2011 EDITION
How to Achieve
Optometric
Practice
Excellence
$225
How to Achieve
Optometric
Practice
Excellence
A Step-by-Step Guide
Endorsed by
Published by Practice Advancement Associates
on behalf of the First Practice Academy™,
an educational service of CIBA VISION and Essilor
Copyright © 2011 First Practice Academy. All rights reserved.
CIBA VISION’s sponsorship of the First Practice Academy
is done through the CIBA VISION Academy for Eyecare Excellence.
Cover illustration by Getty Images/
Stock Illustration Source/
Lael Henderson
Web sites: www.firstpractice-ce.com
www.mba-ce.com
Table of Contents
Foreword .......................................................................................................................................................................................1
Section 1.
Introduction ......................................................................................................................................................3
Section 2.
Optical Market Landscape.............................................................................................................................7
• Eye Care Market Facts....................................................................................................................................7
• Why Consumers Choose Different Eye Care Providers ..............................................................................15
• MBA RESEARCH REPORT: What Patients Expect from Eye Doctors .........................................................16
• Concluding Thoughts ...................................................................................................................................18
Section 3.
Becoming the Practice CEO........................................................................................................................19
• The CEO Mindset ..........................................................................................................................................19
• How Practice Owners Go Astray .................................................................................................................21
• Seven Methods of High-Performance Optometric CEOs............................................................................22
Section 4.
Positioning the Practice...............................................................................................................................29
• Background ...................................................................................................................................................29
• Benefits of Practice Positioning ...................................................................................................................30
• The Price/Service Positioning Ladder .........................................................................................................30
• How to Develop a Positioning Statement ...................................................................................................32
• Elements of a Positioning Statement ..........................................................................................................32
• HIGH-PERFORMANCE PRACTICE PATTERNS—Putting the Positioning Statement to Work.........................34
Section 5.
Creating a Practice Budget .........................................................................................................................37
• Seven Key Budget Categories ......................................................................................................................37
• HIGH-PERFORMANCE PRACTICE PATTERNS—Creating a Practice Budget ................................................41
• Establishing Professional Fees.....................................................................................................................41
• HIGH-PERFORMANCE PRACTICE PATTERNS—Fee Optimization Guidelines .............................................43
• Chair Cost and Managed Care .....................................................................................................................43
• Discretionary Cash Flow ..............................................................................................................................45
• Accounts Receivable ....................................................................................................................................46
• Cost-of-Goods Realities................................................................................................................................46
Section 6.
Practice Productivity Benchmarks............................................................................................................47
• New Practice Versus Established Practice Metrics .....................................................................................47
• Sources of Revenue ......................................................................................................................................49
• Gross Revenue per Comprehensive Exam ..................................................................................................49
• Behaviors Producing Low Gross Revenue per Exam .................................................................................51
• Exams per OD Hour......................................................................................................................................52
• Revenue per OD Hour ..................................................................................................................................54
• Annual Revenue per Employee (non-OD)...................................................................................................55
• Revenue per Staff Hour ................................................................................................................................56
• Gross Revenue per Square Foot of Office Space ........................................................................................57
• Other Key Metrics .........................................................................................................................................58
• HIGH-PERFORMANCE PRACTICE PATTERNS—Measuring practice productivity........................................58
Section 7.
Achieving Service Excellence .....................................................................................................................61
• Patient Loyalty .............................................................................................................................................61
• Why Service Providers Sometimes Fail .......................................................................................................62
• What Goes Wrong? .......................................................................................................................................62
• The Loyalty Ladder .......................................................................................................................................63
• Office Hours ..................................................................................................................................................64
• Duration of Office Visits ...............................................................................................................................65
• Engineering the Patient Experience ............................................................................................................67
• HIGH-PERFORMANCE PRACTICE PATTERNS—Patient Experience Engineering Implementation ..........70
• An Ideal Patient Experience .........................................................................................................................72
• HIGH-PERFORMANCE PRACTICE PATTERNS—Chair-side manner ...........................................................74
• “Never and Always” Service Standards.......................................................................................................76
• Recommending Products .............................................................................................................................77
• The Language of Service..............................................................................................................................81
• Optical Terminology .....................................................................................................................................82
• Measuring Patient Satisfaction ....................................................................................................................82
• “The Ultimate Question”...............................................................................................................................83
• Service Defects .............................................................................................................................................84
• Methods to Manage Slow Delivery of Rx Eyewear.....................................................................................85
• Methods to Manage Complaints about Extra Contact Lens Fees ..............................................................86
• Methods to Avoid Miscommunication of Managed Care Benefits.............................................................87
• Methods to Minimize Delays during Service Process.................................................................................88
• Managing Eyeglass Performance Complaints.............................................................................................90
• A Final Word on Quality Service..................................................................................................................91
• HIGH-PERFORMANCE PRACTICE PATTERNS—Quality Service .................................................................91
• IDEA FILE—Patient Loyalty ..........................................................................................................................92
Section 8.
