The primary goal of today�s ophthalmologist is to make his practice more patient oriented, apparently in response to an increasingly competitive and consumer-driven healthcare market. Today�s ophthalmologist also manages his practice more tightly, offers more procedures and resists rigid drug formularies imposed by managed care.

He�s likely to be working on strategies that will help him retain patients, train and motivate staff, evaluate new revenue sources and achieve greater productivity. Although he�s either maintained or increased his patient base in recent years, his revenue has remained stagnant � or may have even declined.

These are but a few characteristics of today�s practitioner, gleaned from our latest research. To gather data for this study, we mailed out a 66-question survey to 1,474 randomly selected ophthalmologists. Thirty-three percent responded with usable returns. Read on for a detailed report on what these ophthalmologists had to say about managing their practices.

What areas we�ve focused on

To give you a better understanding of the factors affecting your profession and the resources you can use to gain greater control over your destiny, we asked the research team we hired to gather information on the following areas:

�        market stimulants

�        challenges to practice growth

�        patient growth/practice revenues

�        surgical procedures and diagnostic/surgical technologies.

�        attitudes about practice management

�        prescribing preferences

Here�s a breakdown of the results in each category.

Market stimulants

Patient demographics proved to be, by far, the biggest factor stimulating practice growth among ophthalmologists. Ninety percent of our respondents say the aging population was a key factor stimulating the growth of their practices.

Additional factors doctors consider as having a positive impact on practice growth include:

�        surgical procedures such as refractive and cosmetic surgeries (70%)

�        ancillary services such as  dispensing (57%)

�        consumer desire for improved fitness and health (47%).

Market challenges

The challenges ophthalmologists most often face today are financial pressures. Ninety eight percent of doctors list reimbursements by managed care and Medicare as a challenge they must overcome in order to grow their practices.

Other obstacles to practice growth include:

�        declining fees for cataract surgery (94%)

�        escalating practice costs (68%)

�        attracting and retaining quality staff (67%)

�        increased competition (62%)

�        need to adopt new technology (53%)

�        co-management challenges (53%)

�        the need for new revenue streams (52%)

�        sophisticated marketing approaches (38%)

�        the need to modernize (34%).

Patient base growth and practice revenues

Although most respondents (53%) report an increase in the number of patients they see compared to 3 to 5 years ago, practice revenues haven�t fared as well. In the past 2 or 3 years: 

�        40% have experienced growth in revenues

�        41% have experienced decline in revenues

�        19% have had revenues remain about the same.

Only 40% say they expect revenues to grow in the next few years, and 37% say they expect declines. Overall, the net effect will be close to 0%.

Most doctors are taking multiple actions to reverse this trend. Ninety-one percent say they have initiated or expanded on the following activities to protect and grow revenues.

�        developing a more full-service practice (54%)

�        performing refractive surgery (50%)

�        increasing surgical efficiency (46%)

�        joining networks (43%)

�        dispensing lenses and frames (32%)

�        fitting contact lenses (30%)

�        performing cosmetic surgery (27%)

�        hiring optical professionals (24%)

�        performing lens refractions (22%)

�        specializing in specific areas (21%)

�        adding a surgery center (13%)

Procedures and technologies

Given the need to generate higher revenues, 52% of respondents perform a larger variety and quantity of surgeries than they did 3 to 5 years ago.

Ninety-six percent say that they perform one or more of the traditional surgeries listed below. (The percentages below represent the number of surgeons in this 96% group who perform each procedure specified.)

�        cataract (92%)

�        glaucoma (85%)

�        foreign body removal (73%)

�        cornea (44%)

�        vitrectomy (32%)

�        retinal (vitreoretinal) (28%)

Eighty percent perform one or more the following non-traditional surgeries:

�        oculoplastics (60%)

�        refractive (49%)

�        plastic (32%)

�        reconstructive (18%)

�        skin resurfacing (12%)

�        hair removal (12%)

Besides performing more surgeries, a vast majority (94%) say they feel the need to invest in new diagnostic and surgical equipment to grow their practices. In 1998, 87% of the physicians invested an average of $26,990 in diagnostic, imaging or surgical equipment. In 2000, 80% project they�ll make investments averaging $29,670. (The tables on the left offer percentages on equipment usage and purchasing activity.)

Practice management

To succeed in today�s healthcare environment, you must be an astute business person as well as a skilled clinician. This fact has led many of your colleagues back into the classroom to earn M.B.A. degrees, and it�s reflected in our readers� attitudes about managing their practices. Consider that:

�        98% express a desire to learn about and exert greater control over factors affecting their success

�        94% have management responsibilities

�        85% believe management skills will become even more important in the next 2 to 3 years

�        84% feel management skills are more critical to the success of their practices than they were 5 years ago.

Favored practice management approaches include:

�        becoming more patient oriented (88%)

�        effectively training and motivating staff (60%)

�        evaluating new revenue sources (54%)

�        using computer systems to increase productivity (52%)

�        investing in technology, facilities and staff (51%)

�        getting more competitive (47%)

�        using new technologies to attract patients (42%)

�        developing a Web site (37%)

�        forming alliances with providers (31%)

�        advertising/marketing (30%)

Prescribing preferences

Sixty-six percent of respondents demonstrate a preference for brand name drugs over generics. When both a brand name drug and a generic exist for the same condition, 94% say they consider the following factors before making a selection:

�        long-term proven effectiveness of the drug (64%)

�        reputation of the manufacturers for quality and consistency (56%)

�        uniqueness of the branded product (such as whether it is a critical dose drug) (56%)

�        patient�s preference (55%)

�        possibility of better compliance with the brand drug (37%)

�        support provided by the brand drug, such as patient education material (31%).

When they believe a brand drug offers unique benefits, 92% say they write �medically necessary� or �do not substitute� on the prescription.

Despite a preference for brand-specific drugs, 94% of doctors say that their drug selections are subject to formulary restrictions. In the majority of instances, however, this doesn�t present a problem Sixty-three percent indicate that there is either a large or sufficient number of drugs available on formularies.

When doctors believe a non-formulary drug is more appropriate, 95% are likely to take one or more of the following actions:

�        suggest that the patient appeal to the managed care organization (56%)

�        suggest that the patient consider paying for the product (54%)

�        request that the drug be added to the formulary (50%)

�        use an appeals process (48%)

�        contact someone outside of the appeals process (11%).

Good luck with the data

We hope you can use these research findings to evaluate your practice and make better plans. By understanding what your colleagues are doing, you can shape the characteristics of your practice that will best help you succeed.

About Our Survey Respondents and Their Practices

The median age of our survey respondents is 49. Most have been in practice 20 years. Their average annual revenue is $1.5 million. Ninety-four percent are either in solo office-based practices (45%) or office-based partnership and

group practices (49%). Almost half (45%) work at practices that have multiple office sites, an average of 2.2 offices overall. Eight out of ten have equity in their practice. Of these:

�        50% are sole owners

�        27% are partners

�        7% are shareholders.

Respondents have the following types of professionals on staff:

�        front office and insurance staff (92%)

�        technicians (81%)

�        administrators and business managers (73%)

�        opticians (51%)

�        optometrists (34%)

�        nurses (32%).