“It is not the strongest of the species that survives, but rather, that which is most adaptable to change.” This quote has often been falsely attributed to Charles Darwin, but It was first used by Louisiana State University business professor Leon C. Megginson in 1963 when he attempted to apply the theory of evolution to successful businesses. Professor Megginson worked to identify best practices amongst businesses that thrive, just as consultants work to do in the field of optometry. In a healthcare landscape that is changing rapidly, engaging a business consultant can help independent practice owners adapt to stay competitive and profitable.
Consulting specific to optometry has grown significantly since its early days. Therapeutic pharmaceutical agent (TPA) legislation, big box retailers, and e-commerce were not factors that practitioners had to accommodate a generation ago. Today’s optometrists must be confident in both their medical and business acumen to succeed.
Just as the industry is changing, business consulting is changing, too. There are generalist consultants, those who specialize in billing and documentation, even some who are specific to coaching new graduates through their cold starts. Regardless of where you are in your career, a consultant can be the key to help get your practice where you want it to be.
Richard S. Kattouf, OD ’72, owner of Kattouf Consulting, considers himself a pioneer in consulting independent practice owners. “Colleagues saw that I was doing things differently and started asking for my help. I realized I had information to sell. People think knowledge is power, but it is the implementation of knowledge that is power,” he states. He encourages his clients to exercise their entrepreneurial muscles to improve both their profits and their professional satisfaction.
“People think knowledge is power, but it is the implementation of knowledge that is power” -Richard Kattouf, OD ’72
Dr. Kattouf works with clients to maximize their medical license. He feels passionately about helping optometrists feel confident in their medical training and expertise. With managed care and lowered reimbursement margins cutting into profits on the product side, optometrists can recover some of that lost revenue by prescribing directly, as state TPA laws allow for, and not referring out when a doctor can prescribe internally.
Dr. Kattouf also advises his clients that developing a specialty within the practice, be it Corneal Refractive Therapy (CRT) or developmental vision with children or low vision with older adults, is a win-win for practice owners. It engages them professionally, keeping the work interesting and increasing personal satisfaction, while also creating new avenues to profit growth.
Speaking of profits, Ryan Ames, OD ’07, is certain that many independent practice owners are losing up to $50K annually because of undercoding and issues related to billing and documentation. Owner of ForeSight, LLC, an optometric documentation and coding consulting firm out of Wisconsin, Dr. Ames sees common documentation mistakes as the “low hanging fruit” for ODs in private practice. “Accurate coding is so easy to implement and the ROI is substantial,” he says.
Being fearful of audits is a common mistake Dr. Ames sees in many of his clients. That fear contributes to independent practitioners leaving tens of thousands of dollars on the table annually. His advice to clients is to focus on small but precise tweaks the ODs can make in their documentation that will result in immediate revenue.
“When doctors take care of the needs of their patients, no more and no less, then carefully document what was done and accurately grade the chart as it stands, they will likely see a significant increase in revenue.”
Dr. Ames goes on to say, “Doctors are scientists, not business people. We learn medicine, not accounting. It only makes sense to ask people for help who know what they’re doing.” From his point of view, that is what makes business consulting useful to the average practice owner. Dr. Ames attended ICO before our new practice management curriculum was implemented. He went back to school (UW-Oshkosh ’14) to earn his MBA and fill his perceived knowledge gaps.
“Many independent practice owners are losing up to $50K annually because of undercoding and issues related to billing and documentation” -Ryan Ames, OD ’07
His work with clients primarily consists of what he calls, “friendly chart audits.” This allows clients to do what they do best: focusing on providing ethical and competent patient care, while the consultant can provide the specific feedback they need to bill properly, allowing for full reimbursement of their services. ForeSight also offers fee analysis, based on Medicare’s national rates for reimbursement, and insurance contract reviews. This enables ODs to evaluate which insurers would be most beneficial to engage.
One of the most well-known optometric business consulting firms is PRIMA Eye Group. Co-founded by Neil Gailmard, OD ’76 in 2011, and acquired by Independent Doctors of Optometric Care (IDOC) last year, Dr. Gailmard takes a generalist approach to consulting and is prepared to assist independent ODs at any stage of their practice.
Dr. Gailmard believes there are many challenges facing the industry today that could make independent practice owners more vulnerable if they do not keep up. “Changes are coming faster and they are potentially bigger, now. There is far more regulatory compliance required by vision and medical insurance plans and from the federal government. We are seeing a growing trend of people buying products of all kinds on the Internet.” He feels that not all practice owners are making adjustments to accommodate those changes quickly enough. “I often say, ‘Act as you mean to go.’ Successful entrepreneurs take risks and make changes before they are needed.”
Steve Vargo, OD ’98, also with PRIMA Eye Group, agrees with Dr. Gailmard. “Unfortunately, many practices do not have a strategy to address these changes.” Dr. Vargo recommends his clients join an eye care alliance (IDOC is one such alliance), seek out information on industry trends, attend conferences, and avoid becoming isolated in their practice.
They have identified a pattern of practice owners spending the vast majority of their working hours (85% – 90%) seeing patients, but neglecting the business side of their practice. Says Dr. Vargo, “It has become increasingly difficult to be an ‘all things for all people’ profession. There are many things to consider when determining your brand. Whatever path you choose, you must differentiate yourself from the alternatives.”
Another duo who has formed a business consultancy to help ODs better manage the changing nature of optometry is Eric Baas, OD ’06 and Robert Steinmetz, OD ’03. Their firm, iCare Advisors, LLC strictly focuses on helping newer graduates open their first private practice. The profile of an optometry student has changed, evolving from a young man joining an established family business to a now-typically female, international, or non-traditional student. Drs. Baas and Steinmetz saw an opportunity to help these new graduates learn from some of their own initial mistakes. “There is a purity and control in building versus buying a practice,” says Dr. Baas. “Instead of inheriting staffing issues or outdated technology, those who start cold get to define their entire process.”
“There is a purity and control in building versus buying a practice”
-Eric Baas, OD ’06
However, cold starting a practice comes with its own challenges. Dr. Steinmetz notes that the iCare Advisors client base includes many recent ICO graduates who are leaving the Midwest to set their stake in different regions of the country. At this stage of practice, the expertise that Drs. Baas and Steinmetz provide relies heavily on leveraging targeted data and a geospatial analysis. These tools predict everything from traffic patterns to the spending habits of local residents, all of whom should be considered potential patients.
In this changing era of practice, Dr. Steinmetz believes, “The recipe is the same, but the ingredients must change.” This includes the flexibility to integrate family planning into a larger business plan. Four of five clients iCare Advisors recently worked with were young female ODs who also happened to be pregnant. “Private practice aligns best with family choices,” says Dr. Steinmetz. “Once the practice matures, the owner has tremendous opportunity” to either lean in or out, depending on personal preference and family needs.
As the nature of the independent practice of optometry changes in response to market factors, business consultants believe they can help ODs navigate the unfamiliar aspects of the landscape. “Private practice is as strong as it has ever been,” states Dr. Baas. “Retail chains and online providers have changed the way we practice, but not the level of success we are able to achieve. Optometry is a strong profession that has been able to continually adapt to healthcare changes and remain successful.”