"Move to the Medical Model"
Evolve your practice business model to increase profitability and tap non-traditional revenue streams.
Gil Weber, M.B.A.
Adapted with permission from Optometric Management
© Copyright, 2007. All rights reserved.
On the surface, the typical optometrist's and ophthalmologist's dispensaries look essentially the same. They each carry the same frame lines and use the same lenses fabricated by the same laboratories. But, if you looked beneath the surface of the typical ophthalmologist's dispensary, you'd be struck by how different it is from the typical optometrist's vis-à-vis its positioning (image) as a natural extension of the clinical practice, in its cash-generating sales techniques, and the mix of private-pay and visioncare plan income. This is because ophthalmologists focus on the medical model of dispensing eyewear.
"Surgeons should stick to surgery," is the common sentiment among ODs. But, physicians are grappling with relentless Medicare reductions and, collaterally, similar reductions from commercial payers who base their fee schedules on Medicare's. These reductions have made high surgical fees a thing of the past, forcing ophthalmologists to consider adding patient-elected services that previously weren't part of their patient care armamentaria. Optical dispensing is one such service that has allowed MDs to rebuild diminishing cash flow.
I realize this may make you angry, as general ophthalmologists are now into a long-established part of your practice. But instead of decrying those ophthalmologists, why not examine how dispensaries operate under this medical model so you too can energize cash flow and retain and attract patients?
The medical model
The medical model of dispensing reduces dependency on vision plans and likely means seeing fewer total patients in the dispensary, but it also focuses on increased revenue and profitability per patient. So why does the typical ophthalmologist's dispensary participate in relatively few vision plans?
MDs determined that exam and eyewear reimbursements from most vision plans were poor, imposing way too much administrative hassle for mostly meager reimbursements. So, they made a conscious decision not to participate in "loser" plans.
Although an MD's gross revenue may have increased due to patients added from taking on multiple vision plans, MDs decided it simply wasn't economically smart to work so hard for so little profitable return. As a result, most dispensing ophthalmologists have made a conscious effort to distance themselves from most vision plans and to accept vision plans only selectively -- as supplements to rather than the driving force behind dispensary activities.
To do this dispensing ophthalmologists have focused on a "medical model" for their dispensaries. This model is built on a number of key principles that for the most part aren't readily compromised by the sometimes onerous operational constraints that many vision plans impose on a practice. Some examples:
• The dispensary is presented to the patient as an extension of the clinical side of the practice, and part and parcel of the continuum of medical care. In the best medical model practices, patients won't perceive the dispensary primarily as a retail operation selling products after the doctor is done with the patient.
For example, the typical ophthalmology dispensary is in a medical office building, in a setting surrounded by other medical practices and in an environment that focuses on nothing but patient care. Think how differently that image speaks to a patient when compared to an optometric dispensary that is located in a strip mall and may be positioned between a pizza parlor and a hair salon.
Perception is reality for your patients. If you want to re-image the practice and adopt the medical model then it may be necessary to rethink location and surroundings. It does not require moving into a medical office complex, but this certainly may mean moving into a free-standing building where the practice's professional image ("We deliver high quality healthcare services") is not utterly compromised by any strictly retail-oriented surroundings.
In addition, the ambiance within most ophthalmology dispensaries tends to be more subdued, with greater emphasis on eyewear as a solution to an eye health concern and with less emphasis on fashion trends. Now, please don't misinterpret or misconstrue that statement.
Of course the best medical model dispensaries do not miss any opportunity to sell upscale frames at upscale prices. And the same goes for premium progressives or photo-chromatic lenses. But at the same time, in the best practice medical model dispensaries those photochromatic lenses and the mechanics behind their darkening are more likely to be presented as the best solution to an individual patient's needs rather than as "cool."
Again, please don't take offense if your staff performs to a high level. This is simply the hard truth when comparing the best medical model dispensaries to a typical optometric dispensary.
• Staff typically has more detailed training in properly assessing and addressing each patient's visual and lifestyle needs. There is increased training emphasis on optics as a function of visual well-being, and less on fashion consulting. A staff well trained in the skill of appropriately and properly presenting eyewear benefits, quality, and value helps to move increased numbers of patients beyond the managed care mindset of, "I only want what my insurance covers." This generates increased sales volume and higher revenue per pair of spectacles.
To raise the skill levels of their staff, optometrists should encourage those working in the dispensary to attend courses at professional meetings. And I'm not talking about the typical optician's continuing education course on how to adjust frames or verify finished eyewear. Rather, staff needs to be properly trained in how to meet and greet patients, how to analyze the prescription, how to engage the patient in discussions of visual and lifestyle needs designed to extract essential information. This allows the staff person to make appropriate recommendations and to "sell" the benefits of the best solutions.
And dispensary staff certainly should have a working knowledge of basic ocular health and refractive issues including, perhaps, understanding a bit about macular degeneration (AMD), refractive surgery, presbyopia (especially as it applies to the patient with an intraocular lens [IOL]), vertical imbalance, and many other issues that go the heart of addressing an individual patient's visual needs through proper frame and lens selection.
