visionomics^®

How to Manage Key Practice Benchmarks

Visionomics^®, a series of COPE- and ABO-approved business-building courses, will be held at this year's International Vision West show. The courses focus on strategies for assessing and maximizing practice profitability. In this series of articles, Eyecare Business—the official trade media partner for Visionomics—will feature some of the program's speakers.

This month, Mark R. Wright, OD, FCOVD, president of Pathways to Success—Optometrists in Westerville, Ohio, and faculty coordinator of the OSU College of Optometry Business Management Program, discusses his course, “How to Manage Key Practice Benchmarks,” at Vision Expo West.

An important element in creating and sustaining a financially successful practice is the ability to identify, measure, and fix the various components of the business. This can be done by following these steps.

1. IDENTIFY AND APPLY KPIs.

Key Practice Indicators (KPI) are the business elements that you should be measuring so you know how your practice is doing.

■ INCOME. This includes fees collected, per-patient income (and frequency of visits), number of new patients, and accounts receivable.

■ PRODUCTIVITY. This indicates how much productivity is being achieved over a unit of time, and figures in exam prices, doctor/staff hours, and cost of space.

■ EXPENSES. Includes cost of goods, payroll, equipment, marketing costs, and general overhead.

Once you have identified the KPIs of your practice, measure them against established benchmarks in the industry (see sidebar) to ascertain if you are, for example, spending too much for your space or reaping enough profit from exams.

2. PUT SYSTEMS IN PLACE.

Consistency is the key for excellent patient care and solid financial performance. Once you have identified an area as a problem, you can put in a consistent system that is followed by every staff member in every office without exception.

3. UTILIZE TREND MANAGEMENT.

Charting practice performance trends can be misleading if not viewed within the larger picture. For example, if your practice is on trend to gross a million dollars this year, that's great. But if the three-year trend has been grossing a million and a half dollars a year, you've identified a problem.

Once you have the trend, and you have the benchmarks by which to measure that trend, you can come up with a proactive plan to fix it and move it forward. EB