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FINANCIAL FACTOR

For growth, chart your future

But think twice before committing, or it will be “back to the drawing board.”

Marty McFly: “Hey, Doc, we better back up. We don’t have enough road to get up to 88.”
Dr. Emmett Brown: “Roads? Where we’re going, we don’t need roads.”

- Back to the Future, 1985

We are still waiting for a time machine to come along (preferably in the form of a DeLorean). In the meantime, we are obligated to continually research and establish direction for the future course of our practices. In order to establish a five-year plan, it is essential to visit another practice that is in line with a future vision of yourself. Before you adapt that vision, though, think it through.

GOLDILOCKS THEORY: JUST RIGHT

I recall getting the grand tour on one such visit and gasping in awe of the size, volume of staff, patients and overall space of this marvelous practice. I returned to my smaller, more modestly staffed practice eager to go bigger and better. I made immediate plans for growth, which included the increasing staff and patient volume, and expand the physical space with more square footage.

So, what was the result? Well, you know that old saying, “Be careful what you wish for …”?

If only I had heeded my brother’s warning that “a bigger office and bigger business is not always better.” Instead, because his business was not in health care, I had shrugged it off.

But my brother knew what he was talking about: Once upon a time, in another industry, he had the big office; now when he gets tours of such offices, he just smiles and feels sorry for the owners. He knows that bigger is not better — it just means more overhead and the headaches of managing a large staff.

So, think twice before embracing the American motto “bigger is better.”

But, because I did embrace it then, I devised a plan and took action. I moved the practice from an office of 1,200 square feet with the visual field machine literally in the closet to 11,000 square feet that included the clinic space and a new surgical center component. As for the visual field machine, it now had its own wing in an open-space testing area.

This move allowed for significant growth over the next five years — but there were unintended consequences that are worthy of reflection.

IS BIGGER ALWAYS BETTER?

With this move, the practice grew significantly each year; at the same time, however, overhead sky rocketed as well. Every day there were meetings on creating and enhancing systems within the office.

More employees meant more management and more impromptu discussions about more problems and concerns. A higher volume of patients meant more positive experiences to create for them in the office and more good outcomes to deliver.

SOMETIMES, MORE IS MORE

We instinctively desire growth and expansion. However, often it is necessary to contract, to pull in the reigns in order to balance the realities of cost. An easy target is to assess the utilization of staff in each clinic. We researched reasonable benchmarks and adjusted them according to the volume and type of clinic.

For example, glaucoma clinic was testing intensive and required more staff compared to a postoperative clinic. However, increasing staff can sometimes boost efficiency and the number of patients seen in clinic. For us, more staff to help with patient education and the establishment of a clinic dedicated to new patient cataract evaluations led to a 50% increase in the number of evaluations per day.

Having employees dedicated to this specialized care also reduced stress for the rest of the staff, the doctors and the patients. The utilization of staff is typically a natural place to begin the journey of cutting costs and establishing systems of efficiency.

ON THE OTHER HAND, OFTEN REMOVING IS IMPROVING

Our billing department became a sore spot for management. On reflecting over the prior year, we realized the turnover in this department’s staff was contributing to rising costs. The time it took existing staff to train a new employee in billing was costing the practice the equivalent of a full-time employee because of the employee turnover. With this department often understaffed, there was constant stress trying to catch up and no ability to work on improvements and best-practice procedures.

We looked at this cost and compared it to the fee for outsourcing our billing work. This opportunity cost would allow our practice to decrease staff, reduce management concerns of hiring and training and allow a partnership with a company specializing in up-to-date billing procedures.

Our favorite plus: We could finally complain about billing problems to this company rather than having to look in the mirror!

In our case, we reduced our staff by five full-time employees, repurposed 1,200 square feet of office space and had a billing manager that started coming to work happy again. Meanwhile, making this change reduced our overall costs for billing compared with the year before.

DREAM … BUT BALANCE

We instinctively reach for “bigger.” It’s part of the American dream. However, this focus on growth means parallel growth in management concerns, overhead and responsibility. It creates an impetus to improve and to contract in segments of your practice in order to balance your practice … and life.

Marty McFly had a time machine to see the future. As far as your future, well, try to find a car with a flux capacitor and you’ll be set. OM