Review of Ophthalmology

Stick to Your Knitting When Adding Services

Want to know which additional services will work best in your practice? Listen to your patients.

Michelle Stephenson, Contributing Editor
6/7/2012

With costs on the rise and reimbursement amounts on the decline, many ophthalmologists are looking for ways to boost their bottom line. This article will explore options and ideas that have worked for ophthalmology practices and others that may be tempting but not worth the effort in the long run. 


Three Strategies

Shareef Mahdavi, president of the medical device consulting company SM2 Strategic, sees three effective ways to bring more money into your practice: Invest in your customer experience; add Brevium to recapture patients; and add other services, such as Botox and other cosmetic procedures.

• Invest in your customer experience. Data from many industries makes a compelling case that organizations providing a superior customer experience outperform their competitors, says Mr. Mahdavi. “Just look at Apple and their retail stores,” he says. “They figured out that it’s about hiring the right staff, providing ongoing training and development, and making the customer experience forefront in the culture, not an afterthought.”

“People will pay more to go to a place where they are treated better. So much of the encounter between a patient and an office is not the doctor visit. It includes the website, how [the patient is] treated at the front desk, how the staff interacts with him, and how the office is run,” he adds.

He notes that, as health care becomes more constrained, ophthalmologists will have to do more procedures to make the same amount of money, and the office experience can begin to feel like an assembly line. “Costs have gone up and revenues have gone down,” he says. “However, if you invest in the customer experience, people will come because your office is a really enjoyable place to come and breaks away from the typical medical experience. And if you are offering refractive surgery, premium cataract surgery and other aesthetic services, they are going to be willing to spend their time and money on those things.”

• Add Brevium. Brevium is software that automatically searches every patient’s history nightly to identify lost patients, using a far superior interface with a practice management system than a built-in “patient recall” module, Mr. Mahdavi says. The company’s website guarantees a 500-percent return on investment. It can be fully customized to focus on specific goals for each doctor. For example, it can identify only surgical candidates or only high-risk patients.

“You wind up getting revenue recovery for patients who were falling through the system. I met one practice with four ophthalmologists who recovered $1.7 million in the first year using Brevium,” says Mr. Mahdavi.

The product is pay-as-you-go. “You pay $100 per doctor per month,” he adds. “Then, you pay $10 for every patient who comes back to your office based on Brevium identifying him. That’s more important than adding other services because this helps you be more efficient in what you are doing already.”

• Add new services. Many ophthalmology practices have added new ophthalmology-related and non-ophthalmology-related services to their practices in an attempt to increase revenue. The most commonly added services are cosmetic procedures and products, as well as hearing services. Although many ophthalmic practices would think this is the first area to focus on for revenue growth, Mr. Mahdavi advises doing this last among his recommendations. “While it is tempting to simply add new services, it would be a mistake to do this before addressing the more fundamental issue of how customers are treated in the practice,” he says.

According to John Pinto, a practice management consultant based in San Diego, “the auxiliary services that have worked the best are within the eye-care sphere. From the earliest days, doctors have been selling nutraceuticals and vitamins to their patients, with limited success. A big drive a few years back was to get into laser skin resurfacing. You needed a $30,000 to $50,000 unit, and those devices are now sitting without much use and without generating any income. Quite commonly, these devices would be brought in, and all of the staff would have the procedure and all of the spouses of the doctors would have the procedure, and that is sort of where it ended.”

He notes that even in large practices that add an ophthalmic plastic surgeon and an aesthetic center that offers massage and other spa services, the new services typically don’t produce much additional income. “Efforts outside of the eye-care sphere are pretty checkered,” says Mr. Pinto. “There have been recent efforts to dispense hearing aids in ophthalmology practices, and their story is somewhat more mixed. I have a number of clients who have found a degree of success with this, and I have other clients who have tried hearing aids and it has not worked in their hands. However, highly motivated practices that are able to add an ENT or a hearing aid component to the practice have experienced enduring success.”

Mr. Pinto says that it doesn’t make a lot of sense for ophthalmologists who have an abundantly growing patient base to look so far afield from general and geriatric eye care to try to build out their business. “Quite commonly, I will get calls from surgeons who say they would like to get into a non-ophthalmic ancillary area,” he says. “I’ll ask about their premium IOL rate, and they’ll say 5 percent or 7 percent. These are individuals who could readily build their premium rates up to 20 or 25 percent, and it’s sitting right there in front of them. The important message is to stick to the knitting in almost all cases. When an opportunity arises to add a new device to the practice that’s not within the ophthalmic sphere, don’t just take it on faith. Make sure that you are talking to a wide cross-section of fellow ophthalmologists who have been able to successfully implement that new non-eye-care modality.”

He recommends trying to increase the surgical density of your practice, trying to add patient visits, buying into a local ambulatory surgical center, and adding optical dispensing to your practice before adding non-ophthalmology services.

“Way down the list is adding Latisse or hearing aids or selling vitamins to your patients,” he says.


Finding Success

Center for Sight is a group of 24 doctors with eight locations on the west coast of Florida. Twenty-five years ago, the practice consisted of one ophthalmologist. Today, it offers a wide range of services.

According to James Dawes, chief administrative officer, in addition to elective procedures such as LASIK and advanced IOLs, the practice also has a full-service optical and offers all primary eye-care services.

