Which is Better: One or Two?
In optically driven (retail oriented) practices the ratio of OD to optician may be one to one, while at higher volumes more opticians may be needed. Refractive practices are more technical in their doctor’s mindset. This suggests limited work ups by technicians and a more optometrist driven exam. Less delegation and fewer diagnostic tests are more common characteristics of this orientation of practice.
A care-oriented practice skews toward the examination side, with more emphasis placed on the workup, testing, eye health care and other patient needs. Technicians and assistants are generally trained to do much more, answer patient questions and have a higher level of delegated authority.
– Imagine a retail-oriented practice that is 25% clinic and 75% optical revenue. The tech to doctor ratio is likely 1:1 with one added optician. A one-million-dollar enterprise would generate $250,000 via exams/$100per exam = 2,500 exams/year. The Exam to total patient (TP) ratio may be 80% so 2,500/0.8 = 3,125 TPs per year. This yields 260 TPs and 208 exams monthly. If the doctor works 20 days/month, 13 patients per day with 10.5 exams is typical.
The capture rate often skews much higher, as these practices are positioned as “the glasses place.” A 70% capture rate on 208 exams per month = 146 “jobs” per month or 7.3/day. Add patient visits for new dispenses, repairs and walk-in patients and the total patient demand in optical = 15-16/day. In an eight-hour day the optician would need to take care of one patient per half hour in this model, an easily accomplished task. $750,000 divided by 12 = $62,500/month and this revenue divided by the estimated number of jobs (146) = $371/optical job. This model thus produces $471/exam with $100/clinical care and $371/optical care.
Staff for this optically oriented practice is one front, one clinical technician, 0.5 billing and 1.5 optician (added 0.5 for other optical related tasks) = 4 staff. The average staff member produces $1,000,000/4 = $250,000 per full time equivalent (FTE.) Staff compensation generally runs lower on the front and technician side and higher for the optician. The average = $20/hour. 2080 hours x $20 = $41,600/yr + benefits (15%) = approx. $48,000 per FTE. $48,000 x 4 employed FTEs = $192,000 total staff compensation, or a staff to revenue ratio of 19.2% ($1,000,000/$192,000.)
-Contrast this with a care-oriented practice that produces $1,000,000 via 65% clinical care and 35% optical. In this practice, non-optical care generates $650,000/yr and due to higher delegation levels and ordering of supplemental tests, averages $200/exam clinically. $650,000/$200 = 3,250 exams. Exams represent 65% of visits for an annual patient visit total of 5,000. Monthly, this equals 417 total patients and 271 exams. A daily patient total = 24 scheduled patients and 16 exams. To accomplish this volume would require a workup technician and a scribe per doctor. Optically, the capture rate may be 40% of exams, yielding a total of 108 optical jobs per month. With an allowance for dispenses, work-ins, repairs and walk-ins an estimated 12 pts per day are seen in optical. The total staffing is the same as a retail-oriented practice in the front, and insurance, yet less need in the optical. More staff are needed in the clinic with the addition of one extra technician. Thus, total staffing and compensation is higher at 4.5 FTE due to the higher patient volume and level of training needed in technician/assistants. A higher average pay impacted by clinical needs = $22/FTE. 2080 hours per year x $22 = $45,760 + (x 0.15 benefits) = $53,000/FTE. $53,000 x 4.5 = $239,000, or a staff to revenue compensation rate of 23.9%. This care model practice yields $270/optical job. For the practice, clinical care = $200 and optical = $270 for a total of $470/exam. Each staff member contributes $222,222/FTE ($1,000,000/4.5).
| Model | $Rev/yr | TP/d | Ex/d | Opt CR | Clinical $/Exam | Optical $/Exam | Total $/Ex | Staff Comp % |
|---|---|---|---|---|---|---|---|---|
| Retail | $1,000,000 | 13 | 10.5 | 70% | $100 | $371 | $471 | 19.2% |
| Care | $1,000,000 | 21 | 13.5 | 40% | $200 | $270 | $470 | 23.9% |
I intentionally chose $1,000,000 as I believe each FTE doctor should be producing at or above this level. I also chose the 1.0 million revenue number because that level is a challenging threshold for every type of business. Think of it as an inflection point. The average doctor (particularly care-based) may feel tapped out. The needs of the practice have grown to necessitate “running a business” rather than “just making care.”
Comparing these two hypothetical practices, the retail-oriented doctors become comfortable and the thought of seeing more patients is offsetting. Care-oriented doctors scoff and say, “why aren’t you seeing more patients?” “You are hardly working relative to my schedule.”
Each of these practice types (again, hypothetical, yet reasonable examples), have opportunities. Each has an opportunity to improve, grow and prosper. Yet each may need a different treatment plan to achieve the desired owner’s outcome. It boils down to owner commitment, reputation desire and the internal drive to achieve more, and better. That is a question no one can answer but you. Like Gatorade…Is It In You?
