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April 2008

Practice Perfect: Coding & Reimbursement
Boost Practice Efficiency, Part Three—When to Hire an OD
By Chris McDonagh, Senior Editor

Why add an optometrist to your practice? “As a physician, you may be hiring an optometrist as an extender in an attempt to increase your personal productivity,” said Ann Hulett, CMPE, COE. “Or you may be trying to increase the productivity of the practice as a whole by hiring an optometrist to function relatively independently as a primary eye care provider.” Prior to seeking an optometrist, your practice needs to analyze what it hopes to achieve, said Ms. Hulett, who is the administrator at an eye care group in Pueblo, Colo.

“Make sure you know and verbalize your objective for the new position. This objective will provide a basis for deciding the future employee’s relationships within the practice. It will determine whether the template for the optometrist’s appointment schedule is built in tandem with the ophthalmologists’ and how care will be overseen,” said Ms. Hulett.

“In many cases, the relationship is less that of an employer to an employee, and more that of one professional to another professional,” said Richard H. Lee, MD, who is in private practice in Oakland, Calif. You need to establish the specifics of that relationship and the responsibilities of the optometrist to the ophthalmologist. “Perhaps most importantly, you want to be very clear on how this person is going to be compensated. Will he or she be a salaried employee? Will you offer a productivity incentive by paying a percentage of his or her collections?”

“If you haven’t employed an optometrist before, it can be challenging to develop the necessary protocols and procedures for care,” said Ms. Hulett. “But the rewards can make that effort well worthwhile.”


Why Hiring an Optometrist Could Boost Your Practice

The OD can personally generate income for the practice. “Although optometrists are more expensive than technicians (see last month’s Practice Perfect), they differ from techs because they can generate money on their own,” said Derek Preece, a senior consultant with BSM Consulting Group, a nationwide practice management company. Much of a tech’s work involves working up patients rather than generating specific billable income, “but an optometrist can see patients all the way through the exam and send them home, and the practice gets paid for that exam,” said Mr. Preece. Furthermore, said Ms. Hulett, “Vision plans are multiplying in some parts of the country. If your practice wishes to see people with vision plan coverage, hiring an optometrist may make participating in those plans more easily affordable for you.” Generally, vision plan patients don’t see you for medical or surgical reasons, they see you for a routine eye exam and a prescription—so your optical shop is likely to get more business, said Dr. Lee. “The flipside is that the fees paid by vision plans for exams or eye glasses are heavily discounted. So this won’t necessarily be the most lucrative side of your practice.”

The OD can free up the MD for surgery. “As a rule, ophthalmologists like doing surgery,” said Ms. Hulett. “And with the growing population of seniors, there will be more surgery that needs to be done. Adding an optometrist to the team can give physicians more time to do what they enjoy doing the most—surgery.” Suppose, for example, a surgeon has been doing a lot of routine eye exams in order to build the practice’s patient base, said Mr. Preece. “And he or she is having a hard time fitting new patients into his or her schedule because of all the postoperative patient visits and all of the routine eye exams. Directing those kinds of exams to an optometrist will allow that surgeon to see more surgical patients.”

The OD can improve a solo MD’s quality of life. “With an optometrist in the office, the physician can take time off knowing that there is someone there to take care of the patients,” said Mr. Preece.

How will adding an OD impact the bottom line? Even if increasing revenue is not the primary motive for adding an OD, the financial analysis is still important, said Mr. Preece. The physician may be willing to subsidize a new optometrist in order to enjoy more time away from the office, but he or she should still perform a break-even analysis to get an idea of how much that subsidy is likely to be. “At a given rate of revenue per patient, which is usually less than the ophthalmologist’s rate, determine how many patients the optometrist will have to see each day in order to cover his or her pay, benefits and other costs,” said Mr. Preece. When conducting this cost-benefit analysis, Dr. Lee recommends a rule of thumb that is used in many high-skill service industries: Only hire an extra employee if the increase in revenue is at least three times the increase in costs.


Is Your Practice Ready to Hire an Optometrist?

Do you have enough demand? “If the doctor is only booked out a day or two with patients—or even has holes in his schedule right now—then it probably doesn’t make a lot of economic sense to add an optometrist to the practice,” said Mr. Preece. Rather than generating significant extra income, the new hire may add net costs to the practice, which means the practice may end up shifting income from its ophthalmologist to its new optometrist.

However, if you have a backlog of patients that is at least four weeks, then you should consider hiring an optometrist, said Dr. Lee. “And if you have excess capacity, this could be a no-brainer. Suppose you are fairly busy surgically and you’re only in the office three days per week. That leaves two days each week when an optometrist could come in and see some of your younger patients who are coming in for a comprehensive refractive eye exam. In this situation, you don’t need any additional staff and you don’t need any extra space or equipment. You don’t have additional costs, but the person will be generating additional revenue—that’s all gravy to you,” said Dr. Lee. “If, on the other hand, your staff is working at maximum capacity and the office is fully utilized, what would be more helpful—adding an optometrist or adding a tech? That’s a toss-up.”

Do you have enough support staff? “You have to make sure that the ‘assembly line’ is balanced,” said Mr. Preece. If the addition of an optometrist means you have enough people in the back office to see X patients per day, do you have enough front office staff to process that many people? Can your billing staff process the amount of claims that you’re generating each day? “Suppose you add enough techs and optometrists alongside your ophthalmologists to process 100 patients per day, but you only have enough front desk/receptionist staff to process 50 patients per day: the practice won’t be able to function efficiently,” said Mr. Preece. “You’ll have a lot of clinical staff standing around waiting for patients to be checked in. Or you’ll have doctors seeing patients who aren’t yet properly checked in—the office staff up front didn’t get the patients’ insurance cards copied and didn’t get the patients registered in the computer. If your staff is so overwhelmed that patients are leaving the office without that information being in the computer, you’ll have billing problems.”

Do you have enough space? “Suppose, for example, an ophthalmologist employs two techs,” said Mr. Preece. “The three of them are working out of four lanes. The physician decides to hire an optometrist, who now gets one of the lanes. This restricts the physician and the two techs to three lanes, which means that at any one point somebody will be standing around waiting for a lane to open up. Can the optometrist generate enough revenue to make up for the reduced efficiency of the physician’s work flow?”


Today’s Optometrist

The career aspirations of today’s optometrist are significantly different from those of the previous generation, said Dr. Lee. “The proportion of women graduating from optometry school is higher than ever before, and they are not as keen on opening up their own private practice as they used to be.” With motherhood in mind, they like the security of having a guaranteed wage, and a lot of them like the prospect of not having to work full-time. Consequently, the current outlook is quite promising for ophthalmologists who want to hire an optometrist.

Next month: Part Four—Need a new tech? How to find and hire the right person.