FIX THIS PRACTICE
Fees for Service
Why you should charge your patients for the services they receive.
By Richard S. Kattouf, O.D.

Q. I've been in private practice for 26 years. I see many contact lens patients who wear both soft and rigid gas permeable lenses.

When contact lens wearers come for yearly examinations, we check them with their contact lenses in and then remove the lenses to perform the comprehensive eye examination. This results in a great deal of chair time and technician time.

I know some O.D.s who charge for this extra exam and others who do a separate exam with the contact lenses in place. Our problem is that we've "trained" our patients to expect us to do the whole thing for one fee and in one office visit.

Do you have advice on how to fairly charge contact lens patients for exams?

Merle Berry, O.D.
via the Internet

A. Our profession has placed itself in a difficult position by hiding profits in materials rather than charging a fee for services. In the days before fixed fee vision programs, it wasn't difficult to keep the net income of a practice in proper ratio to the gross income.

The number-one reason doctors seek my consulting services is their low net profits despite having a large number of patients. Other factors that have made it difficult to garner profit from materials are the price of advertising, competition from mail-order lens companies (which patients perceive to be less expensive than an exam with their O.D) and corporate expansion into vision care.

Standards

I've noticed that most O.D.s charge contact lens wearers and non-contact lens wearers the same fee for a comprehensive eye exam. The following is a sample scenario in which this might occur:

• Patient (new) -- Lori (age 43). Having trouble reading -- no desire to wear contact lenses.
• Patient (former, home from college) -- Diane (Lori's daughter, age 20). Wearing contact lenses -- due for annual exam.

Let's evaluate the professional services required for each patient (see table).

Obviously, other tests you may perform would be standard for mother and daughter (e.g., extended ophthalmoscopy, retinal photography, blood pressure, etc.). Here, most O.D.s would charge their standard comprehensive fee to both parties.

How to make a profit

What services should patients be responsible for paying in your practice? Where should you make your profit? The answer? Time, skill and knowledge -- not just materials.

If your standard exam fee is $60, charge Diane $95 because you'll spend more time, skill and knowledge on her than on her mother.

O.D.s who charge a different fee with their standard exam still aren't usually making enough to profit.

Fee structures

Many of my O.D. clients lose income on every contact lens patient because they don't adequately charge for their services.

It's important for independent O.D.s to know what corporate and commercial practices charge or don't charge. I'm not suggesting you try to match these fees. Educate your patients as to what services you and your staff provide and how they differ from the "quickie" evaluations many competitors perform.

I teach my clients methods to change their fee structure without irritating patients and causing consequent erosion. This is a huge change in O.D. behavior because many don a passive attitude about fees.

You can't thrive financially on profits from materials alone -- concentrate on fees for service.

Act your role

Medicare classifies us as optometric physicians. We've won most legal battles at state levels. We're regarded as "real" doctors, so let's charge fees like real doctors.

Dr. Kattouf is in private practice in Warren, Ohio, and he's president and founder of two management and consulting companies. If you'd like Dr. Kattouf to address an issue you have with your practice, call (800) 745-EYES or e-mail advancedeyecare@hotmail.com.