Broad changes and shifts are conspiring to have big impacts on how profitable your vision care practice is, and while some of these are out of your control, others are definitely controllable — to a point, at least.
Shutdown reasons include debt, competition, poor management, regulatory issues, and the increasing complexity of independents trying to survive in a business world seemingly run by sprawling corporate health care systems.
These emerging issues are grabbing headlines and forcing many providers to rethink their business and operational strategies as they seek to reduce risk and position themselves to take advantage of market opportunities. This ranges from adapting to falling profits, the need for doctors to pay attention to the business side of their practices, the rise of non-physician practitioners, and taking advantage of changing technologies.
Here are 13 trends shaping the future of vision care practices that you should be aware of.
- Healthcare reform presents financial hazards — and opportunities. Forty-nine percent of eye care professionals say healthcare reform is their biggest financial concern, according to an Eyecare Business market survey. So far, the Affordable Care Act has been a mixed bag for vision care. While 61 percent of eye care professionals have reported a decrease in profit margins, there are opportunities. For instance, many medical plans now cover wellness eye exams for children. These services don’t produce large profits, but they do bring in new patients, which can make all the difference.
Challenge: Challenges to your bottom line and uncertainties around reimbursements.
Solution: Hunt for the silver lining in the ACA: Use low-profit engagements to expand your customer base for down-the-road profits.
- Profits will begin to drop at two to four times the current rate, predicts Dan D. Chambers, MBA, COE, chief administrative officer at the Key-Whitman Eye Center in Dallas, TX. “In a traditional ophthalmology practice with an average overhead, a 10% reduction in collected revenue will require a nearly 30% increase in patient volume to sustain a physician’s present income,” Chambers estimates.Labor and benefits will likely take the biggest bite out of your vision care practice’s profits, says Chambers. To offer competitive benefits to your staff, some of which are now mandated, many practices will need to focus on practice management and on bringing new patients in the door.
Challenge: Falling profits pose an existential threat to your practice.
Solution: Maximize your current resources, survey your staffing needs, and increase your patient volume.
- The old days of doctors ignoring the business side of their practices are gone. Yes, you need to hire smart back office staff to handle marketing, billing and other revenue boosts, but you also need to stay involved yourself. “Put no fewer than eight hours per week into co-managing the practice with lay management staff,” advises ophthalmic practice management consultant John Pinto.
Challenge: Doctors may solely be focused on patient care.
Solution: Set aside time to understand your business operations and engage with the experts already in your office who can illustrate them for you.
- More practices will turn to OD-MD co-management as a survival strategy. “The ratio of ODs to MDs will grow from one-to-one ratios to two-, three-, and four-to-one ratios,” Pinto predicts. “By 2024, group ophthalmology practices without material optometric staffing will be rare,” he writes in an Ocular Surgery News article.
Challenge: Staffing needs and trends are changing.
Solution: An OD may have been caring for a patient for a decade or more, and can pass on critical insight and information to the MD.
- We will see more non-physician practitioners in vision care. “To optimize clinical staff to the highest levels, practices will likely hire more nurse practitioners and physician assistants, Chambers says.
Challenge: Staffing costs are one of your largest expenses.
Solution: Optimize your PAs and NPs, who can enhance patient care, expanded access and services, and create new revenue opportunities.
- Practices continue to take the slow ride to technological change. Like the most diehard Foghat fans, vision care practices take it easy when it comes to some kinds of technology. While 75 percent of ophthalmology practices have EHR, only 50 percent of optometry practices do. And while social media can be a powerful marketing tool, regulatory concerns prevent many practices from racing full speed ahead. Nearly half of surveyed eye care practices have a Facebook or Twitter account, according to Eyecare Business. But only 30 percent of those practices post at least once a week on social media, with most practices posting much less frequently. It remains to be seen whether social media becomes a dead end road for marketing.
Challenge: Many practices are slow to adapt to industry changes.
