practice management

Bringing a New O.D. Into a Traditional Practice

Can today's private practices meet the needs of both O.D.s who have recently graduated and senior optometrists?

NEIL GAILMARD, O.D., M.B.A., F.A.A.O.
Munster, Ind.

■ I'VE NOTICED a disconnect between those recent grad O.D.s who are seeking to start a career and those senior optometrists who are looking for a doctor to join their practice. I hear from the former that they can't find good opportunities in private practice. I hear from the latter that they can't find a good doctor to join their practice. What's wrong with this picture?

In this article, I'll highlight a system that I believe is underutilized and poorly understood by both parties.

Diverging perspectives

Many veteran O.D.s who own private practices are concerned that their mode of practice is losing popularity among optometry school graduates due to changes in our society. They point to behavioral characteristics often assigned to the “Millennial Generation,” or to the high percentage of females and minorities enrolled in optometry schools. I certainly want to see professional practice continue to thrive, but I believe practice owners must adapt, and keep up with changes in society.

Many recent grad O.D.s have incorrectly pigeon-holed private optometric practice as a modality that pays poorly and is behind the times. Facing high student loan debt and a desire to enjoy life after years of financial restraint, many new graduates look for employment as their first position out of school. This seems reasonable to me, but I don't understand why the Holy Grail of employment opportunities seems to be the retail discount store or an ophthalmology practice. Perhaps this is traditional optometry's fault for not providing enough attractive employment offers, but it's time to change that. And new O.D.s owe it to themselves not to overlook one of the most rewarding modes of practice.

Read on for some ideas on how to bring an associate into a practice the easy way and how to make it successful.

Partnership vs. employment

Historically, O.D.s seem to favor associateships that lead to partnerships. Perhaps it's the attraction of cashing out part of an asset (the practice) right away and feeling comfortable about an exit strategy. Or, maybe senior doctors assume that any new graduate will want practice ownership. Partnerships are fine for some, but it's a mistake to generalize and ignore the advantages of hiring an O.D. as an employee. The increased cash flow can make a profit for the owner while allowing him to reduce his patient-care hours and concentrate on the management needs of the practice. Invariably at this stage of the practice, this additional management effort by the owner is sorely needed and results in practice growth. This growth in patient demand ensures the success of the new associate.

Times have changed, and many excellent optometrists are not looking to own a business. Those of us who own practices should be able to understand that business risk, long hours and income uncertainty are not for everyone. Some O.D.s just want to care for patients. Whatever the reason for that shift in interest may be, practice owners should embrace it, and offer employment options. We may end up with fewer professional practice owners, but there is no reason that a large percentage of O.D.s can't still work in that mode of practice.

When is a practice ready?

When a practice is well delegated and seeing a high number of patients per day, and is booked ahead for a solid week or two, bringing in an associate will produce a dramatic increase in gross and net revenues. The advance appointment demand is actually cash that is sitting out in the future, and I want to collapse some of that demand and bring it back to the present.

Since an employment relationship is much easier to end than a partnership, there is far less pressure on the practice owner. Of course, the practice owner should still perform due diligence and search for the right candidate, but offering a job to a new O.D. is easier than ever.

Compared with part-time O.D.s, I prefer full-time associates because they are more permanent — that is, more likely to make a position into a career. Part-time doctors are fine if that is all a practice can handle, but there is more risk of turnover as that doctor seeks better options.

Can private practice compete?

Traditionally, when a private practice brings an associate in to become a future partner, the associate often accepts a low salary because, as part of his total compensation, the new doc will earn an increasing share of ownership in the practice over a period of years. The associate earns his way into a partnership. That method can work fine, but don't make the mistake of thinking that low salary applies to O.D.s who are employees. If a professional practice is looking for an employee, then it must step up, and pay the going rate for employed optometrists.

Typically, retail optical chains and ophthalmology practices are two of the major employers of optometrists. Mega discount stores are generally included in the retail optical group although they often don't technically employ optometrists; they lease space to them in the optical department of the store. I see the professional optometric practice in competition for the optometry school graduate who wants employment, and I think we can compete very well.

Finding the going rate is not all that easy. You can ask around for comparable salary rates from other sources, but that information is somewhat guarded. An American Optometric Society (AOA) survey in 2007 showed the following median net incomes:

► Employed by O.D.: $85,000
► Employed by M.D.: $100,500
► Employed by optical chain: $91,000

These categories are not all that clear. Doctors who work at mega retailers would not be included because they actually own their practices and lease space. The “employed by O.D.” category includes doctors who are earning practice ownership while being paid a low salary. But even with those considerations, there is only $15,000 difference between the highest and lowest salaries.