Section 9.
Section 10.
Section 11.
Section 12.
Section 13.
Section 14.
Section 15.
Section 16.
Section 17.
Developing a High-Performance Staff .....................................................................................................95
• Staff Leadership and Management..............................................................................................................95
• HIGH-PERFORMANCE PRACTICE PATTERNS—Staff Meetings ................................................................101
• HIGH-PERFORMANCE PRACTICE PATTERNS—Leadership ......................................................................103
• Hiring Staff ..................................................................................................................................................106
• HIGH-PERFORMANCE PRACTICE PATTERNS—Hiring ..............................................................................110
• IDEA FILE—Hiring .......................................................................................................................................110
• Orientation for New Staff Members ..........................................................................................................110
• HIGH-PERFORMANCE PRACTICE PATTERNS—New Staff Orientation ....................................................111
• Staff Compensation ....................................................................................................................................113
• Performance Appraisals .............................................................................................................................114
• IDEA FILE—Annual Practice Retreat..........................................................................................................115
Managing the Product Mix—Contact Lenses ........................................................................................117
• Market Overview ........................................................................................................................................117
• Managing the Contact Lens Mix ................................................................................................................120
• HIGH-PERFORMANCE PRACTICE PATTERNS—Contact Lens Recommendations ..................................122
• HIGH-PERFORMANCE PRACTICE PATTERNS—Soft Lens Retail Pricing..................................................123
• Selling Contact Lens Annual Supplies.......................................................................................................130
• HIGH-PERFORMANCE PRACTICE PATTERNS—Guidelines to Increase Soft Lens Annual Supply Sales Ratio ..131
Managing the Product Mix—Spectacle Lenses.....................................................................................133
• Spectacle Lens Markups.............................................................................................................................135
• Spectacle Lens Bundling ............................................................................................................................136
• HIGH-PERFORMANCE PRACTICE PATTERNS—Presenting Bundled Packages .......................................138
• HIGH-PERFORMANCE PRACTICE PATTERNS—Increasing the AR Ratio.................................................139
• Multiple Eyewear Solutions .......................................................................................................................140
• Dual Use of Contact Lenses and Eyeglasses.............................................................................................141
• Rx Sunwear .................................................................................................................................................141
• Handling Requests for Over-the-Counter (OTC) Readers.........................................................................142
• Choosing an Optical Lab ............................................................................................................................143
Managing the Product Mix—Frames and Sunwear .............................................................................145
• Frames Inventory Mix.................................................................................................................................145
• Frames Markups .........................................................................................................................................149
• HIGH-PERFORMANCE PRACTICE PATTERNS—Optimizing Frames Presentation and Product Mix ......150
• Plano Sunglasses ........................................................................................................................................150
• HIGH-PERFORMANCE PRACTICE PATTERNS—Plano Sunglass Merchandising .....................................151
High-Performance Marketing ...................................................................................................................153
• Marketing Plans ..........................................................................................................................................154
• Internal Marketing ......................................................................................................................................155
• Managing VPR Syndrome—Vision Plan Restrictions................................................................................155
• HIGH-PERFORMANCE PRACTICE PATTERNS—Signage and Displays.....................................................156
• HIGH-PERFORMANCE PRACTICE PATTERNS—Practice Brochures .........................................................157
• HIGH-PERFORMANCE PRACTICE PATTERNS—Practice Newsletters ......................................................157
• HIGH-PERFORMANCE PRACTICE PATTERNS—Special Events ................................................................158
• HIGH-PERFORMANCE PRACTICE PATTERNS—Recall ..............................................................................160
• IDEA FILE—Recall .......................................................................................................................................160
• Practice Web Sites ......................................................................................................................................161
• HIGH-PERFORMANCE PRACTICE PATTERNS—Web Site Construction Basics .......................................163
• External Marketing .....................................................................................................................................163
• HIGH-PERFORMANCE PRACTICE PATTERNS—Internal and External Marketing ...................................164
• IDEA FILE—Marketing ................................................................................................................................165
Practice Management Information Systems.........................................................................................167
• Features and Benefits of Information Systems .........................................................................................167
• Considerations When Selecting a Software System.................................................................................169
• System Costs and Return on Investment ..................................................................................................169
Medical Eye Care .........................................................................................................................................171
• Five Steps to Get Started ............................................................................................................................172
• Allergy .........................................................................................................................................................173
• Dry Eye ........................................................................................................................................................174
• Punctal Occlusion .......................................................................................................................................175
• Glaucoma ....................................................................................................................................................176
• Medical vs. Refractive Billings ...................................................................................................................177
• HIGH-PERFORMANCE PRACTICE PATTERNS—Medical Eye Care ...........................................................178
Business Entity Types, Accounting Methods, Benefit Options ........................................................179
• Business Entity Types .................................................................................................................................179
• Accounting Methods...................................................................................................................................181
• Employee Benefit Options..........................................................................................................................182
Additional Reading ......................................................................................................................................183
Appendix ........................................................................................................................................................185
How to Achieve Optometric Practice Excellence was developed by Practice
Advancement Associates, a unit of Jobson Medical Information LLC, on
behalf of the First Practice Academy™ (FPA), an educational program
sponsored by CIBA VISION and Essilor. FPA is endorsed by the American
Optometric Association. Visit firstpractice-ce.com for additional practice
management ideas and tools useful to practices in their formative years.