The practice also provides facial cosmetic surgery, Botox, laser resurfacing and hearing services. “About 52 percent of our annual revenue comes from elective services,” says Mr. Dawes. “A lot of ophthalmology practices have tried to add other related services in an effort to grow their revenues and profits. In my opinion, in doing so, they have left some money on the table. In a lot of cases, I see practices losing their focus and getting away from their core service. They have lost the sense of who they are. Our most profitable business line is cataracts and advanced lenses, hands down. Additionally, our optical is very profitable, with margins greater than 20 to 25 percent. I recommend expanding your ophthalmic product lines before branching out,” he says.

The practice employs a board-certified hearing instrument specialist who performs the comprehensive exam and fitting of the hearing aids. Additionally, the practice has a facial cosmetic surgeon, a dermatologist and dermatology physician assistant, a hair transplantation specialist and two medical aestheticians.

“In our practice, cosmetic surgery has a solid profit margin, but it is less than our ophthalmic product lines,” he says. “The skin-care aesthetics business, like peels and facial skin care treatments, is much less profitable. It ends up being more of a value-added service that we provide to our cosmetic patients. Laser skin resurfacing is higher on the profitability side. We find that Botox and dermal fillers tend to be less profitable. One of the challenges with Botox and fillers is that they have become a commodity, and many people are offering these services.”

Mr. Dawes notes that Center for Sight’s success is a result of knowing the patient base. “Our practice is in one of the most affluent counties in the country, so we can do things that a lot of practices can’t,” he says. “It is a process of examining your market and examining the patients who are already in your practice. We have been successful in taking our existing patient base and providing additional elective services, largely because of existing goodwill and trust. We already have a relationship with them, so when patients need a blepharoplasty or an eyelid tuck, they can come to us. Then, in five years, these patients may require jowl lifts or full face lifts, and they are already used to coming to our practice for their cosmetic surgery needs.”

When deciding which procedures to offer in your practice, Mr. Dawes suggests listening to your patients. Before his practice offered cosmetic procedures, patients would commonly ask where to go for eyelid work. Additionally, if they were unable to get an appointment with a dermatologist, they would ask the practice for advice. “We thought we had space, so we added a dermatologist, and that has worked out really well for us and our patients,” he says. “When patients tell us they need something, we try to do it. It’s not about sitting in a board room and creating something to sell to patients. It’s listening to your patients and understanding what they want and then assessing the practice and determining whether that is something the practice can effectively deliver without diluting the focus on their primary business. We added hearing services because our patients were coming to us and saying that we did such a great job on their eyes that they wished we could fix their ears. They wished they could hear like they could see. We realized that there was a correlation between hearing and vision loss. Both senses diminish as we age, and the combined impact of this dual sensory loss can be devastating to a patient’s quality of life. Initially, we were resistant to adding the service, but the patients were requesting it and the technology was available.”

Center for Sight’s hearing services are so popular that the practice recently won the Sarasota Herald Tribune reader’s choice award for the best hearing center.

His practice stays in tune with patients by surveying all patients every time they come into the office. “The most important question we ask them is whether they will refer to Center for Sight,” he says. “Consistently, we are at 98 or 99 percent of patients who say they will refer to us. That’s very important to us. We see almost 100,000 patients per year. Every response to every survey goes directly to me, and I respond to those surveys every day. I send them out to our staff. On a daily basis, we modify our procedures and facilities based on the feedback we get from patients. For example, we just spent $35,000 on new chairs for one of our office locations because we had multiple requests from patients to fix the padding in the chairs. We have had continuous growth over our lifespan as a company, and I attribute that to listening to the patients.”

Kameen Eye Associates, located in Towson, Md., also offers auxiliary services and has taken a “boutique” approach to practicing ophthalmology. “Rather than seeing 100 patients a day, I’ve moved more toward the boutique model where I see a lower volume of patients and spend more time with them,” says Anthony Kameen, MD. “These folks become patients for life. Dan Durrie helped me figure this out.”

He begins each visit with a five-to seven-minute educational explanation of the optics of the eye. “I do this myself, and I show patients their OCT images, Pentacam and lens and retinal images,” Dr. Kameen says. “It’s amazing how impressed patients are when you can show them their own eyes. It has increased my referral rate because people leave saying it’s the best eye exam they have ever had. In addition to this, we are doing Botox, dermal fillers, Latisse and the things that everybody else is doing, though I am less impressed with the revenue in this area. It does, however, give us something to talk about on our Facebook page and on our website. My primary focus is still advanced technology IOLs and LASIK.”

The patient experience begins in the reception room with high-end furniture and hands-on customer service. However, Dr. Kameen notes that the reception room only seats about 12 people because he believes that part of the boutique experience is not keeping the patient waiting. “People always comment that our waiting room feels like their living room at home,” he adds.

The result of the boutique experience is that Dr. Kameen is implanting premium lenses almost exclusively. “People come here knowing they are going to get a premium eye exam with premium diagnostic equipment, so they are already prepared for the premium lens discussion. It makes that discussion so much easier,” he notes.

He has also worked to recapture LASIK patients who have not been to the practice in a while. “I’m a product of the ’90s LASIK boom where we were doing so much LASIK that our first goal was to get good results and our second goal was to get these people out of the office because we needed room for the next patient, he says. “I believe that boom is gone forever, so now we have completely flipped our practice model to retaining those patients instead of moving them along. I have gone back and made contact with the people I did LASIK on years ago. We have invited them back into the practice, and their response has been terrific.”

He notes that reconnecting with these patients has been fun and profitable, as well. They are now reaching the age where they need cataract surgery, and they have already undergone an elective ophthalmic procedure, making them great candidates for premium lenses.  REVIEW


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