Compensation is certainly an important factor in optometric job opportunities, but it is not the only factor. It's not surprising if some employed O.D.s like the working environment of a private optometric practice better than a retail optical or an ophthalmologist's practice. The office culture is different, and there can be advantages, such as staffing, instrumentation, office space and professional collaboration.

Finding the going rate

At some point, practice owners just have to jump into the market and negotiate with job seekers. That's how you really find the going rate. Consider offering a strong benefit package with health insurance, a retirement program, paid time off and other perks, such as AOA dues, continuing education expenses and malpractice insurance.

How to keep the new optometrist busy

Keeping the new doctor fairly busy is a key aspect to a successful association. Encouraging patients to switch doctors in a practice can be challenging, but we must start with the owner and the staff understanding and supporting that goal first. In many practices, the practice owner doesn't want to share his patients for fear his own financial production will diminish. The expectation is that the new doctor should build his own following. I disagree with this approach for employed doctors. That might work for a partnership situation, but we must be careful not to mix strategies.

In my view, it is the role of the practice to supply the patients for an associate O.D. Certainly through time, the associate O.D. will generate referrals and patient loyalty, but the initial patient base must be large enough to support the new O.D. This is one reason I prefer to pay straight salaries to associates rather than paying a commission or percentage based on revenue production. With a straight salary, there is a clear incentive to keep the new doctor as busy as possible.

Staff members who schedule appointments must also clearly understand the goal to book the new doctor. If this is left unclear, the receptionist may continue to keep patients with the doctor they saw previously and assign most patients to the practice owner out of a sense of loyalty. Naturally, the policy must be to always respect the patients' wishes and give them the doctor they prefer. But there are a number of patients who don't mind seeing a different doctor, especially if the appointment time is convenient.

The most important factor in converting patients to the new doctor is for the senior doctor to take himself out of the clinical schedule. If the practice owner typically sees patients four days per week, he should cut it to three. This may feel like the senior doctor's personal income will be at risk, but in a busy practice there is enough profit flow from the work of the associate to more than make up for the decreased production. And with the extra attention given to management, the practice will likely experience faster growth. The effect on this change in schedule is that the senior doctor's schedule becomes even more booked than previously, which serves as a bigger incentive for some patients to see the new doctor.

You may also consider these ways to fill an associate's schedule:

► Schedule the new O.D. to see all emergency office visits.
► Delegate specialties, such as low vision and vision therapy, to the new O.D. These bring a new market to a practice, and many of these services are paid out of pocket, as they are not covered by vision plans.
► Have the new doctor cover more evenings and Saturdays. These appointment times are in huge demand by patients. Take the senior doctor out of these times, and offer only the associate.
► As the senior doctor, actively refer patients to the new doctor for special care, such as dry eye therapy or multifocal contact lens fitting.
► Have the associate introduce herself to as many patients as possible. This may include walkins in the optical or patients seeing the senior doctor.
► Use external and internal promotion for the new doctor with signage, newsletters, the practice website and by featuring him at events, such as vision screenings and in-office seminars.
► Train the front desk staff to “sell” the new doctor with praise.
► Assigning the associate to some administrative tasks to fill in unused times, such as staff training and marketing projects.

Making it work

I recommend that practice owners develop an employment agreement that spells out the details, such as:

► Terms of the agreement and how either party can end the agreement. I like to make it fairly easy for either party to end employment.
► Office policies pertaining to associate doctors
► Duties
► Typical work hours
► Salary and employment benefits
► A restrictive covenant not to compete

Part of being a good employer is providing an office culture that respects employees, and this is especially true for doctors. It is fine to standardize some office procedures for all doctors, such as appointment times, fee schedules and insurance panels, but also know when to let the associate use his professional judgment. It is wise to discuss practice procedures in detail, and even include some observation time for a job candidate before making an offer of employment.

Remember that the associate is an employee and part of the attraction to that is to work a 40-hour week and go home. Don't expect the associate to think like an owner. If you want that, you need a partner.

Senior and junior O.D.s have plenty to learn about each other's needs. But if they can get together, great things can happen for all. Several of the Management Tip of the Week newsletters (see the sidebar, “Tips For New O.D.s and Senior Doctors,” below) provide more information on bringing an associate into a practice. OM

Dr. Gailmard is C.E.O. of Gailmard Eye Center, a five doctor group practice in Munster, Ind., and he is president of Gailmard Consulting. Contact Dr. Gailmard at neil@gailmard.com.