Survey Results For Q1 2009 Practice Performance

OD Practice Owners Continue With Their Can Do Attitude

Let me open by thanking all of you who responded to our Sixty Second Survey. To see the complete results, click here.

How Did Practice Revenues Compare For Q1 2009 Versus 2008?

Despite being in the middle of a 6% contraction in the US economy and the worst recession since the 1930’s, nearly 60% of the readers responding to our survey report that revenues are up for January, February and March of 2009.

• 57.5% were up in Q1 2009 versus 2008

• 18.9% were up 0-4%

• 15.1% were flat

Your Comments

• Our practice is up over 12.5% from Q1 2008. Combined with a nice mix of medical management cases, we see no slow down. I think patients are utilizing their benefits (VSP) etc., because they fear they may not have them at the end of the year.

• We are down 12% compared to 2008. I expect the same for this year and hope for return in 2010. Are private practices being hit the hardest?

• 2008 1st Q had two fantastic months and one dud. 2009 1st Q had 3 average, but steadily increasing months. It couldn’t equal the 2008 quarter.

• I am down 7% 1st quarter from last year and down 17% from 1st quarter of 2007. Local unemployment here is over 12%.

• We were down 0.2% in the first quarter 2009 compared to 2008 — flat as far as I am concerned — and 2008 was a record year 17.5% above our previous best. We had a doctor out for part of 2009 Q1 for maternity leave and lost a little bit due to weather. 

• We lost two key staff members to maternity and are down $38,000 in receipts from last year for the first quarter. We are presently training three new staff and regaining our ground. The economy has not changed our practice. Staffing has changed our practice.

• My first quarter was up almost 30% from ‘08. However, this month (April) has been very slow and as of now is looking to be about 10-20% down from last April. Hopefully we will see a rebound in May and June.

• My practice was up over 13.5% for Q1, and did 1.6 million last year. The key is premium products and billing for medical eye exams, especially when your vision plan patients have a medical plan that you accept.

• Our patient numbers dipped for the first time in February and March 2009; previously only glasses sales had dropped. In the Midwest, we are pretty lucky to have single digit unemployment numbers and foreclosure numbers.

What Is Your Forecast For All Of 2009?

62.3% of all respondents expected their ‘gross collected revenues’ to be up in 2009. 18.9% expected some level of decline.

Your Comments

• I expect low growth this year with next year back to normal. No worries here.

• My gross was down 33% in 2008 vs 2007. I am very apprehensive about the coming year with unemployment at over 9% locally.

• My practice is doing fine in Washington, DC. Perhaps the old adage that “Washington is recession proof” is correct.

• I have a high medical practice and have many GLC patients. Patients with eye disease always show up and usually receive good insurance reimbursement.

• The revenue per patient is declining slightly. Purchasing seems to be on necessity, not desire.

• Unemployment in this county is now over 12%. Many patients are simply not coming in unless they just have to.

• Our goal from 2 years ago was to retire a substantial amount of practice debt. That goal was completed mid 2008. So even though cash flow has slowed down the removed debt load, keep the net to the doctor the same.

• I am doing fine, but am very conservative on spending or adding more staff in case there is a downturn.

Do You Think Third-Party Plans Have Helped Practice Revenues?

Two-thirds (67.9%) felt that third-party plans such as VSP and EyeMed had helped practice revenues over the last six months.

Your Comments

• VSP, EyeMed and other third-party plans do help generate patient volume and revenue but do also erode our profitability in most cases.

• I believe that it would be the rare practice that would be paying its bills right now if it “let go” the third-party patients.

• Medicaid and Medicare help too. Even though in good economic times, Medicaid may not be as appealing.

• I feel the higher utilization rates for third-party is indicative that patients are rushing to use their benefits or are using them before they are layed off (a number of our patients have told our staff just that). I think the second quarter will be more indicative of the true trend for this year.

• I am seeing many patients currently who want to use their vision insurance before they lose their jobs. My big concern will come next year, when there is no insurance coverage.

• VSP and EyeMed have kept our patients coming through the doors. Out-of-pocket “extras” have reduced. Thanks for your blog. The topics are always pertinent.

How Is Morale?

80.5% of all respondents expressed that they were going to be “fine or were not concerned” in spite of a tough economic climate.

Your Comments

• Think positive and be creative and you will be fine.

• Be grateful for the patients that you do have whether they just have an exam or only purchase “what is covered” on their plan without any pressure from your optician/staff. They will return and be able to spend more as the economy improves.

• I’m concerned that the constant negative spin on the economy will drive patients to delay exams and purchasing eyewear. We have just begun to see some of this over the past month or so.

• I think most people are still doing fine, but are afraid to spend money except on items they can justify… such as healthcare. They may even be spending more on healthcare than in the past since it does not make them feel guilty or wasteful.

• You are crazy not to be concerned at this point and blessed not to be worried! We added a third doctor in Q4, so either we’re contrarian or stupid!!!

• I focus on the patient, not the news. We keep doing what we’ve done all along... present the best we’ve got and let the patient understand the value of what we provide.

• I feel fortunate to be firmly established in my community. Most of my new patients are from referrals of family, friends, co-workers. It would be challenging to start a practice today. My first couple of years were lean back in 1989.

• I am concerned that the recession may curb our growth. We are a new office (less than 4 years) so there seems nowhere to go but up, however, I do see changes in purchasing patterns.

• The low finance rates combined with the lower commercial space lease rates, has made this a great opportunity to expand our location and branch out into a second one. So while revenue may be stagnant, we are positioning ourselves now for the growth in the future.

• This is an opportunity to gain larger market share during a down economy. Patients gravitate to good practices.

Your Comments: General Thoughts And Advice

• This is the time to work your butt off and be receptive to the patient’s needs. Loyalty, loyalty, loyalty.

• Provide the very best eyecare and products available. Have a modern, progressive office and staff. Invest in yourself.

• Continue to give excellent service, use state of the art materials and set your fees to be profitable. 

• Give a value added experience to every patient who steps foot into your office!

• You better give every patient the best service and attention possible. You do not want to lose any patients because you could have provided better service, better products, better technology or “better whatever” in this economy.

• People are still willing to spend for good service and good quality products. 

• Focus on patient care and go out of your way to exceed their expectations. When you see a parent, look up the child’s information and be proactive in recommending what is best for their family eyecare.

• Leverage medical optometry. Don’t cut back on professional fees or product fees. Offer discounts on year-out CL orders and second pairs to give patients an incentive to purchase.

• Continue to look for and add services that others are not providing in your area.

• Recommend new, innovative products. Always recommend the best. Never assume the patient does not want the best.

• Focus on customer service. Act as an educator not a salesman in the optical. Education within the exam room can drive home the importance of examinations and/or follow up visits.

• Offer spectacle package pricing for contact lens wearers to reflect more than the 20% discount from VSP etc. Check out real CL pricing from on-line competitors and inform your patients that most of their pricing includes a rebate which your practice can offer as well. 

• As long as we continue to do what is in the best interest of our patients, they will respect us and return for eyecare next year when things will (hopefully) be better.

Agree with this blog? Disagree? Have a comment or question of your own? Click here to send me an e-mail. 

Disclaimer: The information and opinions contained on this site are for discussion purposes only and are NOT intended to serve as legal, accounting or investment advice. ©2009 Jerry Hayes, OD. Not to be reproduced without written permission of the author.