An optometric career can afford you enormous flexibility in terms of lifestyle, professional challenge, personal fulfillment, and financial compensation. However, the reality of decreasing insurance reimbursements and the rising costs of wages is diminishing cash flow and doctor compensation at an alarming rate.
Concerned? It is time to take back control of your finances by creating a cash-pay specialty within your practice. This will provide insulation from a turbulent optometric marketplace, bolster your cash flow, and provide the financial flexibility to pursue other meaningful areas in your life.
Why you should adopt a cash-pay specialty
The average optometrist in a private practice makes approximately $400 in top line revenue per hour seeing patients for routine exams.1 When a practice relies heavily upon insurance, enormous pressure exists to see more patients per day or work additional days to pay the bills.
This encumbers our ability to:
- Be present in the moment.
- Think clearly.
- Perform high-level analysis.
- Problem solve, while actively listening to our patients.
- Weave treatment recommendations into a warm and sincere conversation.
Seeking the elusive work-life balance is necessary to acknowledge the role of rest, relaxation, and rounding out our life experiences in becoming an effective clinician.
How can we work fewer days while seeking work-life balance?
The solution can be found in the creation of a cash-pay specialty, as this financial structure creates an increasingly profitable model of practice, affording practitioners a schedule that requires fewer hours in the clinic.
Choosing your practice’s new specialty
The process is easier than you may think.
Begin by considering areas of optometry you are most passionate about, such as nutrition and wellness or pediatrics. Next steps:
- Contemplate meeting the needs of an underserved population in your area, possibly ocular surface or vision related learning difficulties.
- If you love technology, look into how the industry supports myopia management with updated diagnostic automation or the expanding area of wearables.
- For those who love creativity, think about contact lens fitting from a whole new perspective: you could be treating conditions like megalocornea with scleral lenses.
- The area of medical aesthetics is also prime ground for unleashing creativity.
Practically speaking, take some time to research your geographic area. Find the answers to questions like:
- What is the level of affluence?
- What are the age demographics and do they support the need for your specialized services?
- How many providers already offer the services you are considering?
Do the research
Now, go deeper into learning about your area of proposed specialization. What is the most efficient way to identify patients that could benefit from your services? Research the process for gaining additional credentials that might drive patients to your practice, such as a College of Optometry in Vision Development (COVD) or Academy Fellowship.
Become adept at diagnosing conditions within your area of specialization and stay on the cutting edge of treatment approaches. Cross-pollinate your expertise with specialists outside the field of eyecare.
For instance, Vanessa Van Edwards book, Cues: Master the Secret Language of Charismatic Communication could be used to hone your communications skills. In her book, she discusses the importance of using small verbal and non-verbal signals to dramatically improve the effectiveness of your recommendations. This could directly improve rates of conversion to treatment when presenting options to your patient.
Generate referrals
Referral sources will be the life-sustaining pulse of your specialty clinic. They must be thoroughly sought-after and continuously nurtured. Gone are the days when professionals gave you an entire lunch hour for a friendly introductory discussion about the services you offer. Simply sending a packet of business cards with some glossy brochures typically falls flat as well.
Your best bet is to provide support to their clinics/businesses. For instance, bring lunch and offer education for their staff in a subject tangentially related to your area of expertise. This is an excellent way to naturally begin a relationship. Offer to collaborate on cases via email. Upon receiving a referral from another professional, after gaining written permission from the patient, share a concise report of your finding and treatment recommendations for their records.
Always thank professionals for their referrals and indicate your intention to return the patient to their clinic upon completion of your services for ongoing care. Gather a pipeline of patients 3 to 4 months prior to the start of your specialty clinic in order to hit the ground running. As a benchmark, I recommend that within the first 6 to 12 months of running your clinic, you should have an average of six new cases a month. I would suggest aiming for a goal of a 75% conversion to treatment rate.
Don’t forget to factor in starting costs
1) Analyze projected costs, both start-up and ongoing
What equipment will you need to start and what can be added at a later date? What physical space is required? Do not underestimate the need for space and plan for what you envision your practice will use in 5 years. Plan to reinvest 2% of your top line revenue from this clinic to ensure proper maintenance and future growth.
2) Don’t skimp on investing in your staff
With regard to acquiring and training staff, seriously consider a significant investment of both time and money in this area. The staff working with these patients are not easily replaced. Look for individuals that are motivated to grow this clinic alongside you. Consider offering wage incentives based on key areas of growth, such as number of new patients in a quarter, or number of cases that converted to treatment after the evaluation in a given month.
3) Schedule for profitability
Create a schedule that allows staff members to be highly effective. For every 6 hours of doctor time seeing these types of patients, allocate a minimum of 2 administrative hours for a highly-trained staff member to handle incoming communications, scheduling, and marketing.
With regard to the schedule for the doctor, if you happen to be booked out for regular exams 4 weeks ahead, consider dropping your lowest paying vision plan to create space in your schedule for these patients.
Look carefully at the revenue coming with each insurance company. Don’t follow the herd mentality of over-focusing on filling each exam slot; being busy does not mean that you are profitable. You are better off using your time working on developing your new speciality than seeing a patient for a paltry $45.
4) Make financial decisions based on your practice’s top line revenue
Once you have identified your monthly income requirements and costs, you can reverse-engineer the monthly top line revenue needed and use this to create your business strategies and inform your business management decisions.
Stick to the numbers, stay away from making decisions based on what “feels right.” Set your rates as necessary to realistically fulfill your revenue requirements, taking into account your current OD/hour revenue rate for seeing private pay exams, the time required to diagnose and treat these specialty patients, and add a 20 to 25% premium based on your expertise.
For example, if you are currently making $400 in top line revenue per hour seeing your current patients, consider setting your rates to bring in $500 in top line revenue per hour with your specialty patients.
Structure your evaluation and treatment rates based upon how much time you will need to spend with the patient. Set your goal for the number of cases per month based upon your costs and revenue goals mentioned above.
Specialty care means customized practices
Beyond the financial potential and work-life balance, remember that opening a specialty clinic also allows you to treat your patients the way YOU want to treat them.
Customize care to their needs, spend more time directly with patients, and offer services that insurances don’t cover. Maintaining your general clinic alongside your specialty opens up several synergies, not the least of which is the loyalty of a patient receiving exceptional care.