Solution: Social media engagement can be massively effective and surprisingly inexpensive. A comprehensive social media outreach program can position you as a leader in the community and engage with a whole new group of potential customers.
- You may have to merge with another health care organization just to be able to afford your clinical equipment. Larger practices can justify the cost of cutting-edge eye care and surgery equipment because it brings in higher volumes of patients, but “smaller practices simply won’t be able to afford new technology” with fewer patients using the services, warns Chambers. Consolidation will be one way to pay for climbing technology costs.
Challenge: Clinical equipment is becoming enormously expensive.
Solution: Mergers can have a number of benefits, though pre-purchase budgeting and consulting may provide additional cost-savings benefits.
- Your practice manager will need to be a geek. To make a practice profit today, office managers need to master HIT, data mining, financial benchmarking, health care policy, and more. If you have a great practice manager who is weak in one of these areas, get him or her training or hire support staff or consultants with these competencies.
Challenge: Modern practice management requires a close eye on benchmarking and metrics.
Solution: Great teams don’t just happen. Specific skillsets may have to be cultivated over time; the best time to plan for that is now.
- Secure your supply chain. As COVID-19 has shown, supply chains everywhere are vulnerable, and your practice depends on being able to secure the supplies it needs when it needs them. To confront this, consider increasing your on-site storage, fine-tune your existing supplier relationships, and locate back-up suppliers who can help out in a pinch.
Challenge: Numerous disruptions can cause your practice to run out of key items.
Solution: For those accustomed to simply opening a supplier’s page and clicking to order, understanding who supplies what you need to run your practice may be a first step. Find solutions to materials, labor, sourcing, and logistics as your prepare for supply chain disruptions.
- Focus on diversity in your office. It’s no secret that baby boomers are retiring at a rapid rate, and as today’s unemployment rates show, filling empty positions can be nearly impossible no matter how much money you offer. Practices can offset this risk in part by fostering a climate of diversity and inclusion, which helps drive better outcomes, greater engagement, and higher employee retention. You should also consider investing in IT tools and programs that give employees great flexibility to work remotely.
Challenge: Practices without a diverse workforce may encounter staffing problems.
Solution: Leverage diverse job boards, highly diversity on your career site, offer targeted internships, engage in unconscious bias training, reassess employee benefits, and create diversity-friendly policies.
- Virtual care. It’s now possible for consumers to take eye exams online and receive prescriptions in minutes. COVID-19 showed the value of virtual care, and this growth will likely have staying power. Organizations that can harness the shift toward virtual care will be partly insulated against changing norms.
Challenge: Simple, cheap online care may siphon your customer base.
Solution: The U.S. Department of Health and Human Services has made it easier to offer telehealth services, and some of these policies may be continued or be modified to be made permanent.
- Harness artificial intelligence and automation. AI and automation are reshaping industries around the world, and these technologies present great opportunities to eye care professionals. AI can reduce redundant tasks, eliminate biased reading errors, identify patterns, and reduce costs. Real-time analytics can be used to expedite care and boost productivity in non-clinical areas, such as supply chain, revenue cycle management, and customer service.
Challenge: AI and automation can be complex and expensive.
Solution: From AI-powered chatbots to robotic surgery, there are wealth of automation and AI-driven technologies available to providers. A consultant may be able to help determine which are best for your practice.
- Get ready for the future of care. Tech is invading the operating room in fascinating ways. Some developments on the horizon include using AI to detect conditions like diabetic retinopathy by analyzing images of the eye taken with a retinal camera and using software to detect problems. Bionic eyes are under development which consist of a cornea, pupil, lens, retina, iris, and optical nerve and which are designed to achieve functional vision goals. Synthetic corneas may restore vision for those who can’t see, and robots are revolutionizing surgery and improving operative precision.
Challenge: New tech is expensive to buy and may present a sharp learning curve.
Solution: ODs who embrace new tech find they have more dynamic, more secure operations that pave the way for optimized care.