Eye surgeons and their managers are among the brightest people on the planet. Their patient base is abundant, growing and self-renewing. New, sight-enhancing procedures are being developed each year. Capitated care is in modest retreat. LASIK practices are growing. So why are so many surgeons, practices and managers in trouble today?

In reality, all practices periodically get into trouble. Even if you have a robust practice today, at some point you'll probably experience the same panic that's now common in the country's weaker clinics. Successful cataract surgeons whose incomes have softened in recent years have learned the hard way that it's very expensive being rich. And we're now creating a whole new crop of LASIK surgeons who will have to learn this same painful lesson as refractive surgery goes through its inevitable peaks and valleys. Most M.D.s agree: We haven't yet lived through the toughest times for ophthalmology.

Here are some strategies that will help faltering practices turn their fortunes around, help the strongest practices stay ahead, and enable the weakest practices to hang on (at the very least) during the next difficult years.

Step one: Get the big picture

When you realize that your practice needs help, start by stepping back. Get a broad, subjective impression of the state of your practice and review the information you'll need to make some tough decisions.

If you were a large corporation in trouble, you'd call an emergency board meeting. Your practice probably doesn't have a formal board or outside directors, but you certainly have a "virtual board," composed of the doctor/owner (and the spouse, where appropriate), the practice administrator or office manager, selected senior staff members and any relevant external practice advisors. You can assemble these individuals for much the same purpose.

I recommend taking the following approach:

�        Get everyone's thoughts on paper. Before holding a meeting to frame your practice's problems, everyone in the group you've selected should write, in 250 words or less, the history of the practice, the broad state of the market today, and the most important issues or problems facing the practice. Here's an example:
Mountain Eye Center was founded in 1971 by Dr. Evan Smith. When Dr. Smith retired in 1987, the practice was purchased by Dr. Roland, the present owner, who has grown the practice from $650,000 to $1.2 million in revenue over the past decade.
Our college community of 350,000 people is served by 23
ophthalmologists and 27 optometrists, and is very competitive. According to available data, Dr. Roland is the second busiest surgeon behind Dr. Mayer; all the other practices in the community are struggling to keep up with us.
We enjoy excellent hospital and referral source relationships, but our practice is now at the outer limits of what one surgeon-owner can generate. Indeed, as Dr. Roland is now entering his late 50s, he wants to be able to take an extra half day off each week. This may cause production to go down, even though we now have patients waiting more than a month for a routine appointment and more than 6 weeks for a surgical slot.
Some referral sources are drifting away from us because of these long waits. Costs are slowly increasing, and profit margins have fallen from 45% to 33% in the past 2 years alone. For a year now we've talked about adding a second surgeon, but Dr. Roland is hesitant to take on a partner because he says he "doesn't want to have to report to anyone else."

�        Call a meeting and create a consensus statement. Next, assemble everyone who's been asked to write this summary. Compare everyone's short essay and agree on a consensus statement of the current position of the practice. This document can be as long or short as you desire, but a page or two should be sufficient.
Make sure that your consensus summary includes at least a sentence or two about the projected 3- to 5-year future of the practice, such as:
...within 5 years, we hope to resolve our capacity limitations, add at least one provider and increase revenue to $2 million. Even after expenses, falling fees and Dr. Roland cutting back a half-day of production, this should give him a 10 to 15% net pay raise and allow us to better use staff and facilities throughout the week.

�        Mount a map of your service area. Place color-coded pins for your current location(s), prospective or former locations, competitors, comanaging doctors' offices and so forth. Hang this map in your normal meeting room, or in the lead doctor's or administrator's office, to help you with subsequent planning and discussions.

�        Summarize what you're up against. Determine the total estimated population of your natural service area. (Your service area could be anything from a few urban blocks to a 100-mile radius around your practice.) Divide this number of people by the number of full-time ophthalmologists serving the area, including the doctors in your practice. If the resulting number is greater than 20,000, you're in the "safe" zone. If the number is less than 15,000, you're in for an uphill fight, unless your subspecialty is under-represented or there's an extremely high senior population ratio.
Make sure you incorporate all the facts and your impressions about these key population-to-provider ratios in your consensus summary.

Step two: Compare your practice to the ideal

Assemble up-to-date financial statements for the previous 2 years, along with monthly procedure counts, patient visit
statistics, staff payroll reports and new patient sourcing data.