• Staff invests appropriate time with each patient. While education in optics and eyewear is important, this education will not benefit the patient or the practice unless staff spends appropriate time with each and every patient addressing visual and lifestyle needs. This also means a lot less time dealing with administrative paperwork, rules, and regulations before, during, and after the patient encounter. This time investment simply may not be possible in a practice overwhelmed by vision plan patients who only want their "free glasses." But it could be the key to transitioning successfully from a vision plan-dependent practice to the medical model.
Appropriate time spent with, and a higher level of service and personal attention devoted to, each patient's visual and lifestyle needs will justify asking higher prices in a medical model dispensary, and in the best practices this will result in higher profitability per patient than is realized by the typical vision plan-dependent practice. These and other factors contribute to an overall high level of satisfaction that patients express after getting their eyewear from dispensaries in the best medical model practices.
Now, this is not to say or imply that optometric practices in general do a poor job in taking care of patients -- far from it. Rather, this is to point out that even in taking care of patients and generating return business, many vision plan-dependent practices are spinning their wheels year after year — seeing large numbers of patients and dispensing lots of eyewear — but not profiting to the levels that should be achieved from their exhaustive labors. It is time to recognize that some, perhaps most, vision plans are not worth the time and effort. Having a schedule full of vision plan patients might be seen as winning the battle, but ultimately if you're not making a reasonable profit on each and every one of them, it's losing the war.
Transitioning to the medical model
To transition your practice from the visioncare model to the medical model, follow these steps:
• Conduct a patient satisfaction survey. In order to transition to a medical model you must understand — really understand — what your patients want and are getting (or not getting) out of their patient care experiences in your practice. So, it's essential you conduct a patient satisfaction survey. A properly constructed and executed survey should gather invaluable information that will help focus your thoughts on what changes are necessary to "re-image" your practice. In addition, you'll gather the information necessary for weaning the practice off its dependency on visioncare plans.
A full discussion on survey design and surveying techniques goes beyond the scope of this article, but at a minimum a good survey will do the following:
1) ask questions that elicit meaningful responses and generate useful data;
2) guide the practice to take appropriate and timely action based on the data;
3) guide the practice to measure and remeasure progress over time.
• Take steps to assure your staff learns about visual and lifestyle analysis and how they can become adept at the essential skill of presenting premium eyewear without being perceived as "hardselling." This should be a part of the ongoing educational activities referenced above.
• Get onto medical eyecare plans. To realize your practice's full potential in terms of revenue and profitability you also need to transition the clinical side of the practice to the medical model. This means reducing dependency on routine exam patients coming from low-paying visioncare plans and, simultaneously, increasing the number of services billed to major medical insurance. Of course getting onto medical eyecare panels is tough. It's frustrating and at times the obstacles are nothing short of unfair. But, it's necessary unless you are satisfied in a role that leaves your practice dependent on selling product.
In some states, such as Texas, ODs can bill medical eyecare services to various payers and get paid for their work. On the other hand, ODs in some states such as California find many doors to medical eyecare panels closed by the intransigence of Health Maintenance Organizations (HMOs). The rules (whims) of some payers can be exasperating. Still, not every door to providing medical eyecare is closed to optometrists, not even in California. It's a matter of finding the opportunities and capitalizing on them.
Optometrist Kelly K. Kerksick, of Columbia, IL., offered this telling and compelling advice in the November 2006 on-line version of New O.D., a sister publication of Optometric Management. "Building a practice on the medical model can be very time consuming. In my experience, this segment of my patient population has been the most loyal and the most compliant to return to the office for recommended follow-up care. As a result, it's time well spent attempting to establish as many strong networking relationships from neighboring physicians as you can. These networking opportunities can drastically increase the base of patients requiring your medical services."
One way Dr. Kerksick recommends you do this: Introduce yourself to all the primary-care practitioners in your town and invite them to your practice so they can see what you do. Once they see all the instruments you use and how you work with patients, you'll get tons of patient referrals. And, this will help you when trying to get on a medical/surgical plan, she says.
"The representative of one insurance company I really wanted to get on pretty much told me that it would take an act of God for me to get on their plan. Instead of giving up, I did three things: First, I visited one of the local primary-care doctors who refers a lot of patients my way, and I asked him if he'd be willing to write a letter to this plan on my behalf, which he did," Dr. Kersick explains.
"Second, between 20 to 30 patients from one of the major employers in town contacted the plan and said, 'I pay a lot of money for this insurance. Dr. Kersick's in my home town, so why aren't you guys credentialing her?'"
The final thing Dr. Kerksick did: She contacted this major employer and explained to the Human Resources representative that putting her on the panel of this particular medical plan would actually save the company money in that it would mean less paid time-off for the employee, as he would no longer have to travel a distance to receive treatment from a practitioner who was on the plan.
"The HR person ended up contacting this company as well, and now I'm on the plan," she says.
Plato once said: "There are two things a person should never be angry at, what they can help, and what they cannot."
Translation: You can help yourself when it comes to the growing number of dispensing ophthalmologists and unacceptably low visioncare plan reimbursements by employing the medical model for your practice, so why dwell on the fact that several ophthalmologists now offer dispensaries?
After all, you can't help what others will do, so take action and make a difference in your own practice.
Gil Weber is a nationally recognized author, lecturer, and practice management consultant to the managed care and ophthalmic industries.