The FPA web site also can be accessed from mba-ce.com, the web site
of the Management & Business Academy™ (MBA), also co-sponsored by
CIBA VISION and Essilor, and from cibavisionacademy.com, the web site
of the CIBA VISION Academy for Eyecare Excellence™. The MBA web
site (mba-ce.com) features content relevant to established practices.
Foreword
How to Achieve Optometric Practice Excellence was developed by the First Practice Academy™ (FPA), a professional education program that is an adjunct to the Management & Business Academy™ (MBA), sponsored by
CIBA VISION and Essilor. FPA is endorsed by the American Optometric Association.
CIBA VISION and Essilor are committed to assisting optometrists at all stages of their careers to master
the business management aspects of practice. The MBA was created in 2005, and through mid-2011, the
MBA educated nearly 3,000 independent practice optometrists in live seminars. The MBA has developed the
largest database of practice performance metrics ever compiled. The sponsors have commissioned a distinguished faculty of practice management consultants and highly successful practitioners who have compiled
a comprehensive set of guidelines, techniques and tools to improve performance.
This compendium is written for new practice owners. It assumes that at this stage of your career you can benefit from a broadened perspective about your multiple roles as medical professional, small business owner and
participant in the overall optical marketplace. It shares MBA research findings, as well as perspectives from
leading experts in the fields of practice management, leadership, service quality and retail marketing.
As MBA founding faculty member Jerry Hayes, OD, says, “Treating patients is your profession, but the entity
that delivers care is a business.” How to Achieve Optometric Practice Excellence deals mainly with your business entity and describes proven office processes that create an outstanding patient experience, foster high
productivity and produce a strong financial return.
CIBA VISION and Essilor believe that we will be successful only to the degree that you—the gatekeepers who
prescribe and dispense our products—are also successful. We will continue to share the “best practices” of
leading optometrists to provide a roadmap for your journey to professional and financial success.
Dwight H. Akerman, OD, FAAO
Director of Professional Affairs and Programs
CIBA VISION
Howard B. Purcell, OD, FAAO
Vice President, Customer Development
Essilor
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S E C T I O N
1
Introduction
What a wonderful profession—helping people protect and enhance their most precious eyesight. Few people
are as privileged as optometrists to spend their lives doing something so vital to people’s well-being and
something that has such a major impact on quality of life. You provide a highly valued and essential service
in your community and justifiably earn the esteem of your neighbors and those you serve. There are few
professions held in higher regard.
Success in optometry can be measured in many ways. Achieving a good clinical outcome for each patient is
right at the top of the list. Making patients happy with the service they receive is another measure of success. A third measure might be the financial reward an optometric practice yields.
This manual does not deal with clinical outcomes. This conscious omission is not meant to suggest that clinical
excellence is not important to successful optometric practice. Rather, the omission recognizes that most
optometrists spend four years learning clinical skills, regularly attend clinical CE lectures and are well versed in
the science of optometry. There are a great many reliable sources of clinical education. The same cannot be
said of the education most optometrists receive in business management, which is the subject of this manual.
As in the lives of individuals, what occurs during the early formative years of an optometric practice will
often foretell ultimate success. During their first few years in operation, owners develop a set of work habits,
perceptions about their role and attitudes toward daily operations that shape their decision-making. Once
these habits, perceptions and values are in place, they can be exceedingly resistant to change. To the extent
that a practice adopts highly productive methods early in its life and gets the practice train placed on the
right track to the desired destination, it is much more likely to achieve a sustained level of success as it
reaches maturity.