It's beyond the scope of this article to minutely examine the financial and volume performance norms for every practice. However, one way to gauge your current status is to compare your practice data with ideal standards based on other practices like your own. (For a sample, see "Ideal Standards for a General Ophthalmology Practice," )

By comparing your practice numbers to a list of ideal standards, you may find one or more areas where your practice is grossly mis-aligned. Focusing major effort on even one or two problem areas can accelerate your turnaround.

Step three: Determine which resources are missing or inadequate

Next, compare your practice's available resources (including both concrete, physical resources and more abstract resources such as skills, knowledge and teamwork) with those needed to keep a practice functioning at peak efficiency. This exercise, while still largely subjective, will get you thinking about the critical bottlenecks or choke points in your practice.

Have the members of your turnaround team read through this list of resources silently and give your practice a score for each item, using the following scale:

5 = We have 100% of this resource present in our practice; no more is needed for
success.

4 = We have nearly enough of this resource, but we could use just a little more.

3 = We just barely have enough of this resource in our practice to survive in the future.

2 = We have less of this resource than we need; this lack will eventually harm the practice.

1 = We have a profound lack of this resource in our practice, and it's absence will soon be fatal.

Practice Resource List

___�� Doctor/owner willingness to take reasonable business risks, and sufficient restraint to avoid taking unnecessary business risks

___�� Doctor/owner cohesion and teamwork (if applicable)

___ � Doctor/owner leadership skills (the ability to set fair policies and inspire staff)

___ � A business plan (even if brief and informal) describing the practice's realistic goals

___ � The discipline to stick to the business plan and not be distracted by side issues and opportunities

___ � Written protocols -- an operations manual, policy manual, position descriptions, etc.

___ � Management operational skills (the ability to turn policies into smooth daily functions)

___ � Staff performance standards that are appropriate (not too high or low)

___ � An adequate physical facility for current and
anticipated operations

___ � Knowledge of the local marketplace (competitors, trends, and so forth)

___ � Proper management of external relationships (hospitals, referral sources, etc.)

___ � The proper team of external advisors (accountants, attorneys, consultants, etc.)

___ � An appropriate computer/information system that can be scaled up as the practice grows

___ � Marketing efforts, internal and external, that fit with our growth and service-mix goals

___ � Awareness of our practice's financial facts and figures, and availability of appropriate accounting standards and reports

___ � Staff recruitment, training and supervision protocols

___ � Appropriate staff number, skill level and productivity level (are we overstaffed, understaffed or just right?)

___ � Staff morale and willingness to follow the practice's leaders into the future

___ � Access to appropriate levels of capital, either borrowed externally or from ongoing operations

___ � A favorable reputation among patients and in the wider community.

Evaluating the results

When everyone is done scoring, compare your answers as a group and discuss each line item. Then, on a master copy, place the final consensus score for each item. Add up all of the consensus scores on your master copy. With 20 different resources, and with up to five points for each item, your practice can have a maximum score of 100.

Let's call the number you end up with your "Practice Resource Score." Unfortunately, no objective scale exists for comparing your practice to others. However, this summary score can be a valuable internal indicator of your practice's
fitness and your ability to face the future if your practice is on the ropes today.

Next, prioritize which three items are most needed in your practice right now and estimate the dollar cost of these three resources. (Note: the resources you need most at this time are not necessarily the items with the lowest scores.) Discuss the practicality, timing and logistics of securing these three most critical resources. If one or all of these key missing resources can be feasibly secured, put down in writing a deadline for each item and assign a person to be responsible for that item.

Some practice owners will chronically -- and perplexingly -- starve certain critical departments of the resources they need to function. For example, because a practice is lacking just one part-time staff member or a computer software upgrade, the practice's billing department may struggle along, getting farther behind each month, and end up missing out forever on some claims as the submission period lapses. Does anything like this happen in your practice, or are your available resources spread appropriately, based on the needs of each department and project?

It's also important to determine the reasons for problems in this area. If a significant gap exists between your practice's needs and potential resources, why have the needed resources -- staff, capital, external expertise, etc. -- not been made available? Is management neglectful? Is there simply no money available? Is a lack of decisiveness holding everything up? Or have resource gaps simply not been recognized until now?

Step four: Make sure you have the right stuff to succeed

It's a painful thing to face, but in many cases a practice's problems are being caused by the doctor/owner. Could you be your faltering practice's chief problem? If you can't definitively answer "no," look for ways to make improvements in this area before going any further.

