The 6 Do’s and 1 Don’t of Getting Started as an Optometrist

This is a sponsored post by Vision Source, a supporter of NewGradOptometry & new graduate optometrists! 😎 

I am here for the new grads!

After you read this article, I want to do a Q&A in the comments. In this article I discuss high level concepts, but lets drill down together. Just ask me questions related to getting started as a new graduate and I will get you some valuable answers! – Walter West O.D.

Do be enthusiastic

When a new graduate is interested in starting or buying an optometric practice, the excitement of finally being out of school, being the doctor, and owning their own business often fades when they come face to face with managing the business of an optometry practice. Keep the wind in your sails and don’t get discouraged. Enthusiasm will take you a long way! One way to keep the wind in your sails is to check out the Vision Source Practice Transitions Program.

Do manage expectations

Becoming an optometrist is a process.  You begin by learning the basics of anatomy, physiology and the physics of light.  Everything else you learn is built on that foundational knowledge until you become an optometric physician.  Becoming a businessperson is no different and you can’t know everything automatically. You begin with the basics and build your expertise through mentoring and experience.

As Steven Wright said, “Experience is something you don’t get until just after you need it.”  While that’s maybe true, there have been tens of thousands optometrists who have started from the same position you’re in and have had very successful professional as well as business careers.

Do complete your due diligence

Creating a business plan for a practice startup or acquisition is about as far as many new graduates get in preparing for practice ownership, but there’s more to success than a business plan.  For example, business development, front office services, financial assessments, coding and billing, HIPPA compliance and 3rd party vendors are all things you must assess. Here is a list of essential business services to consider.

Do open or buy in the right market

We regularly do market analysis and assessments for Vision Source® members and prospective members in order to ensure their location has the potential to support practice growth and profitability.  In addition, we have resources to assist with the selection of office space, lease negotiation, build-out, equipment selection and purchasing, EMR selection, marketing strategy, and more.

Do ask for help

Whether it’s from NewGradOptometry.com comments, Vision Source®, local colleagues, professional consultants, or a willing mentor, ask for help before you make decisions that you’ve never made before.

For example, ask for help if…

  • you’ve never purchased inventory for an optical department in a practice
  • you’ve had limited or no experience with EMR’s
  • you’ve never bought professional equipment, furniture and fixtures
  • you’ve never hired an employee
  • you’ve never set up a fee schedule

I can’t stress enough how important it is to have other docs with you on your journey. That is why we have the Vision Source® Exchange each year. You should come in 2015!

Do take advantage of resources available

Take a breath and put everything into perspective.  You’re a new graduate, so you don’t know all the answers, you’re not expected to. You have many great resources available to you and a much broader scope of practice now than optometrists had not too many years ago.  There’s never been a time in the history of optometry when the future of private practice looked this good for a new optometrist!

Don’t do it alone

As Vice President of Practice Development with Vision Source®, I assist our business development team in guiding new graduate optometrists through the process of new practice startups as well as practice purchasing.  We have many resources available to help take some of the mystery and guesswork out of starting a successful practice. Here is a good place to start.

Q&A

Ok lets get some questions going, just post below. The NewGradOptometry.com team and I will personally answer your questions!

About DrWaltWest

DrWaltWest

15 comments

  1. Dr. West and new grad team,
    I am a new grad buying a practice in OK. I am currently working on updating the pricing list for products and services. The current practice has many things over priced and which is driving away business. What do you recommend for pricing contacts, eye glass frames, lenses and fees for service. Any tips would be greatly appreciated! Thank you. ~Dr. Leslie Faulkner

    • Matthew Geller

      Hey Dr. Faulkner,

      Great question. I can really only comment on the fee for service aspect. First off you need to determine what % of your patients are private pay vs. insured. Then find out what your highest insurance plan is reimbursing. Just call them and get their fee schedule for a range of CPT codes. You never want to set your fees lower than what the insurance plan is willing to reimburse to you. Personally I found that Medicare was our highest reimbursement rate here in California so I got their fee schedule and set my fees based on that. You can get your rates in your area here – http://www.cms.gov/apps/physician-fee-schedule/

      Once you have the highest fees an insurance company will provide, make sure your fees are at or above that. Next you must consider the fact that your private pay patients will have to pay these fees. You can’t do a global discount just because they are private pay, that is illegal to my knowledge. Personally at my office, we set our fees higher than medicare reimbursement rates and private pay patients do not mind paying this. They feel our practice and our doctors are absolutely worth the money spent.

      Make a spreadsheet of every CPT code you do. In the next column write the description of the CPT, in the next write the highest insurance plan amount they are willing to reimburse, in the next column put what you want to charge for that CPT code. I use excel logic to calculate a % amount higher than the insurance plan. For example if I want to charge 25% more, I would do =0.25*cell #. Then just drag it down and you will have all your fees at a 25% higher level.

