$1.2 Million Realistic For A Solo OD?
By Jerry Hayes OD | in
|
10/14/2009 - 5:15 pm
Dear Jerry,
I am in my thirteenth year as a solo practitioner in a rural part of southern Indiana. My town has four optometrists in various settings, plus a Wal-Mart Vision Center.
I see patients 35 hours per week and expect to gross $500,000 with a net of 35% in 2009.
I see possibly one private pay patient per day, with the rest being Medicare, Medicaid, VSP and EyeMed.
Here is my question: You frequently discuss the topic of Collected Gross Revenue without any qualifying information such as patient care hours, geographic location and insurance saturation.
I am trying to use your data to evaluate my practice, but
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Dr. Hayes, Very nice
Dr. Hayes,
Very nice reply.
Many practices experiencing low nets & low per patient revenue are merely participating with too many low fee vision plans. As you've pointed out for decades - doctors cannot make up fee discounts via increased volume.
I know of dozens of O.D.s collecting well north of $1M per year. Some urban, some small town & some rural. Most are heavily medical.
Terry
My favorite subject. As I
My favorite subject. As I approach my 30th year in practice I continue to ask myself...can I get over that $1m mark working five days a week with my 2.5 employees. I get close every year but never have gone over it. I am always told...just add a couple of employees and you can do it. The two I have seem to spend a bit of their time on various celebrity web sites. I can't imagine what they would do with another person playing on the computer.
But I digress. The real question is "how to do that magical say...$375/patient."
The answer has been by selling high end frames and specialty contact lenses.
"Specialty" you say? You mean Acuvue Oasys for presbyopia?
No! I do not. Anyone and everyone can fit those. You mean "keratoconic" lenses..aren't those too hard to fit? Nope, not just those.
What I am talking about is a real specialty lens. Post RK, Keratoconic,orthoK,Synergeyes, RGP bifocals etc. Those will command a real premium. We will not discuss price, but suffice it to say that we are talking real money here.
These patients will not ask price, they will only ask can you help me?
How about outrageously priced frames? You say..I live in a rural area, no one will pay for Cazal, Gucci, etc. You couldn't be more wrong.
What I will say is that it costs a fortune to put in the product. But you can't sell it if you don't have it.
Let me close by saying the following. Those who know me will instantly recognize my statement. WE SELL WIDGITS!!!!! So, there are three components to a WIDGIT. Number of Widgits sold! Price of Widgit! And price you paid for the Widgit.
Its about that simple. There are simply no other variables.
Some of us do not sell Widgits. WE work in box stores. So, we have to sell medical care. But can you do that when the Box store decides your hours and pretty much sets your fees and pretty much allots you a certain space?
Nope. But the cost of doing business there is much lower and your margin can be higher. You must be on medical plans and have technology to make money. At least until the next few weeks I will continue to try to bill medical.
But with national health care beating on the door...all bets are off.
You can rush out and buy equipment and not be able to bill for it.
We live in a frightening time for health care. Lets hope its a bust. If not you will be seeing 35 patients per day but at a fixed fee.
I hope my comments are ever so slightly helpful and do not offend anyone.
Dr. Conners needs to raise
Dr. Conners needs to raise his fees and make sure that he is maximizing his reimbursement. I have a new solo practice that opened this past November 2008 and has a current revenue per refraction of $464 and has only been open for 10 months. My projected gross revenue for this new practice year one is roughly $500,000. I feel that 1.2 million for a solo practitioner can be an obtainable goal. I am also an Essilor MBA graduate and use the metrics in evaluating my own practice as well. Good luck Dr. Conners.
i've been doing metrics for
i've been doing metrics for years. can you define "gross revenue" as you use it, please. is it billed amounts prior to insurance reimbursement deductions, bad debt, discounts given, etc. or is it collected dollars only? in my practice there is a 10-20% difference between these two revenue amounts.