Although few optometric practice owners have received much training in business management, their success will be constrained or enlarged to the extent they learn the multiple disciplines involved in running a
small retail business. Some ODs view business management as commercial and unprofessional work and, to
their detriment, spend too little time gaining an understanding of critical business skills. Others simply have
no access to education in this area.
The most important objective of this manual is to instill in you a chief executive officer, or CEO, mindset that
will encourage focus on the ownership roles most critical to produce financial success. Throughout the manual
there are also suggestions on specific behaviors likely to enhance practice performance, identified as “HighPerformance Practice Patterns.” These provide operational guidelines derived from highly successful independent optometrists. Other sections of the manual are labeled “Idea File” and offer concrete suggestions about
practice-building tactics. Each idea is easy to implement, yet not routinely done today in optometric practice.
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How to Achieve Optometric Practice Excellence
Throughout the manual there are tables and charts with normative benchmarks for independent practice
optometrists. Much of the data is derived from the ongoing research program of the Management & Business Academy™ (MBA), which has conducted extensive surveys of more than 1,400 practices since 2005.
Cogent advice from the distinguished MBA faculty is cited throughout the manual. Faculty members include:
• Neil Gailmard, OD, MBA, FAAO, CEO of an independent practice and author of the “Management
Tip of the Week,” published by Optometric Management.
• Gary Gerber, OD, frequent lecturer, author and CEO of The Power Practice.
• Jerry Hayes, OD, CEO of Hayes Consulting, successful entrepreneur and former independent practice
owner.
• Mark Wright, OD, FCOVD, clinical assistant professor of practice management at The Ohio State
University, CEO of Pathways, a consulting firm specializing in practice financial assessment, and he
previously had built a ten-doctor practice. He is professional editor of Review of Optometric Business.
• Dave Ziegler, OD, FAAO, frequent lecturer and author and CEO of a multi-doctor practice.
• Carole Burns, OD, FCOVD, is CEO of a multi-location practice based in Columbus, Ohio. She also is
professional editor of Review of Optometric Business.
Here you can find a better understanding of each section.
Section 2 provides a background discussion of the market arena in which independent practice optometrists
compete for patients and of changing consumer demand for vision correction devices.
Section 3 discusses what it takes to become an effective CEO of an optometric practice. It explains why it is
so important that practice owners develop a broader view of their role, beyond that of a competent technician. And it presents seven approaches to management used by the most successful CEOs.
Section 4 provides a framework for developing a distinctive mission statement and practice positioning to provide
new patients a compelling reason to make an appointment and existing patients a strong motivation to return.
Section 5 describes a simplified approach to practice budgeting that promises to increase net income by providing a better understanding of the revenue sources and expenses of optometric practices.
Section 6 explains key productivity metrics in wide use in optometric practices, providing reliable benchmarks that enable objective assessment of performance. It also provides a method for setting priorities for
practice improvement.
Section 7 discusses the vital importance of creating a strong service culture and offers a process to engineer
the patient experience in the practice to assure patient loyalty and generate referrals to the practice.
Section 8 provides guidelines for hiring, training, managing and motivating a high-performance staff. It
shares insights from effective leaders in other fields, relevant to optometric CEOs.
Sections 9-11 discuss the retail side of practice, presenting “best practices” for managing contact lenses,
spectacle lenses, frames and sunwear. These sections contain many useful metrics that will facilitate diagnosis of the state of your retail business.
Section 12 outlines marketing strategies and tactics useful to attract new patients and increase revenue from
existing patients.
Section 13 discusses the benefit in investing in office management software.
Section 14 shows how adopting the medical model of optometry can improve patient care and boost practice revenue.
Section 15 provides an overview of legal entity and tax considerations for practice owners.
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How to Achieve Optometric Practice Excellence
Success Is a Choice
Basketball coach Rick Pitino titled his book on leadership Success is a Choice. He wanted to emphasize that
success is not the result of luck or just showing up for work every day. It’s about making a personal commitment to achieve excellence.
As a practice owner, success will depend on the choices you make—the practice dream you select, your
choice of goals, your decisions about strategies and plans. As a new practice owner you already have made
two major life choices that point you in the direction of success—deciding to become an optometrist and
starting your own business. Now you face many decisions about the direction you want to take your new
business.
In any field of endeavor there is a small percentage who rise to the top and achieve excellence. This manual
shares the ideas and methods of top performers in independent optometric practice and provides quantitative metrics on their performance that can serve as beacons to guide your journey toward excellence. May
success be yours.
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