      Many doctors I know just charge what they feel there private pay patients are willing to pay.

      I hope this helped!
      Matt

      • Matt,
        This may seem like a silly question. but just for verification you can technically have a different fee set for every CPT code correct? For example, you can have a different fee for an E&M level 2 new pt vs an existing patient? In my experience most place don’t do that for every E&M code, but I’m just trying to clarify everything before I set my prices. Thanks for the help!

        Leslie

        • Matthew Geller

          Yes – absolutely! Our office does that. For example, our exam fee % markup is different than that of special testing.

          Think about it like this…. If you have a private pay patient, what are they coming in for? Which types of CPT codes will you likely be billing?

          If you are in an area where 100% of people have glaucoma and 0% of people have ARMD, you can get away with charging a higher % mark up on your ONH OCT because people will NEED this and will pay for it. On the other hand your retina OCT isn’t in high demand and people may pushback if you are trying to bill it at a high amount.

          That is really a huge oversimplification but something important to keep in mind.

          Also, think about it like this…

          Pachmyetry, a low reimbursed procedure is around $17 if my memory serves me right.

          Conjunctival foreign body removal is a high reimbursed procedure around like $140 or something.

          If you used a 50% markup, the private pay patient might not flinch at paying $27.50 for PACHS, but would perhaps be upset with a charge of $210 for the FB removal.

          With that being the case, you can maybe get away with a higher markup on lower paying procedures and a lower markup on higher paying procedures.

          This is really just brainstorming. How do you feel?

        • DrWaltWest

          Leslie,

          Regarding your question, “can technically have a different fee set for every CPT code? Here’s the deal. You should have a different charge for new patients Vs. established patients for the same level of office visit for both 9200 and 9900 codes. The reason is that you and your staff have more time and effort involved in getting a new patient processed into your system and a first visit with a new patient for a problem focused visit will take longer as a result. The guideline used to determine whether a patient is “new” Vs. “Established” is this; If a patient has been seen by you for care within the past 36 months they are an “established” patient. If a patient has never been seen by you for care they are a new patient. And, if you have previously seen a patient, even 100 times, and it’s over a year, they are a “new” patient.

          Here’s a twist, if a patient has only been in your office to fill a Spectacle prescription from a previous exam provided by another doctor outside of your practice, they are a “new” patient on the occasion of you providing professional care for a problem focused visit with a chief complaint.

          BE CAREFUL

          You can not have different fees for a particular CPT code. One code, one price, NO exceptions. Some try to play games with cash discounts, for example, they argue that it is less expensive for them to take a cash payment, they don’t have to wait 45 to 60 days for their payment therefore they think they can discount. While it’s not a bad argument and seems logical.

          BUT

          Medicare addressed this in 2004 and clarified it in 2011 and says this, “Cash discounts are reductions granted for the settlement of debts within a stipulated period before they come due. Thus terms “2/10, net 30″ on a vendor invoice mean that a 2% discount from the price will be allowed if the payment is made within 10 days from the date of invoice.”

          Here’s a link:

          http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/downloads/R450PR1.pdf

          So in Matt’s example of a foreign body removal at a fee of $140, you could legally discount $2.80. WOOO HOOO! With that, I think there’s a better chance of angering the patient than full fee.

          MOST IMPORTANT

          Let’s think about setting fees perhaps philosophically and again use Matt’s example of the $140 for Foreign Body Removal.

          Who else is going to do it cheaper? Are patients calling your office shopping?

          Telephone: Ring, Ring

          Receptionist: Dr. Faulkner’s office, can I help you?

          Caller: Yes, thanks, how much do you charge for a foreign body removal?

          Receptionist: The office visit is $ 90.00, and the Foreign body removal fee is $140, so the total is $230.

          Caller: WOW, that’s too high, I’ll shop around.

          Click!

          Although possible, I doubt this has happened anywhere.

          The point I’m trying to make is, You don’t get paid for what you do . . . you get paid for what you know to do.

          Leslie, I’m pretty sure that you paid full price for four years of optometry school, and that prepared you to know what to do. On top of that, in doing what you know to do, you are responsible for the outcome and /or any complications that may arise, in other words, liability. And, there’s also a thing called “loss of opportunity,” meaning that while your removing a patients foreign body, you “loose” the opportunity to be doing anything else during that time.

          I don’t mean to get “preachy,” or go all Vince Lombardi. It’s just that a lot of OD’s are quick to lower fees, give discounts, or in some cases not even charge a fee. And, in many cases, that’s not about what the patient wants to pay, it’s about what the doctor thinks they are worth. Charge and get paid what you’re worth.

          BTW, Ever had a really painful foreign body? Anyone who has, knows that to get relief from pain like that, you’d probably not only be willing to pay $140, you’d probably be willing to give the doctor your house!

