EYECARE BY THE NUMBERS

The Five Percent Factor

Find empty slots, add a revenue resource…then do it again

these are challenging times for ECPs. In some respects, you’re living in a perfect storm, with increasing leadership demands resulting from a confluence of changes in technology, vision plan penetration, medical reimbursements, distribution channels, consumer awareness, and a host of other challenges. With eroding profit margins, it’s incumbent upon every ECP to seek operating improvements and to drive change.

But how do you bring about change within your organization when you’re so deeply involved in patient care? How do you find enough time in the day to run your business and have a life? Perhaps it’s time to invoke what I call the “5 Percent Factor.”

TIME FOR PROFIT IMPROVEMENT

As a leader, you’re likely investing more than 40 hours per week in your practice. But odds are that you’re spending the majority of that time doing the routine, day-to-day work of patient care or practice management.

Our experience is that very little time is actually invested on leadership, developing the strategies necessary to bring about incremental change. Many will likely say that the time doesn’t exist or, because of a lack of leadership training, you don’t even know what you should be doing.

FINDING THE TIME

Let’s start with time. What might occur if you invested an additional 5 percent of your work week focused on the future? If you’re currently working a 40-hour week, invest an additional two hours per week on profit improvement. That time likely already exists in your schedule in the form of holes in your appointment book.

So, first you will need to crunch out your holes. A 20-minute time slot that goes unfilled is “garbage time.” In that short amount of time, you can likely accomplish little.

Begin this exercise by reviewing your schedule over the past month. If you averaged four hours or more of empty appointment slots per week, crunch that time out of your appointment schedule (not your office hours).

This will yield three results:

• First, your appointment book will now fill up (which makes everyone more productive).

• Second, you’ll now have four hours of solid, uninterrupted time to focus on improving your practice.

• Third, your staff will now also have some quality time to focus on process improvement…without a dime of lost revenue. Thus, your first “5 percent factor” is directed at freeing up more time to work on your practice.

It’s critical to get your entire team engaged. Use a staff meeting to brainstorm ideas. If you and your team approach the challenge with an open and supportive mindset, you’ll be amazed at the results.

One key question to consider is, “What are we doing now that we can stop doing?” Look for both process improvement and process elimination. Also, look for technology additions that reduce staff time on task.

INVESTING THE TIME

Now that you’ve carved out some time, the critical question becomes, “Where do you invest your time?”

For this exercise, let’s assume that your practice is average, seeing 1,500 comprehensive exams per year, and that your patients generate an average of $350 in revenue (for a total of $525,000).

What might you accomplish if you took your extra two hours and invested them in increasing your patient volume by 5 percent? Try it!

How? For the next month (four weeks, two hours per week), focus on the following:

a) locating a source for an additional 75 patients (1,500 × 5%), and

b) coming up with a plan to achieve that 5 percent unit growth.

There are scores of ways to add 75 patients. What a great brainstorming session for your next staff meeting. The desired outcome is to find a single source category for this extra 75 patients; a focused approach.

After you’ve identified the targeted source and laid out a plan for achieving success, invest your two hours per week in leading execution. Because your staff now has extra time, they can work on the tactical implementation while you move on to the development of your next opportunity.

INCREASING REVENUE PER PATIENT

What about the other element of revenue: collections per patient? Now that you’ve got your plan in place to add more patients and your staff is executing the tactical plan, how do you apply the 5 Percent Factor to improving your per-patient revenue for your existing clientele?

In simple terms, take your 5 percent time efficiency improvement and invest it in a 5 percent revenue-per-patient improvement.

Here are a few ways to make that happen:

• What might happen if you added items such as nutraceuticals to your offerings?

• Can you improve your AR penetration by 5 percent?

• What about sunwear or second-pair sales?

• How about working to improve your lens capture rate?

Again, there are many ways to improve revenue per patient. Brainstorm the opportunities and identify that one action that is most likely to generate the desired 5 percent improvement.

As with your first exercise, once you’ve figured out what to do, step back and let your staff execute while you move on to the next practice improvement activity. Be a coach and provide support, but avoid the “doing.” One objective of this process is to build a team that can effectively execute on the leader’s vision.

— Alan Cleinman

Alan Cleinman is founder and CEO of Cleinman Performance Partners, a business consultancy specializing in the development of high-performance optometry practices. Information in this column is derived from the database of Cleinman Performance Network, the members of which are generally very large optometry practices, and is not intended to represent national averages. ©2014 Cleinman Performance Partners, Inc.