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CUT YOUR FIXED EXPENSES

HOW TO GAIN THE BENEFITS OF SHARING SPACE WITHOUT THE COMPLEXITY

GARY GERBER, O.D.

OUR CONSULTANTS are often asked by clients how to put a lid on fixed expenses, such as labor and occupancy costs, that continue to rise. One solution, that frequently comes up, is sharing space with another optometrist.

The thought is typically stated as, “Another O.D. proposed moving her practice into mine and sharing my space. Her lease is up in six months, and she is thinking about moving. I have extra room and a few days I don’t see patients, so she can share my staff. If we share all of these expenses, I’d effectively save a lot of money. Don’t you think?”

On paper, the doctor certainly would save a lot of money! But the devil is in the details of executing the arrangement. And, historically, we’ve seen that any monetary savings are rapidly consumed by newly inherited headaches.

Let me explain.

VOLUME AND INVENTORY ISSUES

First, consider volume. For example, if you customarily see about 10 patients per day and the other practice sees more or less, is it equitable to split expenses down the middle? What if volume is exactly the same but the other practice takes more — or fewer — hours to see those patients?

What about inventory management? If you sell a frame out of inventory, is your software (and staff) able to ensure that the other doc doesn’t wind up paying for it?

PATIENT PERCEPTION AND TECH

What about patient perception? A classic example: A patient of the other doctor stops in unannounced to “have the doctor take a quick look at the vision in my right eye with these new glasses.”

“I’m sorry, your doctor isn’t here,” says your front desk staff person.

The patient replies, “Oh, that’s OK. I’ll wait to see the other doctor who works here.”

Yes, these situations can be verbally navigated, but they introduce an awkward level of complexity that none of us would want to add to — in most cases — an already harried staff.

What about when the retinal camera needs a $1,400 replacement part? Who pays for it, and how much does he or she pay? After all, while you may not use the camera that was originally yours as much as the other doc, you bought it! And, before the other doc moved in, you used it exclusively!

AN EASIER WAY TO SHARE

I’m not entirely against these arrangements, and I know there are doctors who have made them work. But, there is an easier way to cut your expenses.

Share your space with anyone but an optometrist. Try to find someone who needs a small amount of space with little to no technology. An accountant, psychologist or attorney are examples that come to mind. In these cases you are simply subletting space and adding on administrative fees for use of items, like phones and utilities, and if phones must be answered, staff. With this arrangement, no inventory or technology (other than maybe phones and your Internet connection) is shared, and liability issues are also greatly reduced.

Next month I’ll discuss merging practices instead of simply sharing space and expenses. OM

DR. GERBER is the president of the Power Practice, a company specializing in making optometrists more profitable. Learn more at www.powerpractice.com, or call Dr. Gerber at (888) 356-4447.