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NEW AOA REPORTS TAKE AN IN-DEPTH LOOK AT INCOME RECEIVED BY OPTOMETRISTS

Direct Patient Pay Comprised Largest Segment of Total Gross Billing

■ Direct patient payment accounted for most of the total gross billings received by optometrists in 2009, reveals the Income from Optometry Report, the first of three reports based on 2009-submitted paper surveys from American Optometric Association (AOA)-member O.D.s that comprise the AOA's 2010 Census of Optometric Practice. (The other reports: Employment of Para-optometrics and Practicing Optometrists and their Patients have not yet been released.) Specifically, direct patient payment accounted for 30%, while government programs, such as Medicare and Medicaid, accounted for 20%, VSP accounted for 18%, private medical insurance accounted for 16%, self-directed vision plans accounted for 13%, and other sources of payment accounted for the remaining 3% of gross billings collected, the report shows. (See “Sources of Gross Billings Received,” right.)

So, does this data indicate O.D.s are moving away from government programs and private-pay insurance because the reimbursements are continuously falling?

“No,” says Charles B. Brownlow, O.D., a practice management consultant, who has presented more than 400 lectures on medical record keeping and has served as a consultant for several major healthcare consulting groups and insurers. “O.D.s comprise possibly the only healthcare profession that still has a significant percentage of ‘private pay’ patients,” he says. “This proves to be advantageous to patients, as O.D.s' charges are partially based on real ‘actual’ fees, whereas healthcare professionals with few or no private pay patients are free to set their fees higher, in hopes of capturing higher payments from insurers.” He adds that the non-medical eyecare segment of typical optometrists' practices remains significant, as many Americans remain without insurance coverage for exams without medical reasons and eyewear.

Breaking it down

In looking at the Nine U.S. Census Divisions, the report further reveals that direct patient payment was highest in the East North Central division (i.e. Illinois, Indiana, Michigan, Ohio and Wisconsin); and government programs paid a larger percentage of total billings in the East South Central division (i.e. Alabama, Kentucky, Mississippi and Tennessee). Further, the largest payments by private medical insurance were in the New England division (i.e. Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island and Vermont). Finally, the Pacific division (Alaska, California, Hawaii, Oregon, Washington) accounted for the highest percentage of VSP payments (32%), with the lowest percentage of direct patient (24%) and government programs payments (15%).

Sources of Gross Billings Received

O.D.s billed an average of $842,269 for visioncare services in 2009, and 87.8% of these billings were collected, the report also shows. Also, gross billings per O.D. owner averaged $615,653, and average billings per optometrist in the practice were $459,494. Further, private practice O.D.s collected 87% of total billings on average, while corporate practices collected 93% of total billings in 2009.

In addition to billing data, the report also reveals that the overall net income of U.S. optometrists averaged $130,856. East South Central Division O.D.s had the highest average net income at $166,553, with the Mountain Division (Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming) reporting the lowest at $110,157.

Respondents

According to the AOA, nearly eight in 10 (77%) respondents said they practiced in major metropolitan areas, 14% said micropolitan areas (population more than 10,000 but less than 50,000), and 9% said rural areas. Roughly 70% were male, while 30% were female. Also, 30% of respondents were located in the Midwest, 15% in the Northeast, 29% in the South and 26% in the West. Three-fourths of respondents said they practiced privately, 8.6% said they were in corporate practices, and 16.4% said they were in other practice types (e.g. working for an ophthalmologist, at a hospital or college). Incidentally, 40% of those who said they practiced in other practice types said they were employed by ophthalmologists. A total of 84% of private-practice O.D.s said they owned their practices, while non-owner O.D.s made up the majority (51%) of responding corporate practice optometrists. Those O.D.s who've practiced for more than 30 years comprised 27.6% of respondents, while 27.2% said they've been in practice for 10 years or less, 24.4% for 21-to-30 years and 20.8% for 11-to-20 years.

Limitations

Although the report provides compelling data on the economic status of the profession, the AOA admits its findings are limited based on three factors: (1) The survey may have inadvertently excluded AOA-member docs from participating, due to incorrect mailing addresses or delays in delivery. (2) The O.D.s were self-selected, so the survey may have attracted responses from O.D.s doing exceptionally well financially. (3) The results may not apply to the entire profession, as only AOA members were invited to participate.

To download the full executive summary of the report, visit www.aoa.org/Documents/Research%20In formation/ExecSummaryFinal.pdf.

TearLab Corporation Launches Website

The website allaboutdryeye.com, from TearLab Corporation, is a new consumer website and social media program designed to help people suffering from Dry Eye Disease (DED). Specifically, it provides a place for them to share their experiences, ask questions, discover the science behind DED, connect with other patients and with doctors, and locate an Accredited Dry Eye Center, or one that provides TearLab products.

MANAGEMENT MEMO

How to Avoid Hiring the Wrong Employee

Bob Levoy, O.D., Rosyln, N.Y.

■ Three out of four surveyed business owners admitted to hiring at least one employee they later wished they never had, according to a recent survey from online payroll provider SurePayroll. Many optometrists report this same regret. You can avoid this problem through the following steps.

► Do not hire in haste. After interviewing numerous job applicants, a good question to ask yourself before finally hiring someone is: “Would I have hired this person when I first started, or am I hiring this person just to fill the position and end the search process?” Remember: A “no hire” is better than a “bad hire.”

