If you are a solo practitioner in private practice, making a decision on when to hire an associate optometrist for your practice can be difficult and arduous.
You must realize, however, that it doesn’t really matter whether you hire an associate OD too soon or postpone that decision for a while. What really matters are the practice goals, your personal and/or financial goals, and how you want to go about achieving those goals. What also might be taken into consideration is at what stage you, as the owner, are in your professional career.
From a financial perspective, many “experts” say that each doctor is capable of accounting for $500,000 to $1,000,000 or more of practice gross income.
There is so much more to this statement. When pondering the question of when to hire an associate optometrist, you need to think about many of the following questions:
- What is the practice income per doctor hour?
- Do you know what your income is per clinical hour? (Do you have an easy way to measure this?)
- How long do you think it will take for your associate to generate the same income per hour as you do?
- Is your practice a high end or discount practice?
- Do you practice the medical model or the retail model, or a little bit of both?
- How many patients are you capable of seeing in your practice in a given day?
- Do you have one exam room or two or more?
- Do you book every 15 minutes, 20 or 30 minutes or every hour?
- Is your practice large enough to support ancillary staff to whom you are willing to delegate responsibilities?
- Are you, as the practice owner, satisfied with your net income?
- Do you have a high or low overhead?
- Do you practice in a rural or urban area?
When you hire an associate, you also need to consider whether they will be a W-2 employee or work as an independent contractor (1099).
From a cost standpoint alone, it is less expensive for the practice if your doctors work on a 1099, but there are many considerations, defined by the government, to determine the status. Your accountant should be able to advise you.
Remember too that your associates need to be credentialed for the medical and vision plans, as you must bill using their name and NPI number, even if the payments will come to your corporation or partnership tax ID. Many practices market the new associate, provide them with their own business cards and hire new staff to work with them.
Be prepared to make an investment as the return on investment can be substantial if you hire the right associate.
Here is an example of how and why I made my decision to hire my first associate and then went on to hire other associates.
First, a little history . . . I opened my practice cold, four years after graduating optometry school in 1980. It was not an easy decision, but an opportunity became available and I jumped on it. At the time, I was working six days a week so I figured I might as well work six days a week for myself with an opportunity to build something for my future. I hired a receptionist, and did everything else myself. I was the doctor and the optician. I even taught myself how to edge lenses using a patterned edger. In a short time, I replaced the receptionist with an optician who functioned as the receptionist as well. Of course, back when I started, managed care didn’t exist and optometric records were kept by many (not myself) on index cards. We did not have to submit claims to insurance companies, I did not need a biller, and practicing optometry was simpler.
I was, and still am practicing in an area where there is a high concentration of opticians, optometrists, and ophthalmologists. It took me about three years until I started to be able to enjoy the monetary fruits of my labor. By that time I had two employees while still working six days a week in my practice. I attended many practice management seminars all the while making notes about which tidbits were important for me to bring back to my practice.
One day I heard a very important tidbit that forever changed my working and personal life.
That was to work smarter not harder. The example was, to squish your working schedule into shorter days to eliminate gaps. The logic was that when patients were in your practice, you would appear busy and a busy practice must be an excellent practice. That was somewhat counter intuitive to me because my feeling was that the more I was available for my patients the more likely they would come to my practice. But I decided to give it a try because working six or seven days a week, sometimes 10 hours a day was taking its toll.
So I cut my hours, and eventually cut my days back and I found that I got busier. I was open one night a week and every Saturday and closed on Sunday. I took off every Wednesday, and Tuesday was a half day. And I got busier. I was finding time to work on my practice instead of in my practice. I would not call myself a workaholic but I did have a personal work goal. That goal was to grow my practice every year. Of course it would be wonderful to grow 20% or more every year and in the beginning that is certainly possible. But after 15 to 20 years in practice it is virtually impossible to continually grow at that clip.
In my 16th year of practice I decided that I wanted to work less so I hired an associate to work on Mondays so I could have two consecutive days off. What was interesting and something I hadn’t thought about beforehand was that my associate brought a different dimension to my practice. Because I had developed a fabulous staff who knew how to speak to the patients, my patients were willing to see the younger associate.
Within a short period of time my practice was growing and it wasn’t all about me. I saw this as a good thing because it allowed me to think about taking even more time off without having to worry that my practice was going to suffer. My income did not suffer one bit as my associate received fair compensation but he made money for the practice. In addition, my associate and I were able to refer cases to each other instead of referring patients out of the practice. Another positive was that I was able to teach my associate from experience and my associate was able to teach me from a younger perspective.
As a seasoned practitioner and practice owner, I not only had to keep up with the professional knowledge to help my patients but I also had to develop keen management skills to maximize profitability. It got to a point when I realized that I truly enjoyed managing my practice as much or more than I did seeing patients. I always considered myself to be an excellent optometric diagnostician, treating eye diseases to the limits of my NY State license as well as making sure my patients were seeing at their best. But I also enjoyed spending a lot of time analyzing the health of my practice. For me, this was the stimulus to hire another associate. I wanted to be the CEO of my practice, working on building my practice while seeing patients on my own terms and schedule.
This time, on the recommendation of a colleague, I hired a new graduate.
Did I look this young when I started? Someone gave me a chance, I thought. This was absolutely the best thing I could have done for my practice. This young associate brought renewed energy, new knowledge on using all the technology we had purchased for our practice over the years, and the patients loved her. After another couple of years we hired our third associate. Granted, all the doctors do not work every day. Some days they overlap and on others they work alone.
But here’s a very important point that we learned the hard way.
You must have the staff infrastructure to support two or more doctors working on the same day. We thought we had that, but as it turned out, we did not. There were days when our team was running around like chickens without heads and they were getting very frustrated. The doctors were getting frustrated. The office was too busy for our infrastructure. This resulted in diminished patient satisfaction and poor staff attitude. Something had to change.
What we are finding out in our job market on Long Island is that it is much harder to find good staff then it is to find a good doctor. We had to make a very hard decision and reduced our team of doctors from 4 to 3. This was very difficult as every one of these doctors was excellent but until we developed a better staff infrastructure, we needed to improve the patient experience. Remember, we are in a very densely competitive eye care marketplace and we did not want to lose our leading market share because we could not service the patients well.
My reasons for hiring associates were for a better personal life, more time off, and eventually to have more time to be the CEO of my practice.
Other reasons include adding specialties, the ability to add earlier or later hours or opening on Saturday or Sunday, or because you are getting booked out more than two to three weeks in advance. Whatever the reason, make sure that your practice has enough staff to service your doctors and your patients without compromise. Think about your personal goals. Think about what makes you happy. Think about what makes your patients and your staff happy. And most importantly, give a young doctor a chance. You will be glad you did.