and externally)
- Increase the attractiveness of their facility
- Provide a better patient experience
- Increase their own income
What do you think the key revenue and profit driving systems are for your practice? We track a number of metrics in our business, BUT NONE ARE MORE IMPORTANT THAN OUR “FILLED SLOT PERCENTAGE” We recently did an exercise with our staff to illustrate how important this number is by calculating the impact of one missed appointment per day. That doesn’t sound like much, but let’s run the numbers together.
Every entrepreneurial OD should be tracking their revenue per refraction (or full exam). It’s easy to calculate by simply dividing total revenue for a given time period by the number of exams (with refractions) performed during that same period. I believe that a medically oriented practice with a robust optical should have a revenue per refraction greater than $500. But let’s use $350 in our hypothetical calculation. That means that the practice loses $350 in revenue for every unfilled full exam slot in the appointment book. If we see patients four days a week and have one open slot each day, that’s $1,400 lost per week. OVER THE COURSE OF 50 WEEKS, ONE EXAM PER DAY AMOUNTS TO $70,000! For a practice netting 30%, that’s $21,000 of profit that can’t be reinvested in the business or taken as owner income.
Any system (or systems) that will increase revenues by these amounts, is well worth creating and implementing. Following are what I would consider to be key elements to consider.
- A robust pre-appoint and patient education system
- A “filled slots” metric tracked by an office manager or front desk staff
- Weekly reporting of that metric at staff meetings
- A bonus system that is directly impacted by this metric
- A system for filling last minute cancellations
- A referral system
- A reactivation system for missed appointments & patients who are overdue for their exam
Many offices already do a lot of these things. But when staff really understand how one patient a day can affect practice growth (and the size of their bonus), these systems become more important to them. Measuring and tracking are critical for success. The system for filling last minute cancellations is worth a closer look, because this is the most common reason for unfilled exam slots.
In our office, we often have a message on the answering machine in the morning from a patient that can’t make their appointment that day. Sometimes this only gives us an hour or two get that slot filled. But our front desk simply follows a system whereby they move someone from later in the day (or another day) into that slot. That gives them more time to re-fill the open slot they just created. They’ve done this so well and for so long that we just take it for granted that it will happen. When this system was first implemented years ago, it had a significant impact on our revenue and profits.
It’s easy to appreciate an optician that makes a great sale, but remember that these sales are the end result of your revenue driving systems.
Photo: Copyright: olivier26 / 123RF Stock Photo
Dr. Riley Uglum is a 38-year veteran of the optometry profession and is President of Eye Care Associates Of New Hampton. He is also the founder and CEO of Promethean Ventures, a company whose mission is to help private practice health care practitioners prosper by combining systemic health care strategies with time tested wealth creation tools. He has co-authored a book titled The E-Myth Optometrist with Michael E. Gerber, and is a Michael E. Gerber Partners’ Company author and founding partner. Dr. Uglum is also executive director of the National Wellness Alliance. He can be reached at firstname.lastname@example.org