If you need someone right away, hire through a temporary agency, pay overtime to current team members, or contact a former valued employee who may be available to fill in until a replacement can be found.

► Identify the competencies required to successfully perform the job tasks and responsibilities. Then, incorporate behavior-based questions into the interview to gather information about a job applicant's actual behavior during past experiences that demonstrate those required competencies. When hiring a receptionist for example, you might request: “Describe a situation in which you dealt with individuals who were difficult, hostile or distressed. Who was involved? What specific actions did you take, and what was the result?” The logic is: Past performance predicts future performance.

► Allow your staff to interview job applicants and narrow the list to a few from which you'll make the final selection. Or, let your staff have the final approval of someone you've tentatively decided to hire. Among the benefits: It will make your staff realize their ideas and opinions are important. It may alert you to traits you've overlooked or underestimated. And, having given their approval, it will result in enhanced teamwork.

► Use an employment application that contains an authorization for reference checks. (A person who refuses to sign it should immediately raise a red flag).

Conduct extensive reference checks, including those with past employers, as well as background checks on driving, criminal and credit records when appropriate (résumé falsifications are rampant nowadays). If you don't feel qualified to do this, hire an outside agency to do it for you.

► Learn from your mistakes. Hiring mistakes are costly and disruptive. So the take time to examine your hiring process, and make corrections where necessary to avoid repeating the same mistakes.

ROBERT A. KOETTING, O.D., FOUNDER OF THE KOETTING ASSOCIATES

Practice Management/Contact Lens Guru Remembered

■ Robert A. Koetting, O.D., embraced areas of eye care from which many of his colleagues shied away. Yet his risk-taking not only paid off, it also helped to shape the practice of optometry, say those who knew him. Dr. Koetting, age 85, died August 7, in Bedford, Texas. He had Alzheimer's disease.

“Bob was one of a rare group of individuals who elevated our profession to heights it had never seen before,” says Carmen F. Castellano, O.D., F.A.A.O., who worked with Dr. Koetting and now owns and runs The Koetting Associates, in St. Louis. “His passion for optometry and success in practice was unmatched.”

“I attended one of Bob's lectures as a student, and I worked with him later on several educational projects,” says Neil Gailmard, O.D., M.B.A., F.A.A.O. “ … He had a huge impact on my interest in practice management. He will be missed by so many.”

Dr. Koetting was the son of a Clayton, Mo. optometrist, whose family had been in eye care since 1897, according to the St. Louis Post-Dispatch. He attended St. Louis University, and after graduating from the Southern College of Optometry in Memphis, he worked with his father.

In 1960, Dr. Koetting invented a slit lamp designed for contact lens prescribing. In 1962, he opened his own practice, which specialized in contact lenses and, in particular, specialty fits, according to the newspaper. During this time, few optometrists were fitting contact lenses. Dr. Koetting, however, not only wore contact lenses himself, he required all his staff to wear them as well, says the St. Louis Post-Dispatch. In addition, he also hired paraprofessionals to enable him to schedule more patients. This, too, was a rarity at that time.

“He never was afraid to challenge the progression of our profession, always the first to try new avenues, testing the boundaries of success and failure,” says Robert L. Davis, O.D., F.A.A.O., of Oak Lawn, Ill., who knew Dr. Koetting through his father and worked with him on a project.

Indeed. In addition to helping to make contact lens wear mainstream, Dr. Koetting was one of the first health professionals to embrace consumer advertising as a means of building one's practice—something he attributed, in part, to his thousands of patients and reputation as a trailblazer in the contact lens field, according to the St. Louis Post-Dispatch.

Dr. Koetting also lectured and wrote extensively on contact lens wear and practice management.

“When I edited the AOA journal in the 1950s and when I edited Optometric Management in the 1970s, I often called on Bob for literary contributions and for advice,” says Irving Bennett, O.D. “He never let me down. As busy as he was running his huge and successful practice, he took the time to talk to me on the telephone, to pen a cleverly interesting article and do it with short notice, or to give a talk, often extemporaneously.”

Other accomplishments: Dr. Koetting co-founded the International Society for Contact Lens Research, simultaneously chaired the American Academy of Optometry's (AAO) Cornea and Contact Lens Section and the American Optometric Association's (AOA) Contact Lens section.

Finally, Dr. Koetting received several optometry-themed awards. These include the AOA's Contact Lens Person of the Year and the Distinguished Service awards, the AAO's Eminent Service Award, and the Southern College of Optometry's Lifetime Achievement Award.

“Just like an architect, his blueprints showed many of us how to build the modern optometric practice,” says LaMar Zigler, O.D., of Columbus, a friend of Dr. Castellano's who says he read many of Dr. Koetting's books. “His influence carries on through many successful practices across the country.”

Don Walter, O.D., of St. Louis adds, “His profound memory for local optometric history and for every joke he ever told, were part of his charm. The beautiful clothes, the rumbling voice and laugh, the ability to think outside the box, the pride mixed with real humility, we'll miss but never forget.”

Robert A. Koetting, O.D. is survived by his four children, seven grandchildren and five great grandchildren. Grandchild Cecilia Koetting is part of the Southern College of Optometry's Class of 2012.