There are several ways a doctor/owner can contribute to the problems of a faltering practice:

�        Personality. Corporate planning consultant Ian Sharlit has written, "Business failures are often preceded by personality dysfunction on the part of the executives involved. More often than we think, the root causes of business failures lie in the executives' own traits, which are mismatched with the requirements of the business."
If you think your personality may not be perfectly suited to the needs of your practice, you can compensate for the deficit by creating a stronger management team or periodically using outside consulting assistance, such as coaching, to help you work on any problem areas.

�        Putting in time. Management skills and personality traits aside, the simple truth is that most practices that are in trouble and need a turnaround have, as a companion problem, a lack of time and energy on the part of the practice's doctors, managers, or both.
There comes a time when "working smarter" reaches its natural limits, and "working harder" is the only solution. It's normal, even when the practice isn't facing an emergency, for an ophthalmic administrator or office manager to be the first to arrive and the last to leave. It's normal for the managing partner of a group practice (or a solo practitioner) to spend 8 or more hours in an average week on purely practice management issues and tasks.
The turnaround team should assess whether the raw time commitment and work intensity of these team leaders is sufficient. The performance bar often needs to be raised much higher -- at least during the early phases of an emergency turnaround -- to get the job done.

�        Keeping the energy level high. In more than half of the cases I'm called into as a consultant, doctors in their 40s and older report that they no longer feel they have the physical energy to keep up with their practices. By this stage in life, most doctors without a formal diet and exercise program find their energy levels flagging modestly in the afternoon, at the very least. Not only does the clinic bog down, but the doctor loses the mental clarity and engagement necessary to make business decisions.
Listing detailed methods for turning around your physical vigor is obviously beyond the scope of this article. However, if your practice is slowing down because you're running out of gas, hiring a personal trainer and a nutritionist may be the critical "Phase Zero" of your business recovery.
If your energy deficits are only modest, experiment for a week with the following simple, new habits:

o       Get to bed early enough so that you can get at least 7 full hours of sleep (even if you believe you only need 5 hours to get by).

o       Wake up 30 minutes earlier than usual and exercise; even talking a slow stroll through the neighborhood will help you clear your head for the day.

o       Starting with breakfast, eat five much smaller meals instead of two or three large ones. Include a mid-morning and mid-afternoon snack, such as a "PowerBar," fruit or non-fat yogurt.

o       Reduce alcohol intake to no more than one or two glasses of wine or the equivalent per day.

o       Avoid refined sugars (candy, donuts, and the like); follow your usual habits with coffee or other caffeinated beverages, but try to reduce these if you can. (If you do cut down, you should extend your test period to at least 2 weeks. You'll need the extra time to get over your addiction to caffeine.)

o       If you feel a need, take a mid-day "power nap," or meditate for 20 minutes to recharge your batteries for the afternoon.

If you find that these habits are boosting your energy and your productivity, adopt them permanently as part of your turnaround program.

Don't lose hope

Most ophthalmologists are still in small, private, independent businesses, working for themselves. When you think about it, this is pretty remarkable. Regulatory oversight, competition, operational complexity and investment hurdles -- when added to the educational challenges and ongoing liabilities that ophthalmic business owners face -- make it surprising that anyone is still in this business at all.

But there's plenty of reason for hope. Many doctors are weathering these storms and making a healthy profit every year; prospering in tough times just takes a little more dedication and attention to detail.

To paraphrase the old saying: If hard times don't kill you, they'll make you (and your practice) stronger. And that will pay off down the road.

Ideal Standards for a General Ophthalmology Practice

The figures listed below represent a sample summary template of ideal standards that you and your administrator, practice management advisor and accountant can compare with your current practice figures. In addition to pointing out weak areas in your practice, these figures can help you establish your own current benchmarks and future goals.

IDEAL STANDARDS

John Pinto is president of J. Pinto & Associates, Inc., an ophthalmic practice management consulting firm established in 1979, with offices at 376 San Antonio Avenue, Suite C4, San Diego, Calif. 92016. John is the country's most-published author on ophthalmology management topics. Recent books include John Pinto's Little Green Book of Ophthalmology and Turnaround: 21 Weeks to Practice Survival and Permanent Improvement. You can call him at (800) 886-1235, send e-mail to him at pintoinc@aol.com or find him on the web at www.pintoinc.com.