          I hope my rambling helped.

    • DrWaltWest

      Dr. Faulkner,

      Great information from Matt in his post. I agree that you want your fees to be above the level of your highest reimbursement.

      One suggestion I would make is that you monitor the way frames, lenses, contact lenses and services are being sold or explained respectively. If you and your staff feel that your fees are too high patients will perceive that when you present them. You can also do a little recon in your local market. You, a member of your family or staff can call offices in your area and ask about exam fees, contact lenses and so forth. Another more direct way is to directly ask colleagues in your market about their fees. Don’t worry, this isn’t collusion or price fixing, you’re just asking what their fees are. The concern from collusion and price fixing comes when you and a group of other practitioners all agree that you will all charge the same fees.

      As far as pricing frames it’s very common to mark up frames anywhere from 2.0 – 3.0 times the wholesale cost. As you become more confident in your pricing and the satisfaction of your patients you want to price based on the cash flow needs of your individual practice in your market. And, very importantly, don’t overlook the fact that you can add profit not only by the way you price and sell, but also in the way you purchase and the price you pay for your inventory.

      One of the great advantages of being a Vision Source member is that you have regular meeting where colleagues meet and share practice management strategies as well as a Local Administrator who can often mentor a new practitioner in matters such as these.

      I hope that helps at least a little.

  2. Matt,
    Thanks for the tips, they are very helpful!

    Leslie

  3. Courtney Dryer

    Dr. Faulkner,

    I set my pricing similar to Matt’s method. For contacts, I searched the major retailers and wrote down their prices for each brand, make sure you consider rebates, then I looked at my cost for the lenses and marked them up to be comparable. For frames, typical retail is 3-4X. You must take into consideration that most insurances are going to discount your frames by 20% of more so keep that in mind. You can mark up low-end frames more then high-end frames. I also consider the frame itself. Is it unique or different or is it just a plain tortoise? I keep that in mind. If its more unique I will mark it up more because I know patients will pay for unique. Lenses are more difficult. I would speak to your lens rep about that. They can guide you as to what it typical in your area. Whatever they recommend, mark it up more.

    • Thank you for the good tips Dr. Dryer!

    • Matthew Geller

      Courtney, how do you keep track on inventory and mark ups with your frames? Does your practice management system do this or do you do it all by hand? Obviously this needs its own article lol, but maybe a short version?

      • Courtney Dryer

        I use Revolution EHR. In the inventory section, It allow you to enter the Wholesale cost of the frame and the actual price you paid. You then can set the multiplier. It then calculates the retail cost. It gives the option of adding tax or not. This varies per state. Some states require collecting taxes on RXed items others do not. You need to find out what your state requires. My EHR also gives me the number of days a certain frame has been in inventory based on when I enter it in. Not looking at the optical part of a EHR is probably one of the mistakes doctors make. I really like my EMR, but Id say the optical part is alot weaker then the doctor’s part.

        Also, to Leslie, I agree with Walt that you should be careful marking down your fees. You have a job that requires special skill and you should be paid accordingly. I’ve made it my office policy that Im not going to compete with the discount chains of the world. I’m going to attract patients that value my services. Obviously it takes longer to build a practice that way, but you dont want the patients that are looking for the cheapest deal. Nickel and dimers will drive you crazy! If you set your fees higher, you can work smarter not harder.

  4. Thank you everyone for your input. I now have a great place to start with pricing all of the items and services in my practice. Your input definitely made things more understandable. I never could have imagined all of the decisions that go into buying/owning my own practice. It’s very exciting, but a little overwhelming at the same time. I appreciate you all taking time to answer my questions.

    Has NGO considered doing a piece on EMR’s? That is next on my list to tackle and there are so many out there that it is a tough decision to make. I am currently doing research and gathering info on several systems. I would be happy to receive any advice anyone has on the benefits/down sides to the different EMRs available. I would also be happy to share my research once I am done gathering info.

    Thank you all again! Have a great week!

    • Matthew Geller

      Hey Dr. Faulknel,

      That is a GREAT idea. I will certainly bring it to the attention of our team. Would you maybe want to guest write an article like that? It is a difficult one to tackle for sure. I have experience on a few EMRs but I don’t know if I am qualified to give the best advice lol…

  5. Matt,
    One I finish my research I could write some info on the ones I’ve looked at closely. Or maybe several people can team up and everyone add their experiences to the article. I know a lot is personal preference, but if you are like me and have limited experience it’s intimidating to think about spending all that money and not liking what you get. I am currently talking to several companies, comprising comparative lists and checking out demos on 4-5 EMR systems trying to decide what will work best for me. Like I said I’d be happy to contribute my research. Do you have access to my e-mail address? That is the easiest way to communicate for me.

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